Securities & Exchange Commission (SECP) Policy Board (SECP-PB) chairman Khalid Mirza spoke at a recent event organised by Mutual Funds Association of Pakistan (MUFAP) to launch its 2018 Yearbook. Khalid Mirza has served as the founding Chairman - Securities & Exchange Commission of Pakistan as well as the Competition Commission of Pakistan. Having implemented major capital market programmes and corporate sector reforms, he transformed the Monopoly Control Authority into a modern competition agency and has served as the International Finance Corporation's (IFC) Chief of Mission in Turkey and Chief of Regional Mission in Thailand.
Speaking at the event, he outlined the growth of mutual fund industry from Rs 25 billion in 2002 to around Rs 600 billion, i.e. over $4 billion currently. He also mentioned the gaps that managed assets are only 2 percent of GDP while in India the mutual fund industry stands 20 percent of its GDP. Outlining institutional challenges, he stated that the mutual industry in Pakistan remains small by international standards with mainly institutional funding.
He said it is incumbent on policy makers and regulators to adopt a progressive and enlightened view and take measures as necessary to enhance the effectiveness of the industry as a pillar of the financial system.
Some of the measures proposed included having a level playing field between mutual funds and Government securities, promotion of pension and retirement benefits, new product development, increasing fund governance and compliance, reducing capital requirements. He outlined that the SECP would issue the necessary directions for much-needed reforms in the fee and expense framework for mutual funds.
Touching on the role of the mutual fund sector, he said it needs to counter the paucity of investable securities, act in investors' interests, and remain both transparent as well as accountable. His talk was appreciated by the audience who highlighted the importance of regulators realizing changes in international financial architecture and market globalization.
In the evolving scenario, mutual funds are likely to occupy a significant niche position between the capital and money markets on one side and the banking system on the other.-PR
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