ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) specified rating requirements for investment in short-term debt instruments by open-ended collective investment schemes (CISs) aimed at protecting unitholders’ investment in various schemes launched by asset management companies (AMCs) and improving transparency and efficiency.

“New requirements have been notified through Circular No. 9 of 2023, which is available at https://www.secp.gov.pk/document/circular-no-9-of-2023-short-term-rating-requirements-for-cis/?wpdmdl=47944&refresh=6479d45fa814f1685705823,” SECP said in news release.

SECP said requirements had been introduced through amendments in earlier issued Circular No. 7 of 2009 (Categorization of Open-End Collective Investment Schemes). “Amendments were made in consultation with Mutual Fund Association of Pakistan (MUFAP), Pakistan Credit Rating Agency Limited (PACRA) and VIS Credit Rating Co. Limited (VIS).”

Through amendments, SECP said credit rating of any short-term security in portfolio of money market scheme would not be lower than A1 (A One), whereas, in case of income schemes, rating of any short-term security in portfolio would not be lower than A 3 (A Three).

In case of Shariah Compliant (Islamic) Scheme, rating of short-term instruments in portfolio would not be lower than A 2 (A Two), it said. Likewise, in case of Balanced Scheme, rating of any short-term debt security in portfolio would not be lower than A 2 (A Two).

Published in The Daily National Courier, June, 03 2023

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