AGL 38.48 Decreased By ▼ -0.08 (-0.21%)
AIRLINK 203.02 Decreased By ▼ -4.75 (-2.29%)
BOP 10.17 Increased By ▲ 0.11 (1.09%)
CNERGY 6.54 Decreased By ▼ -0.54 (-7.63%)
DCL 9.58 Decreased By ▼ -0.41 (-4.1%)
DFML 40.02 Decreased By ▼ -1.12 (-2.72%)
DGKC 98.08 Decreased By ▼ -5.38 (-5.2%)
FCCL 34.96 Decreased By ▼ -1.39 (-3.82%)
FFBL 86.43 Decreased By ▼ -5.16 (-5.63%)
FFL 13.90 Decreased By ▼ -0.70 (-4.79%)
HUBC 131.57 Decreased By ▼ -7.86 (-5.64%)
HUMNL 14.02 Decreased By ▼ -0.08 (-0.57%)
KEL 5.61 Decreased By ▼ -0.36 (-6.03%)
KOSM 7.27 Decreased By ▼ -0.59 (-7.51%)
MLCF 45.59 Decreased By ▼ -1.69 (-3.57%)
NBP 66.38 Decreased By ▼ -7.38 (-10.01%)
OGDC 220.76 Decreased By ▼ -1.90 (-0.85%)
PAEL 38.48 Increased By ▲ 0.37 (0.97%)
PIBTL 8.91 Decreased By ▼ -0.36 (-3.88%)
PPL 197.88 Decreased By ▼ -7.97 (-3.87%)
PRL 39.03 Decreased By ▼ -0.82 (-2.06%)
PTC 25.47 Decreased By ▼ -1.15 (-4.32%)
SEARL 103.05 Decreased By ▼ -7.19 (-6.52%)
TELE 9.02 Decreased By ▼ -0.21 (-2.28%)
TOMCL 36.41 Decreased By ▼ -1.80 (-4.71%)
TPLP 13.75 Decreased By ▼ -0.02 (-0.15%)
TREET 25.12 Decreased By ▼ -1.33 (-5.03%)
TRG 58.04 Decreased By ▼ -2.50 (-4.13%)
UNITY 33.67 Decreased By ▼ -0.47 (-1.38%)
WTL 1.71 Decreased By ▼ -0.17 (-9.04%)
BR100 11,890 Decreased By -408.8 (-3.32%)
BR30 37,357 Decreased By -1520.9 (-3.91%)
KSE100 111,070 Decreased By -3790.4 (-3.3%)
KSE30 34,909 Decreased By -1287 (-3.56%)
Pakistan

SECP specifies regulatory framework for Debt and Hybrid ETFs

  • Just like equity ETFs, the debt ETFs are also passively managed and trade on a regular exchange.
  • Investment in debt ETFs is well suited for investors with a low risk profile, as it provides a strong defensive addition to their investment portfolios.
Published June 24, 2021

ISLAMABAD: In line with its objectives of creating a competitive and conducive playing field and to diversify the range of Exchange Traded Funds (ETFs) available to investors, the Securities and Exchange Commission of Pakistan (SECP) has specified the framework for issuance of Debt and Hybrid ETFs through Circular No 20 of 2021.

The circular also updates the existing framework for Equity ETFs, said a press release issued here.

Just like equity ETFs, the debt ETFs are also passively managed and trade on a regular exchange.

Debt ETFs allow ordinary investors to gain passive exposure to fixed income securities such as corporate bonds or Treasuries in an inexpensive way, while Hybrid ETFs allow investment in an index which has both debt and equity securities.

Investment in debt ETFs is well suited for investors with a low risk profile, as it provides a strong defensive addition to their investment portfolios.

The framework specifies the procedure for listing, trading, clearing and settlement of ETF units, besides the disclosure requirements for asset management companies and the obligations of market makers/authorized participants.

Internationally, ETFs are among one of the fastest growing investment products which are being customized to cover specific arrays of sectors, stocks, commodities, bonds, futures and other asset classes.

The ETFs provide investors with various benefits such as trading flexibility; diversification of overall portfolio and transparency in terms of publishing underlying holdings on a daily basis.

It is envisioned that the introduction of debt and hybrid ETFs at the Pakistan’s stock exchange will bring Pakistani capital market at par with other regional and international jurisdictions and will go a long way in promoting capital formation and market development.

Comments

Comments are closed.