The Sindh government today approved a stringent new investment policy designed to protect billions in public funds, introducing a complete ban on high-risk activities like currency speculation and capping exposure to the stock market. The new framework was given the green light during the inaugural board meeting of the newly established Sindh Fund Management House (SFMH), chaired by Chief Minister Syed Murad Ali Shah.
‘This House will ensure that every rupee of public money is invested transparently, professionally, and for the long-term benefit of the people of Sindh,’ the Chief Minister said during the meeting, which formally positioned the SFMH as the province’s central platform for managing designated government funds.
The gathering was attended by senior officials including Chief Secretary Asif Hyder Shah, Chairman Pand D Najam Shah, and Secretary Finance Fayaz Jatoi, along with MPAs Shiraz Shaukat Rajpar and Sadia Javed.
Empowered by the Sindh Fund Management House Act, 2021, the new board will oversee SFMH operations, approve its budget, and recommend rules and investment policies for final government sanctioning. The SFMH is currently responsible for 16 designated funds, including the Sindh Province Pension Fund, the Sindh Social Relief Fund, and the Sindh General Provident Investment Fund.
Chief Minister Shah issued a stern directive for strict governance and risk controls. ‘We are custodians of pensioners’ savings, social relief funds and public servants’ contributions. I will not allow speculative or reckless behaviour with these funds,’ he instructed, emphasising the prioritisation of safety, transparency, and long-term returns.
A major outcome of the meeting was the approval in principle of the Draft SFMH Investment Policy, 2026. This new policy replaces the 2021 guidelines with stronger safeguards and clearer definitions of permissible and prohibited investments.
The 2026 rules introduce specific limits to protect public capital, including capping equity investments at 15 per cent of a total fund’s size, with no more than 3 per cent exposure to any single company. Investments in mutual funds are restricted to schemes with a minimum rating of ‘AM2++’ and a fund size of at least Rs5 billion.
Furthermore, the policy imposes a complete prohibition on high-risk activities such as currency speculation, commodities trading, and any engagement in unsecured derivatives.
‘Our goal is not short-term gains but long-term fiscal stability. These rules will protect public money and give us predictable, sustainable returns,’ Mr Shah observed, directing the Finance Department and SFMH to ensure strict implementation.
To ensure professional execution of investment decisions, the Chief Minister also approved the formation of an Investment Committee to be chaired by the Chief Secretary. This committee will evaluate investment proposals, manage approved brokers and asset managers, and monitor portfolio performance against established benchmarks.
The board delegated significant operational powers to the committee, including the authority to execute bank guarantees and standby letters of credit for government-initiated projects within defined limits. ‘Decisions must be data-driven, and every investment choice should be traceable and auditable,’ the Chief Minister added, stressing that practices must align with global best standards.
The board also discussed improving returns on the Sindh Social Relief Fund (SSRF), which is currently earning 8.5 per cent in a daily product account. A proposal to shift these balances into short-term Treasury Bills, offering higher yields between 10.40 per cent and 10.50 per cent, was reviewed.
Approving the shift in principle, the Chief Minister cautioned, ‘Social relief funds must not lie idle in low-yield accounts… However, we will move carefully, in phases, and strictly within our risk framework.’ He instructed officials to develop a phased transition plan that protects the fund”s liquidity for relief disbursements.
Mr Shah concluded that these reforms are part of a broader strategy to strengthen provincial finances and build a “strong financial cushion for Sindh.” He directed the board to submit quarterly progress reports directly to his office to monitor the implementation of the new financial framework.