Key Points
- Pakistan raises low-risk mutual fund account limits for retail investors
- Digital onboarding is simplified through the removal of repeated verification checks
- Regulator targets broader participation in capital markets through financial inclusion
ISLAMABAD: Pakistan’s corporate regulator has simplified digital investment procedures for mutual funds and sharply increased investment limits for low-risk retail accounts in a move to attract more small investors into the country’s formal capital markets.
According to the Securities and Exchange Commission of Pakistan, the reforms would make regulated investment products more accessible.
It would make the account opening requirements easier and reduce compliance duplication for customers already verified by banks and other licensed financial institutions.
Under the revised framework, the investment limit for “Sehl Accounts” — simplified low-risk investment accounts designed for small retail investors — has been increased to Rs 1 million from the previous Rs 200,000.
“Sahulat Accounts,” another simplified account category, will now allow investments of up to Rs 3 million, compared to the earlier cap of Rs 1 million.
The regulator also removed the requirement from customers of banks, microfinance banks and electronic money institutions to undergo separate “Know Your Customer” (KYC) verification when opening mutual fund accounts with asset management companies.
KYC procedures are standard financial-sector checks used globally to verify customer identity and prevent illicit financial activity.
Investors who have already completed verification with regulated financial institutions no longer need to repeatedly submit the same documents for opening mutual fund investment accounts.
The reforms also streamline due diligence procedures for online account opening by relying on improved biometric verification and liveness detection technologies, the SECP stated.
The regulator said the changes are expected to speed up digital onboarding and improve operational efficiency for asset management companies.
In another major shift, annual investment caps previously applied to such accounts have been removed. The waiver would give investors greater flexibility to invest and redeem funds throughout the year without restrictive limits.
Pakistan’s mutual fund industry remains relatively small compared with regional peers. It comprises a large portion of household savings still held outside formal investment channels.
Regulators have increasingly focused on digital financial inclusion and retail participation to deepen the country’s capital markets.
SECP Chairman Kabir Ahmed Sidhu has set a target of increasing the number of investors in Pakistan’s capital market to 2.5 million, according to the statement.
The measures form part of an overall campaign to simplify investment procedures, improve digital access and strengthen transparency and investor protection in Pakistan’s financial markets.
