In a major move to facilitate mutual fund industry, the Securities and Exchange (SECP) Policy Board has directed SECP to immediately reduce fee charged on mutual fund companies from existing 0.08 percent to 0.02 percent on assets under management. The SECP Policy Board has taken the decision during the last meeting held at the SECP Headquarters under the Chairmanship of Professor Khalid Mirza.
When contacted, Khalid Mirza said that the SECP will implement the direction of the SECP Policy Board for the revival of the mutual fund industry. The proposed 0.02 percent fee would be still highest in the world being charged from the mutual funds. Out of 19 mutual fund companies, about 10 companies are in loss and the accumulated net profit of all companies comes to around 8 percent, which require immediate reduction in the asset management fee, Khalid Mirza said.
He said that it was brought to the attention of the Board that licenses of six brokers had not been renewed during 2019. A sample of two of these cases were discussed which left the Board unconvinced as to whether the action taken was justified. The Oversight Committee of the Board was then entrusted with the task of examining all cases of license non-renewal and to take a final decision with respect to license renewal in each case. The next meeting of the Oversight Committee of the Board would be held on coming Wednesday to take final decision in this regard.
Out of 225 brokers, the SECP has renewed licenses of 219 brokers. The cases of the remaining brokers would be finalized in the next meeting of the oversight committee. The SECP Policy Board has further directed SECP that the licenses of brokers should be renewed automatically in future, Khalid Mirza added.