SECP notifies Employee’s Contributory Funds rules

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced Employee’s Contributory Funds (Investment in Listed Securities) Regulations, 2018, a statement said on Wednesday.

The new regulations are aimed at improving safety regime for the employees, contributing to various contributory funds, while keeping in view the growth perspective of the return on such funds, it added.

Previously, the employees’ contributions were regulated under the Employee’s Provident Fund (Investment in Listed Securities) Rules, 2016.

The Companies Act, 2017, enhanced the scope of investment out of various contributory funds, instead of just provident fund, it said.

This necessitated the notification of the Employee’s Contributory Funds (Investment in Listed Securities) Regulations, 2018. The new regulations were prepared after extensive consultations, it added.

With continuous innovation in equity and debt markets and development of new products by non-banking finance companies for better returns, contributory funds now have better choices available in the market.

As risk and return go hand in hand, the SECP with a view to protecting the hard-earned money of the employees’ has notified these regulations.

The new regulations prescribe requirements regarding investment out of contributory funds maintained by the companies. They have also addressed major issues of the market participants comprehensively.