Mutual fund units of single AMC: exemption of distributors from licence being mulled

The Securities and Exchange Commission of Pakistan (SECP) is planning to exempt distributors who are selling mutual fund units of single Asset Management Company (AMC) from the requirement of licensing/registration. Through an SRO 1023(I)/2016, the SECP has proposed amendments in NBFC & Notified Entities Regulations, 2008. According to the SRO, those distributors who are selling mutual fund units of single AMC only shall be exempted from the requirement licensing/registration provided that they shall fulfil such other requirements as may be specified by the Commission.
In exercise of the powers conferred by sub-section (2) of section 282B of the Companies Ordinance 1984 the SECP proposed amendment In Non-Banking Finance Companies and Notified Entities Regulations, 2008 which hereby published for the information of all persons likely to be affected. The notice is given that comments, if any, received within 14 fourteen days of the date of the notification will be taken into consideration by the SECP.
In the aforesaid regulations, in regulation 66A, in clause (a), for the proviso the following shall be substituted, namely: Provided that those distributors, who are selling mutual fund units of single AMC only shall be exempted from the requirement licensing/registration provided that they shall fulfil such other requirements as may be specified by the Commission, it added.
At present, under [66A. Sale and Distribution of units of Collective Investment Schemes], an Asset Management Company may sell units of Collective Investment Scheme directly or through distributors. An Asset Management Company shall ensure that to whom it delegates distribution function have valid license/ registration from the Commission. Provided that distributors which are already engaged in the business of distribution of mutual fund units, shall comply with these requirements within six months of coming into force of these regulations, existing regulations added.