SECP consents digital accounts opening for mutual fund investors

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) as part of its efforts to usher in a new era of smart investments has introduced the digital onboarding mechanism for investors of the Asset Management Companies (AMCs).
According to a press release, the SECP in this respect has issued Circular No 35 of 2020 and placed it on its website. The digital onboarding mechanism offers investors not only a seamless account opening process for investments in mutual funds but also eliminates the requirement of physical presence and submission of physical documents. The AMCs are now allowed to conduct an online Customer Verification process for opening online accounts to ensure investor protection and compliance with all the relevant legal and regulatory frameworks.
Furthermore, the mechanism introduces digital verification for authentication of the investor and original identification documents through virtual meeting applications (WhatsApp. Skype, etc.) for online face-to-face interaction on a real-time basis. In addition, a simpler account opening process eliminates the physical signing of different forms and declarations by the investors.
Introduction of Digital Onboarding Mechanism reflects the SECP’s continued commitment towards digitization while ensuring the growth of the non-bank financial sector and capital markets. The virtual onboarding of investors in Pakistan is expected to boost innovation and competition in the mutual fund industry encouraging the use of financial technology and fostering financial inclusion. SECP believes that as the industry transitions towards the digitization of financial services, digital onboarding will soon become the norm in the industry. – TLTP