MUFAP considered a key stakeholder: SECP to conduct investor awareness campaigns

The Securities and Exchange Commission of Pakistan (SECP) observed that the untapped potential of the mutual fund industry can be realised through concerted efforts for creating awareness among the public about mutual funds and the benefits offered by mutual funds.
According to the Annual Report of the SECP for 2011, one of the key areas, which can unleash the immense potential the mutual fund industry holds, is reaching out to untapped investor base. The SECP believes that there is a broad range of funds available to efficiently cater to the needs of a diverse range of investors. However, this untapped potential can be realised through making concerted efforts for creating awareness amongst the public about mutual funds and the benefits they offer. In this regard, the SECP in collaboration with MUFAP and other industry participants intends to conduct investor awareness campaigns including seminars, road shows, workshops, etc.
One of the key elements for consistent growth of the mutual fund industry is to understand on an ongoing basis the investment needs of the public and offer products that can efficiently meet those needs. Owing to the changing macroeconomic environment, the investment needs of the public have become more dynamic which warrant launch of innovative products. In order to promote the industry, the SECP is receptive to innovative ideas and products that offer diverse solutions to satisfy changing needs of participants in the industry. For this purpose, the SECP will continue to encourage specialised funds such as Exchange-Traded Funds, Commodity Funds, and Sector Specific Funds, SECP said.
The report said that in collaboration with MUFAP, the SECP is working for standardising the contents of the constitutive documents of a collective investment scheme (CIS). It is envisaged that the standardised documents will serve to enhance an investor's comprehension of constitutive documents and lead to well-informed decisions. This will expedite the approval process, thereby, leading to swift launch of new schemes.
The SECP considers MUFAP as a key stakeholder in the development of the mutual fund industry. As a result, the SECP intends to hold regular dialogues with MUFAP to resolve issues hampering the growth of the industry and focus as well as move forward on areas that can catalyse growth of mutual funds, report said.
It added that in collaboration with Mutual Funds Association of Pakistan (MUFAP), the SECP, shall actively work to strengthen the distribution channels for development of the industry. The SECP plans to resolve the key issue of fair valuation of debt securities in co-operation with market participants by encouraging better trading platforms whilst also considering the possibility of setting up an independent pricing agency, which can serve to increase transparency and liquidity and potentially revitalise the primary and secondary debt markets.
Furthermore, concerted effort shall be made towards strengthening the role of rating agencies. The SECP also intends to have standardised performance presentation standards in place for which the Global Investment Performance Standards (GIPS) of the CFA Institute shall be considered for implementation across the industry, it added.