The Securities and Exchange Commission of Pakistan (SECP) has issued requirements for Constant Proportion Portfolio Insurance (CPPI) based Collective Investment Schemes (CIS). According to the SECP circular 30 of 2017 issued here on Wednesday, the commission, in exercise of powers conferred under Section 282B (3) of the Companies Ordinance, 1984 hereby makes the following amendments in the requirements of Circular No. 18 of 2015, dated May 15, 2015:
Firstly, a CPPI based CIS/plan may take equity exposure maximum upto 50 percent of its net assets subject to Cushion Value Percentage and Maximum Multiplier limits prescribed vide Circular No. 18 of 2015. Secondly, an AMC shall immediately rebalance asset composition of the CIS/plan at least on 5 percent decline in portfolio value of CIS from the previous rebalancing or on weekly basis, whichever falls earlier.
Thirdly, a CPPI based CIS/plan launched under the category fund of funds shall take equity exposure only through dedicated equity funds. All the other requirements prescribed vide Circular No. 18 of 2015 shall remain unchanged. The requirements prescribed vide direction No. 18 of 2016 dated May 25, 2016 shall stand withdrawn, the SECP added.
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