The Securities and Exchange Commission of Pakistan (SECP) has taken a key step to promote the country’s capital market by allowing Asset Management Companies (AMCs) to invest in Government of Pakistan (GoP) Ijarah Sukuk listed and traded through the Pakistan Stock Exchange (PSX). This decision is aimed at enhancing mutual fund participation and broadening investment avenues for money market schemes.
The SECP issued Circular No. 36 of 2025 on Friday, addressing Chief Executive Officers of AMCs, the Mutual Funds Association of Pakistan, and trustees of Collective Investment Schemes (CIS). The circular supersedes previous directives, Direction No. 17 of 2023 and Direction No. 22 of 2024, relating to the categorization of open-end CIS.
Under the revised framework, Asset Management Companies are now authorized to invest in one-year GoP Ijarah Sukuk with maturities exceeding six months and up to one year. The SECP has stipulated that such investments must comply with conditions designed to maintain the risk profile and regulatory standards of money market schemes.
Specifically, the weighted average time to maturity of the net assets, including government securities, must not exceed 90 days. Additionally, fund managers are required to include in their monthly reports disclosures of actual exposure or investments in one-year GIS, calculated as a percentage of net assets. All other conditions applicable to money market schemes, including those related to risk management, remain unchanged.
According to SECP officials, the move is intended to encourage wider participation of mutual funds in the Sukuk market while maintaining prudent investment practices. The inclusion of listed Sukuk as an investable instrument provides a secure, tradable avenue for AMCs and allows investors to benefit from reliable returns backed by government securities.
Market analysts noted that this step could contribute to deepening Pakistan’s capital markets by increasing liquidity in listed Sukuk and strengthening investor confidence. With growing interest in structured and Shariah-compliant investment instruments, allowing AMCs to allocate funds to one-year GIS could attract both domestic and institutional investors.
The SECP emphasized that this initiative aligns with its broader agenda to modernize capital market frameworks and provide mutual funds and collective investment schemes with diverse, low-risk investment opportunities. By leveraging the PSX platform, the regulator aims to enhance transparency, market efficiency, and access to government-backed investment products.
This development follows a period of active Sukuk issuances by the government, which have raised significant funds to support fiscal requirements and public sector financing. Analysts expect that facilitating AMC participation in listed Sukuk will further promote market-based financing and strengthen the integration between mutual funds and government securities.
The SECP’s latest circular marks a notable step in reinforcing the regulatory environment for mutual funds while supporting sustainable growth of the capital market. Fund managers and market participants are expected to comply with the prescribed conditions to ensure investments remain within the regulatory and risk management framework established for money market schemes.
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