In a move towards enhancing accessibility and efficiency in the financial sector, the Securities and Exchange Commission (SECP) of Pakistan has given its approval for Asset Management Companies (AMCs) to open digital pension accounts.
The decision is outlined in Circular No. 03 of 2021, which allows Pension Fund Managers registered under the Voluntary Pension System Rules, 2005, to digitally initiate individual pension accounts.
Under the circular, the SECP has granted permission for Pension Fund Managers to utilize the digital account opening procedures specified by AMCs, as outlined in Circular 35, 2020, dated December 30, 2020.
This regulatory development reflects a progressive step toward modernizing the pension account opening process, providing investors with a convenient and streamlined method to manage their pension accounts digitally. The move is aligned with global trends in digital finance and aims to make financial services more accessible to the public.
While promoting digitalization in pension account management, the SECP emphasizes the importance of adhering to Anti-Money Laundering (AML) regulations. Pension Fund Managers are required to comply with the Anti-Money Laundering Act of 2020 and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Regulations of 2020, as stipulated by the SECP.
The circular ensures that the introduction of digital processes does not compromise the integrity of the financial system, and it underlines the significance of maintaining robust measures to prevent and combat money laundering and terrorist financing.
This development is expected to facilitate investors, making it more convenient for them to initiate and manage their pension accounts digitally. The integration of digital account opening procedures aligns with the ongoing global shift towards digital financial services, promoting financial inclusion and efficiency.
The SECP, as the regulatory body overseeing the securities and exchange activities in Pakistan, continues to introduce measures that align with technological advancements and industry best practices. The decision to allow digital pension account opening reflects the commission’s commitment to fostering a more accessible and technologically advanced financial ecosystem in the country.
Pension Fund Managers are urged to stay updated with the AML Act of 2020 and AML/CFT Regulations of 2020, ensuring compliance with any amendments or additional requirements issued by the SECP. This move by the SECP is anticipated to contribute to the growth and modernization of Pakistan’s financial sector, aligning it with global standards and catering to the evolving preferences of investors.
