Mutual Funds

Key players in a Mutual Fund

A mutual fund is set up either in the form of a trust or an investment company. The trust is established by the Asset Management Company (AMC). The trustee holds the property of the trust for the benefit of its unit holders. Whereas, under the investment company structure, the mutual fund is established as a public listed company. The AMC, as sponsor of the mutual fund, appoints its board of directors to manage its affairs, and a custodian for holding all the assets of the investment company. An AMC is licensed by the SECP and is eligible to operate the mutual fund and manage its investments.

Asset Management Company

An Asset Management Company is a Non-Banking Finance Company licensed by the SECP for the management of mutual fund and for the benefit of the unit holders.


Participants are the ones investing in a mutual fund and anyone holding valid Pakistani computerized national identity card is eligible to become participant to a mutual fund.


A trustee in the case of Mutual funds is a holding service who has administrative power for managing the money, property or assets used in mutual funds. The trustee can be an individual person, member of the board of directors, a company or a bank appointed with the approval of the SECP. They are trusted to make decisions in the beneficiary’s best interest.


A custodian generally acts as a caretaker or watchdog mainly responsible for monitoring the operations of the mutual fund and actions of the fund manager and other parties related to the mutual fund. A custodian ensures that a mutual fund is being managed in accordance with the requirements stipulated under the regulatory framework and the constitutive documents of the mutual fund.


A registrar of a mutual fund may be an individual or a firm / company. The AMC may itself act as a registrar, or appoint the registrar to perform following functions:

  1. Periodically maintaining and updating the Register of unit holders;
  2. Dealing with requests for transfer, transmission, issue, and redemption of units as well as keeping a record of changes in particulars/information/data with regard to the unit holders;
  3. Issuing account statements and certificates to unit holders;
  4. Issuing income distribution warrants and units to unit holders over  re-investment of dividends;
  5. Maintaining archives of lien/ pledge/ change on units, transfer/ switching of units, Zakat; and
  6. Keeping a record of changes of address/ other particulars of the unit holders.

Shariah Scholar

Shariah scholar of a mutual fund is appointed by AMC and approved by Federal Shariah Islamic Board His responsibilities are but not limited to:

  1. Fool-proof management and smooth operation of the Mutual fund.
  2.  Compliance to Islamic Principles.
  3. Periodic check and balance on all Shariah compliant products released by the AMC.
  4. Advising the AMC on any new development in Islamic Shariah as a result of Ijtahad and recommending a corrective action plan to the AMC in order to alter the terms and conditions as a result.
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