In a significant move to shield investors and combat the mis-selling of financial products, the Securities and Exchange Commission of Pakistan (SECP) has ordered all investment advisors and distributors of mutual and pension funds to secure membership with the Mutual Funds Association of Pakistan (MUFAP).
According to SECP information today, the directives primary objective is to bring all market intermediaries under a single, standardised regulatory framework, ensuring they adhere to a unified Code of Conduct.
This measure is anticipated to enhance transparency in the sector, providing savers with greater confidence that their financial interests are being safeguarded. Additionally, it establishes a formal mechanism for handling complaints and resolving disputes.
The new requirement encompasses a wide range of financial professionals, including Licensed Investment Advisors, Licensed Securities Advisors, and distributors affiliated with Asset Management Companies and Pension Fund Managers.
As a designated Self-Regulatory Organisation, MUFAP is tasked with facilitating the membership process and ensuring industry-wide compliance with the new regulations. By centralising advisors and distributors on one platform, the initiative aims to improve oversight and streamline market practices.
The move is also designed to support the capacity building and continuous professional development of financial intermediaries, encouraging them to adopt best practices and remain current with market developments.
Ultimately, the directive is expected to reinforce investor protection, improve market discipline, and contribute to the growth of a more transparent and dependable mutual fund industry in Pakistan.