SECP Directs Asset Management Companies to Keep Sales Load Below 3% of NAV per Unit

The Securities and Exchange Commission of Pakistan (SECP) has directed to all asset management companies to ensure that the cumulative sales load doesn’t exceed 3 percent of net asset value (NAV) per unit. This is where the offering document of the collective investment scheme permits charging of sales load. The SECP has issued notification in this regard here on Thursday. The SECP directed to AMCs to charge sales load maximum up to 3 percent of NAV per unit if investor approaches directly for investment or where transactions are done through a third-party online distribution portal/ website, and may charge sales load maximum up to 1.5 percent of the NAV per unit where transactions are done through AMC’s own online distribution portal or website. According to the notification, the AMC shall ensure following complete disclosures along with requisite documents: Sales load means front end load deducted at the time of investment or back end load charged at the time of redemption from the CIS. However, the load charged upon redemption and which forms part of the CIS property shall not classify as sales load. This circular shall come into force with immediate effect and non-compliance will be dealt in accordance with prevalent regulatory framework, said by the SECP.