ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified the Securities Managers (Licensing and Operations) Regulations 2024, aimed at facilitating investment advisory services in the securities market.
The new regulatory framework allows eligible securities brokers to offer portfolio management services upon obtaining a securities manager licence from the SECP. Prior to these regulations, securities brokers were prohibited from providing investment advisory services.
To obtain a securities manager licence, brokers must meet specific eligibility criteria, including maintaining a minimum net worth of Rs30 million and a Broker Fiduciary Rating (BFR) of 2 or higher. Additionally, applicants must demonstrate sufficient research capabilities to perform the functions of a securities manager.
Under the regulations, customer funds and securities must be held by an independent custodian. The minimum investment threshold for a securities manager to accept from a client is set at Rs5m.
Other key provisions of the regulations cover licensing procedures, the conduct of securities managers, the preparation of investment policy statements for clients, and the management of conflicts of interest.
These regulations are part of the SECP’s ongoing efforts to develop the capital market, encourage the entry of new market participants, and enhance competitiveness.
Published in Dawn, November 15th, 2024
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