Pakistan: in 2001 our firm undertook a Study of Mutual Fund Development in Pakistan for the Securities and Exchange Commission of Pakistan and the Asian Development Bank, taking around one and a half man months.  The focus of the study was to identify improvements to market practice that were needed, bearing in mind other competing savings media within Pakistan and likely developments in the sector; to identify potential barriers to mutual funds’ development and how the development of mutual funds in Pakistan could be better facilitated in the future; to assess existing and draft fund regulations against international standards (IOSCO) and identify any gaps or weaknesses, within the context of the existing and likely future development of Pakistan’s capital markets; and identify improvements to regulatory practice that were needed, within the context of the SECP’s existing powers, structure and operation.  Further, training in fund regulatory techniques was also to be provided.

The work was undertaken through two visits to Pakistan.  The first was to undertake a survey of the market and review of the legal and fiscal environment affecting mutual funds, their accounting treatment, and the operation and powers of the SECP and to submit a report identifying barriers to funds development (particularly taxation), making recommendations for improvements to the legal and regulatory framework (including improved disclosure) and for improving regulatory capacity.  The second visit was to present the key findings and recommendations to the regulator and then to market participants at events in Karachi and Lahore and to deliver training for the SECP in fund regulatory techniques.   At the time of our project there was one open ended mutual fund in Pakistan: there are now nineteen.