ISLAMABAD (GNP) : Securities and Exchange Commission of Pakistan (SECP) has developed a roadmap to revive Pakistan’s underdeveloped Exchange Traded Fund (ETF) market by providing digital onboarding platforms, reducing cost and offering passive investment options to the investors.
Under the new framework, asset management companies (AMCs) can now sell ETFs directly to investors, bypassing traditional stockbrokers, and even open brokerage accounts for them.
AMCs will also be allowed to share a portion of their ETF management fees with brokers who help distribute these funds, aligning incentives to further lower investor costs and expand market outreach.
The roadmap, developed with input from the PSX, NCCPL, CDC, MUFAP, brokers, and AMCs, will roll out in phases.
For the first time, securities brokers will be allowed to launch and manage ETFs themselves, a move aimed at reducing costly multi-layered management structures and increasing product variety in the market.
In addition, passive investment options such as Index Tracker Funds and ETFs will be added to the Voluntary Pension System (VPS), offering long-term investors with lower management fees compared to traditional VPS equity funds. To support these changes, investor awareness campaigns and operational upgrades will complement the digital onboarding infrastructure.
SECP reiterated its commitment to strengthening Pakistan’s capital markets by promoting transparent, innovative, and cost-efficient investment products.
The development of the ETF market is expected to enhance market depth, improve liquidity, and broaden investor participation for both retail and institutional investors.
Necessary implementation instructions have been issued to all stakeholders.
