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ISLAMABAD, Aug 22 (APP): 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 represents a significant step towards strengthening the role of capital markets in channeling long-term savings into infrastructure development, said a press issued by the SECP on Friday.
The proposal for creating a distinct category was initially presented at the Mutual Fund Focus Group Session 2025, where it was identified as a key milestone under the Fund Management Department’s Roadmap 2025–26. Extensive consultations were subsequently held with the Mutual Funds Association of Pakistan (MUFAP) and other stakeholders to refine the framework.
The final structure reflects both industry feedback and SECP’s commitment to ensuring regulatory clarity, investor protection, and alignment with national development priorities.
Pakistan faces an urgent requirement to expand and modernize its infrastructure, with financing needs estimated at nearly USD 15 billion annually. Current infrastructure spending remains significantly below international benchmarks, amounting to just 2.1 percent of GDP compared to the global standard of 8–10 percent.
By introducing a dedicated regulatory category, the Commission seeks to provide stronger visibility to infrastructure-focused mutual funds, while offering investors a transparent and well-structured avenue for participation in projects of national significance.
Under the framework, Asset Management Companies (AMCs) may categorize 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 such as hospitals, educational institutions, industrial parks, affordable housing, and tourism facilities.
This broadened scope is intended to mobilize 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 Rs. 100 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 Rs. 25 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 percent of net assets invested in infrastructure securities on a quarterly basis, with any shortfall to be regularized within three months.
A transparent fee structure has also been introduced. Management fees are capped at three percent per annum for equity schemes and 1.5 percent 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.
By establishing this dedicated category, SECP seeks to bridge Pakistan’s infrastructure financing gap through long-term domestic savings, while ensuring strong investor safeguards. The initiative reaffirms SECP’s commitment to fostering sustainable growth and deepening capital markets as a vehicle for economic development.