Employees Contributory Funds: SECP revises rules for investments in securities

The Securities and Exchange Commission of Pakistan (SECP) Friday revised limits/conditions for Employees Contributory Funds engaged in making investments in listed securities. The SECP has issued SRO 491 (I)/2019 here on Friday to amend the Employees Contributory Funds (Investment in Listed Securities) Regulations, 2018.
These regulations shall apply to all provident funds or any other contributory retirement funds constituted by a company or where a trust has been created by a company to manage such funds in respect of all the investments made by company or trust, as the case may be, in bonds, redeemable capital, debt securities or instruments issued by a statutory body, units of collective investment schemes registered as notified entities with the Commission and in listed securities including shares of companies, bonds, redeemable capital, debt securities and equity securities.
According to the revised regulations, the SECP said where the company or Trust, as the case may be, decides to make an investment out of the Fund or Trust in the money market collective investment scheme registered as notified entity with the Commission under Non-Banking Finance Companies and Notified Entities Regulations, 2008, such investment can be made up to hundred per cent of the size of the Fund or Trust, as the case may be, subject to following sub-limits: a total investment, at the time of making investment in any single money market collective investment scheme shall not exceed twenty per cent of the size of the Fund or Trust as the case may; and (b) total investment, at the time of making investment in money market schemes managed by a single asset management company, shall not exceed 50 per cent of the size of the Fund or Trust as the case may be.
Under the revised regulations, the total investment, at the time of making investment in debt collective investment schemes managed by a single asset management company, shall not exceed fifty per cent of the investment limit.
Earlier under previous regulations, total investment, at the time of making investment in debt collective investment schemes and money market collective investment schemes managed by a single asset management company was limited to maximum twenty per cent of the investment limit provided.