Mutual funds: SECP approves simplified rules for distributors

Individual with matriculation, simple IFMP certification can work as distributor

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved simplified certification and regulatory requirements for the distributors selling mutual fund units for a single asset management company (AMC).

“The decision has been taken to encourage the establishment of a vibrant distribution network,” the SECP said in a statement on Monday.

A new class of mutual fund distributors comprising qualified and experienced individuals has been introduced who can distribute the units of a single AMC only by complying with the minimum qualification and getting new certification from the Institute of Financial Market of Pakistan (IFMP).

According to the SECP, the distributors selling mutual fund units of a single asset management company will be exempt from seeking licence or registration from the SECP and the existing IFMP certification will not be applicable to them.

The minimum eligibility criteria for these distributors have been kept simple to encourage individuals to join the profession in line with the distributors of other financial products. An individual even with a matriculation and having new simple IFMP certification can work as a distributor of mutual funds.

Others, who can act as distributors of the single asset management company, include individuals having a Master’s degree or other professional qualifications, retired government or semi-government department officials of grade 16 and above with service of at least 10 years, retired bank officers of OG II or above with service of at least 10 years, individuals already acting as distributors of mutual funds for the last three years and insurance agents with a valid registration certificate and verification of credentials from an insurance company.

To build the capacity of distributors, increase the knowledge base and to curb mismanagement in the sale of mutual fund units, the SECP said it had also been made mandatory for the AMCs to arrange in-house training for its employees and distributors twice a year.

The Mutual Funds Association of Pakistan will be responsible for maintaining the centralised database of such distributors and disseminate it on its website for the information of investors.

Published in The Express Tribune, January 3^rd, 2017.

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