ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has abolished the requirement for banks to obtain separate licence for distributing mutual funds and private pension funds to Roshan Digital Accounts (RDAs).

In this connection, the SECP has issued a notification here on Wednesday.

This relaxation has been granted to facilitate overseas Pakistanis to invest in mutual funds and private pension funds managed by Asset Management Companies (AMCs), and comes as part of SECP’s efforts to increase investor-base in Pakistan’s capital markets by enabling investments through RDAs.

However, the permission is only applicable to banks that are eligible to open RDAs. For transfers to accounts other than RDAs, the license requirement is still applicable under Securities & Future Advisor Regulations, 2017.

It is expected that this initiative will broaden the range of available investment avenues for overseas Pakistanis and increase flow of foreign remittances to the country, SECP added.

According to the S.R.O. 1581 (I)/2021 issued by the SECP here on Wednesday, in exercise of the powers conferred by section 40B of the Securities and Exchange Commission of Pakistan Act, 1997, read with sub section (3) of section 64 of the Securities Act, 2015 (III of 2015), the SECP has granted exemption to the banking companies licensed and authorized by the State Bank of Pakistan to open Roshan Digital Accounts (RDA) and performing the function of distributing units of Collective Investment Schemes (CIS) and/ or Voluntary Pension Schemes (VPS) of multiple Asset Management Companies (AMCs) to their RDA holders, from the requirement of obtaining license under sub-section (1) of section 64 of the securities Act, 2015 (III of 2015), to undertake regulated securities activity as securities advisor: Provided that such banking companies shall comply with all other requirements prescribed under the applicable regulatory framework.

Copyright Business Recorder, 2021