The Securities and Exchange Commission of Pakistan (SECP) has launched a new category of mutual funds, titled Infrastructure Schemes, under the framework of open-end collective investment schemes. The initiative is designed to channel long-term domestic savings into critical infrastructure development, a sector that continues to face a significant financing shortfall in Pakistan.
This development comes after extensive consultations with the Mutual Funds Association of Pakistan (MUFAP) and other industry stakeholders. The proposal for this new category was initially floated during the Mutual Fund Focus Group Session 2025, and its finalization marks an important milestone under SECP’s Fund Management Department Roadmap 2025–26. The roadmap focuses on deepening the role of Pakistan’s capital markets in addressing infrastructure financing needs, strengthening investor protection, and promoting sustainable economic growth.
Pakistan currently requires close to $15 billion annually to modernize and expand its infrastructure, which covers sectors such as energy, transportation, logistics, water, sanitation, healthcare, and education. However, current spending hovers at only 2.1 percent of GDP, significantly below the global benchmark of 8 to 10 percent. This financing gap has long been recognized as a barrier to economic development, competitiveness, and job creation. By introducing a distinct regulatory category for infrastructure-focused mutual funds, SECP aims to provide a structured, transparent, and attractive investment vehicle that mobilizes long-term savings for projects of national importance.
Under the new framework, Asset Management Companies (AMCs) will be able to structure infrastructure schemes as equity, debt, or hybrid funds. Eligible sectors for investment extend beyond traditional areas such as energy and transport, covering a broad spectrum including industrial parks, affordable housing, healthcare, education, tourism facilities, and essential utilities. This wide scope is intended to ensure that capital markets can play a meaningful role in supporting inclusive and sustainable infrastructure development.
To safeguard investors, the framework has built-in protections and requirements. For perpetual schemes, a minimum fund size of Rs100 million has been mandated, while closed-end schemes with maturities of more than three years will require AMCs to maintain seed capital of Rs25 million. Closed-end funds will also have the flexibility to offer periodic subscription and redemption windows after one year, with all conditions clearly stated in their offering documents.
In terms of asset allocation, the rules specify that at least 70 percent of a scheme’s net assets must remain invested in infrastructure securities on a quarterly basis. For closed-end funds, some flexibility has been introduced in Net Asset Value (NAV) disclosures, allowing updates at intervals not exceeding one month. This approach balances transparency with the unique nature of infrastructure investments, which often involve longer-term commitments.
The SECP has also introduced a transparent fee structure to prevent excessive costs for investors. Management fees are capped at three percent per annum for equity schemes and 1.5 percent for debt schemes, while hybrid funds will follow a weighted average based on their asset mix. To further protect investors, no sales load will be permitted, though contingent load may be applied in cases of early redemption under closed-end structures.
By carving out a dedicated regulatory space for infrastructure schemes, the SECP is not only addressing the country’s pressing financing needs but also providing investors with new opportunities to participate in projects that directly impact economic development and national progress. The move reflects a broader effort by the regulator to align Pakistan’s financial markets with international best practices, while also ensuring that capital formation supports long-term growth priorities.
The launch of this category is being seen as a strategic step in bridging Pakistan’s infrastructure financing gap. With rising demands for modern utilities, transport systems, and social infrastructure, the ability to mobilize domestic savings into this sector could be transformative. At the same time, the framework ensures investor confidence through robust disclosure standards, risk management safeguards, and capped fee structures.
This initiative underlines SECP’s commitment to fostering innovation in the mutual funds sector, supporting capital markets as a driver of growth, and providing structured pathways for investment into areas that hold the potential to reshape Pakistan’s economic landscape.