The Securities and Exchange Commission of Pakistan (SECP) has announced the operationalization of the Capital Market Development Fund (CMDF), a major initiative aimed at strengthening investor awareness, enhancing financial literacy, and supporting the long-term growth of Pakistan’s capital markets. The Fund, along with its Terms of Reference (TORs), has been formally approved to align with international best practices and address the immediate developmental needs of the sector.
The primary purpose of CMDF is to increase public understanding of capital market opportunities, equipping retail investors with the knowledge required to make informed financial decisions. By improving financial literacy, the initiative seeks to broaden participation in the capital markets, offering citizens an alternative funding channel while supporting the credit requirements of the broader economy.
In addition to financial literacy, the Fund will focus on capacity building for market participants and expanding outreach to demographic and geographic segments that remain largely untapped. By targeting underserved areas and groups, CMDF aims to deepen the investor base and diversify sources of financing within Pakistan’s financial ecosystem.
The operational framework for the Fund ensures shared responsibility among leading market institutions. The Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company (CDC), and Pakistan Mercantile Exchange (PMEX) will contribute Rs. 30 million as seed capital. Furthermore, each of these institutions will allocate 1% of their annual revenue to sustain the Fund, demonstrating a long-term commitment to capital market development.
The Institute of Financial Markets of Pakistan (IFMP) has been tasked with managing the Fund, under the supervision of a dedicated Steering Committee (SC). This committee will include representatives from IFMP, PSX, NCCPL, CDC, and PMEX, providing governance, oversight, and strategic guidance for CMDF activities. Such a collaborative governance structure is expected to ensure transparency, accountability, and efficiency in utilizing the Fund’s resources.
The official launch of CMDF took place during a consultative workshop titled “Unlocking Capital Market Potential for Banks,” held on August 18, 2025. The event was inaugurated by the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, who emphasized the critical role of well-functioning capital markets in driving economic growth, financial inclusion, and sustainable development.
Industry observers believe the Fund represents a timely intervention at a stage when Pakistan’s capital markets require renewed investor confidence and broader participation. By creating a structured mechanism to fund educational campaigns, training programs, and outreach initiatives, the SECP is positioning the capital market as a more attractive and accessible investment avenue for both individuals and institutions.
The establishment of CMDF also underscores Pakistan’s alignment with global practices where similar funds have played a vital role in fostering investor literacy and deepening capital markets. Enhanced awareness among investors is expected to not only broaden participation but also improve the quality of investment decisions, leading to greater market stability and resilience.
With the backing of key capital market institutions and the oversight of SECP, CMDF is set to become a cornerstone in Pakistan’s financial sector reforms. Its focus on education, inclusivity, and capacity building will play an important role in shaping the future of the country’s capital markets, providing a stronger foundation for economic growth and financial empowerment.