The Securities and Exchange Commission of Pakistan (SECP) has withdrawn the requirement for asset management companies to arrange committed credit lines from banks/DFIs equivalent to 10 percent of net assets of each fund. In this connection, the SECP has issued direction No 37 of 2017 here on Tuesday on the withdrawal of liquidity requirements for mutual funds.
According to the direction No 37 of 2017 issued here on Tuesday, the SECP, in exercise of power conferred under Section 282D of the Companies Ordinance, 1984, hereby withdraws the requirement for asset management companies to arrange committed credit lines from banks/DFIs equivalent to 10% of net assets of each fund prescribed through Direction No 07 of 2017.
Under Direction No 07 of 2017, the requirement of minimum cash and near cash instruments was 5% of net assets of the fund on monthly average calculated on daily basis. Moreover, investment of fund of funds scheme in money market schemes was treated as equivalent to cash and near cash instrument.
The requirements of committed credit lines were revised to 10% of net assets and the deadline to comply with this requirement was extended up to March 15, 2017. Furthermore, the AMCs shall review the committed credit lines at least on quarterly basis against the net assets of the fund, the SECP earlier direction No 07 of 2017 added.
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