SECP issues set of FAQs regarding Private Fund Sector

ISLAMABAD: Private Funds are required to be valued at least once in a financial year by an independent valuer and Venture Capital Funds shall be valued once in two years.

The Securities and Exchange Commission of Pakistan (SECP) Tuesday issued a set of Frequently Asked Questions (FAQs) regarding the Private Fund Sector.

The FAQs aim to provide clear and concise information to stakeholders, investors, and the general public regarding key aspects of the private fund sector.

The SECP has clarified that valuation changes are communicated to investors on a half-yearly basis through a detailed report, which includes the composition of the portfolio, the value and description of each security, and cash balances as of the reporting date.

Additionally, these changes are reported to the Commission within four months of the financial year close through the annual financial statements.

Private Fund Management Company must prepare financial statements in accordance with the applicable International Financial Reporting Standards (IFRS) within four months of the close of their financial year. The financial statements must be submitted to the SECP.

The FAQs are designed to assist fund managers, investors, and other stakeholders by providing clarity on the regulatory framework and operational requirements for private funds. It covers a wide range of topics, including an introduction to private funds, their registration and establishment process, governance and management structures, investment and operational guidelines, financial reporting and compliance obligations, the role and responsibilities of the private fund management company, valuation and pricing mechanisms, and applicable regulatory fees and equity requirements.

The FAQs also outline the registration requirement and the documentation of a private fund, making it easier for stakeholders to understand and comply with SECP’s regulatory requirements.

The FAQs are expected to simplify the understanding of the regulatory context, address practical concerns and consolidating all relevant information in one place which aims to enhance transparency, promote regulatory compliance, and support the development of the private fund sector in Pakistan.

Copyright Business Recorder, 2025