Islamabad June 17 2021: Mutual Funds performance to be shown on a minimum of 12 months says SECP. In order improve quality of information related to performance of mutual funds to promote better investment decisions, the Securities and Exchange Commission of Pakistan (SECP) has specified certain requirements for the advertisements of equity funds.
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The SECP has specified certain conditions for advertisement of equity funds, requiring fund’s projected performance/return to be based on a minimum period of twelve (12) calendar months on rolling basis. Moreover, in order to improve legibility of risk profiles and disclaimers, the text format has also been specified. These conditions form part of the SECP’s policy to raise the bar on AMCs fiduciary responsibility, by encouraging true and fair view of fund’s performance to attract investment.
The requirements have been issued to curb the problem of miss selling through advertisements being circulated on social media, especially concerning equity oriented mutual funds. Advertisements only projecting favorable information on fund’s performance and not presenting the complete risk profile, comparisons to benchmark and important disclaimers, can lead may be misconstrued by potential investors.
