The Security and Exchange Commission of Pakistan SECP has issued detailed requirements and procedures for convening meeting of the unit holders of open end and closed end mutual funds in order to strengthen mutual fund governance but during this development – it now allows more power to unit holders to make or break decision at mutual funds.
A statement issued here by the Commission said that this was in pursuance to the concept of unit holders’ meeting introduced by the (SECP) through amendment to the regulatory framework for mutual funds industry. In terms of the procedure introduced, an Asset Management Company (AMC) managing the mutual fund is responsible for conducting and chairing the meeting.
The AMC is required to publish notice of the meeting through newspaper at least seven days prior to the date of such meeting. The trustee of the mutual fund is required to attend every meeting of unit holders and is responsible to ensure that all regulatory requirements are complied with.
Unit holders of a mutual fund have been given the right to either cast their vote on a resolution by physical presence in the meeting, through proxy or by post. Introduction of the detailed procedure for convening the unit holders meeting is expected to strengthen the unit holders’ right to vote on important matters concerning mutual funds and is considered an important step forward for a more conducive regulatory framework to fuel growth of the mutual funds industry.
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