KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has approved a roadmap to revive the country’s underdeveloped exchange traded fund (ETF) market by enabling digital onboarding, lowering costs and expanding access to passive investment options, said a statement on Tuesday.
Under the new framework, asset management companies will be allowed to sell ETFs directly to investors, bypassing traditional brokers, and can also open brokerage accounts on their behalf. They may share a portion of management fees with brokers to incentivise wider distribution and reduce investor costs.
Developed in consultation with key stakeholders including the Pakistan Stock Exchange (PSX), the plan will be implemented in phases. For the first time, securities brokers will be permitted to launch and manage ETFs, a move aimed at simplifying structures and increasing product diversity.
Passive investment options such as index tracker funds and ETFs will also be introduced into the Voluntary Pension System, offering lower-cost alternatives for long-term investors. The reforms will be supported by investor awareness campaigns and operational upgrades.
The SECP said the initiative would deepen capital markets, improve liquidity and broaden participation among retail and institutional investors, adding that implementation instructions have been issued to all stakeholders.
