ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has specified additional requirements for Asset Management Companies (AMCs) to advertise Open End Collective Investment Schemes (CIS). According to a circular 16 of 2021 issued by the SECP, here on Saturday, the SECP has specified additional requirements for performance presentation in all forms of advertisements including newspaper and social media advertisements related to equity schemes of an Open-end CIS, for compliance by AMCs.
The SECP has enforced the provisions of the said circular with immediate effect. The SECP in exercise of the powers conferred under sub-section (3) of section 2828 of the Companies Ordinance, 1984 read with Regulation 54 (4) of the Non-Banking Finance Companies and Notified Entities Regulations, 2008, specifies the following additional requirements for performance presentation in all forms of advertisements including newspaper and social media advertisements related to equity schemes of an Open-end CIS, for compliance by AMCs.
The calculation of return used in the advertisement shall be based on a minimum period of 12 calendar months on rolling basis. This means that last 12 months performance will only be valid for the succeeding month. The AMCs shall ensure that outdated advertisements shall be removed from its websites and social media platforms. In case of new funds launched during the year, performance data of a CIS shall be presented only if it has an investment track-record of not less than six months, as required under Circular 16 of 2014.
The font size of performance figure(s) shall not exceed twice the font size of heading in the advertisement, where heading is the text with the largest font size excluding the performance figure. The font size of benchmark returns shall not be less than 30 percent of the performance figure(s). The information about fund risk profile should be given right under the benchmark figure and its font size shall not be less than 30 percent of the font size of the performance figure e.g. "Risk Profile: High Risk of Principal Erosion,” the SECP added.
Copyright Business Recorder, 2021