The Securities and Exchange Commission of Pakistan (SECP) has put a maximum cap on Asset Management Companies (AMCs) for placement of funds, on behalf of each eligible collective investment scheme (CIS), with all microfinance banks, non-bank finance companies and Modarabas. In this regard, the SECP has issued direction No 37 of 2016-Maximum Cap on Placement/Deposit with MFBs/NBFCs and Modarabas here on Thursday.
According to the SECP, the commission hereby directs that an Asset Management Company (AMC) on behalf of each eligible collective investment scheme (CIS) shall not place funds (including TDR, PLS saving deposit, COD, COM, COI, money market placements and other clean placements of funds) of more than 25% of net assets of that CIS with all microfinance banks, non-bank finance companies and Modarabas.
Provided that the above restrictions will not be applicable on sector specific fund and aggressive income fund, the SECP maintained. The direction shall come into force with immediate effect. However, in case of a CIS which is currently not in compliance with the aforementioned restriction shall ensure compliance within ninety (90) days of the issuance of the SECP direction or until the maturity of existing TDRs/ Fixed Deposit/Placements, whichever is later, the SECP added.