Digital transformation for mutual fund sector stressed

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has emphasised the need of digital transformation for asset management companies (AMCs) to promote financial inclusion in the wake of social distancing.

SECP Chairman Aamir Khan said the recent circumstances induced by the coronavirus outbreak make it all the more exigent for AMCs to undergo complete digital transformation.

Khan was addressing a ceremony for signing agreement of mutual fund digital platform between Mutual Funds Association of Pakistan (Mufap) and Central Depository Company (CDC).

“This initiative is in line with SECP’s highly recommended course of action for the mutual fund industry which advocates the development of alternate distribution channels and digital platforms,” he said. “This platform will facilitate investors from specific market segments and low risk investors, thus promoting financial inclusion at the grass root level and harvesting the savings culture in Pakistan.”

CDC Chairman Moin Fudda, Farrukh Sabzwari, commissioner of specialised companies division and Khalida Habib, executive director of SECP also attended the ceremony.

Badiuddin Akber, chief executive officer of CDC said the financial technology solution aims to enhance the investor outreach for asset management companies by leveraging the power of technology to provide a convenient, informative and interactive medium for investors to invest in a wide range of investment products offered by different mutual funds

Amjad Waheed, chairman of Mufap said the initiative will pave the way for the growth of the mutual fund industry.

The assets under management for mutual funds industry decreased to Rs540 billion as on June 30, 2019 from Rs610 billion a year earlier, according to Mufap. During the year, 37 new open-end mutual funds were launched while four funds matured. As on June 30, 2019, there were 19 asset management companies managing 290 funds including open-end, close-end funds and voluntary pension schemes. Equity funds conventional and shariah compliant) dominated the assets under management of the industry with the largest share of mutual fund industry at Rs168 billion amounting to market share of 31 percent.