ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) has introduced a new category of mutual funds titled Infrastructure Schemes under the framework of open-end collective investment schemes.
This initiative is aimed at strengthening the role of capital markets in channelling long-term savings into infrastructure development.
Pakistan faces an urgent requirement to expand and modernise its infrastructure, with financing needs estimated at nearly USD 15 billion annually.
Under the framework, Asset Management Companies (AMCs) may categorise infrastructure schemes as equity, debt, or hybrid funds depending on their investment focus. Eligible sectors include energy, transport, logistics, water, sanitation, communication, and a wide range of social and commercial infrastructure. It includes hospitals, educational institutions, industrial parks, affordable housing, and tourism facilities.
This broadened scope is intended to mobilise both retail and institutional investors towards ventures that directly contribute to Pakistan’s development agenda.
To promote investor confidence, the framework prescribes minimum fund sizes of Rs100 million for perpetual schemes and at the close of the subscription period for closed-end schemes. AMCs will be required to invest a minimum seed capital of Rs25 million in closed-end schemes with maturity exceeding three years, ensuring alignment of interest between managers and investors.
Closed-end schemes may also offer periodic subscription and redemption windows after one year, subject to conditions clearly set out in the offering documents.
The framework provides flexibility in relation to Net Asset Value (NAV) disclosure for closed-end infrastructure schemes, requiring disclosure at intervals not exceeding one month as specified in the constitutive documents.
In addition, schemes must maintain at least 70 per cent of net assets invested in infrastructure securities every quarter, with any shortfall to be regularised within three months.
A transparent fee structure has also been introduced. Management fees are capped at three per cent per annum for equity schemes and 1.5 per cent for debt schemes, while hybrid schemes will follow a weighted average based on asset allocation. No sales load will be permitted, though contingent load may apply in the case of early redemption under closed-end schemes.
