To encourage financial inclusion and make investing in AMCs simpler, the Securities and Exchange Commission of Pakistan (SECP) has established the idea of Digital Asset Management Companies (AMCs). On the SECP website, a concept paper has been made available for public comment in this respect.
By minimising paperwork, offering services remotely, and utilising client data, digital AMCs have the ability to assist investors and broaden the investment pool. These businesses will offer all AMC services, such as the creation of authorised Collective Investment Schemes (CIS), online account opening, unit issuance and redemption, and inter-CIS conversions via digital methods, so that the investor no longer has to physically visit any distribution point.
The concept note discusses issues including the difficulties experienced by traditional AMCs, the potential of digital AMCs in Pakistan, the main goals driving the growth of digital AMCs, and significant regulatory issues. Additionally, it suggests a framework for filling these found gaps.
In addition to releasing this Concept Paper concurrently, the SECP intends to evaluate the Digital AMC concept in a sandbox testing setting.
There are now 21 AMCs in Pakistan managing 1.2 trillion rupees worth of assets. In Pakistan, there are only about 320,000 mutual fund investors, which amounts to 0.14 percent of the country’s total population, making this area of the capital markets less developed than in other foreign jurisdictions.