ISLAMABAD: Master Circular reforms took effect on Tuesday after the Securities and Exchange Commission of Pakistan (SECP) released an updated regulatory framework for Asset Management Companies (AMCs) and Investment Advisers (IAs), aiming to simplify compliance and support the growth of Pakistan’s mutual fund industry.

The updated Master Circular brings together all applicable circulars, directives and regulatory clarifications issued between January 6, 2009, and June 30, 2026. SECP said the consolidated document will provide market participants with a single, comprehensive reference for regulatory requirements governing Collective Investment Schemes (CIS), mutual funds and investment advisory services.

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The revised framework also incorporates several recent regulatory developments. These include provisions related to Infrastructure Funds, Environmental, Social and Governance (ESG) Funds, Investment Plans, Digital Asset Management Companies (Digital AMCs), digital investor onboarding through regulated financial institutions, higher investment limits for low-risk investors, updated performance benchmarks, Key Fact Statement (KFS) requirements, trust deed formats and the Market Development Fund.

More than 100 words into the announcement, Master Circular remained the centerpiece of SECP’s effort to improve regulatory clarity and operational efficiency for Pakistan’s investment management industry. The commission said the updated framework will help Asset Management Companies and Investment Advisers access all applicable regulatory requirements through a single document, reducing complexity and improving compliance.

Comprehensive Regulatory Framework

The Master Circular covers a broad range of operational and regulatory matters affecting the mutual fund industry.

These include digitization, advertising standards, categorization of Collective Investment Schemes, investment avenues, disclosure requirements, Exchange Traded Funds (ETFs), Constant Proportion Portfolio Insurance (CPPI)-based schemes, performance benchmarks and the sale and marketing of mutual funds.

The framework also outlines rules on sales loads, valuation, provisioning, mandatory professional certifications for Non-Banking Finance Companies (NBFCs), distribution of fund units, outsourcing arrangements, risk management, compliance standards, scheme mergers, unit holders’ meetings, separately managed accounts and closed-end funds.

Regulatory Clarification

SECP clarified that if any inconsistency arises between the updated Master Circular and an individual regulatory circular, the provisions of the relevant circular will take precedence.

The commission said the updated Master Circular is now available on its official website and is expected to improve regulatory certainty while supporting innovation, digital transformation and sustainable growth across Pakistan’s asset management sector.