ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified new management fee caps for the Collective Investment Scheme (CIS) from April 1, 2025.
The SECP has issued an S.R.O.22(I)/2025 to propose amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008, here on Saturday.
According to the SECP’s notification, the following Management Fee caps for a Collective Investment Scheme (CIS) shall be applicable, calculated on a per annum basis of the average daily net assets, effective from April 01, 2025: (i) Equity Schemes up to 3.00%; (ii) Income/Aggressive Income Schemes & Commodities (Deliverable and Cash Settled) Schemes up to 1.50%; (iii) Money Market Schemes up to 1.00% and (iv) Fixed Rate/Return, Exchange Traded Fund and Index Schemes up to 0.50%:
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In the case of hybrid schemes, the Asset Management Company shall use a weighted average approach based on a respective allocation of net assets to determine the Management Fee Caps.
Provided further that the Asset Management Company shall not charge a management fee if the Fund of Funds invests in underlying schemes managed by the same Asset Management Company. The SECP explained that any costs related to government levies on the charging of management fees shall be excluded when calculating the management fee for compliance with the prescribed regulatory caps. However, for Total Expense Ratio disclosure to unit holders, all costs, including taxes, shall be fully disclosed, SECP added.
The Management Fee of a pension fund shall be capped as follows: (I) Equity Sub-Fund up to 2.00%; (ii) Money Market up to 1.00%; (iii) Income fund up to 1.25% and (iv) Commodity (Cash Settled & Deliverable) fund up to 1.5%.
In case of employer pension fund, the management fee cap and/or the total expense ratio of a pension fund shall be as per the agreement between the employer and pension fund manager and shall be disclosed in the offering document, the SECP added.
Copyright Business Recorder, 2025
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