ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has announced a comprehensive roadmap aimed at revitalizing the country’s underdeveloped Exchange Traded Fund (ETF) market. The plan includes digital onboarding platforms, cost reductions, and new passive investment options designed to attract investors. Asset management companies (AMCs) will now have the capability to sell ETFs directly to investors, bypassing traditional stockbroker routes, and will also be able to open brokerage accounts for them.

According to Securities and Exchange Commission of Pakistan, the roadmap was developed with contributions from the Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company of Pakistan (CDC), Mutual Funds Association of Pakistan (MUFAP), brokers, and AMCs. This strategy will be implemented in phases, allowing securities brokers to launch and manage ETFs independently for the first time. The initiative aims to streamline management structures and diversify product offerings. Additionally, new passive investment vehicles such as Index Tracker Funds and ETFs will be incorporated into the Voluntary Pension System (VPS), providing lower management fees for long-term investors compared to traditional VPS equity funds. The implementation will be supported by investor awareness campaigns and operational enhancements.

SECP has reaffirmed its dedication to bolstering Pakistan’s capital markets by promoting investment products that are transparent, innovative, and cost-efficient. The revitalization of the ETF market is anticipated to deepen market engagement, enhance liquidity, and widen participation among both retail and institutional investors. All stakeholders have received the necessary implementation instructions to facilitate these changes.