SECP raises limits for smaller mutual funds investors; simplifies verification process

Pakistan's companies regulator has raised investment limits for low-risk mutual fund accounts and removed duplicate verification requirements for small investors, making it easier to invest in mutual funds digitally.

The reforms were announced through a new circular published by the Securities and Exchange Commission of Pakistan (SECP) on Thursday.

The new rules aim to reduce friction in the account-opening process and remove barriers for first-time investors.

What are the new mutual fund investment limits in Pakistan?

The Sehl Account limit has been raised to PKR 1 million from PKR 200,000. The Sahulat Account limit has increased to PKR 3 million from PKR 1 million.

Annual investment caps on these accounts have also been removed, giving investors more flexibility.

What KYC changes has SECP made?

Investors already verified by banks, microfinance banks, or electronic money institutions no longer need separate KYC for Sehl and Sahulat Accounts.

KYC or Know Your Customer is a mandatory process where financial institutions verify a client's identity, address, and financial profile to prevent illegal activities like money laundering, terrorism financing, and fraud.

The requirement to resubmit documents to Asset Management Companies has been removed to eliminate duplication and speed up account opening.

SECP has also streamlined additional due diligence for online account opening with improved biometric verification and liveness check systems.

Why is SECP simplifying mutual fund investment in Pakistan?

Pakistan's mutual fund investor base remains small relative to the population.

The reforms are part of SECP's broader push to deepen retail participation in Pakistan's capital markets. SECP Chairman Dr Kabir Ahmed Sidhu has said the regulator aims to reach 2.5 million capital market investors.

The new initiative is expected to benefit investors through dividends, savings growth, and exposure to Pakistan's economic expansion.