SECP allows money market fund managers to invest in longer term government Sukuk

PAKISTAN: The Securities and Exchange Commission of Pakistan (SECP) is allowing money market fund managers to invest in longer term government Ijarah Sukuk, with maturity exceeding six months for one-year tenor instruments – so long as the weighted average time to maturity of the fund’s net assets is capped at 90 days, for continued liquidity and low-risk positioning. This relaxation, to allow controlled exposure to longer term Islamic instruments, is effective immediately and is part of SECP’s broader effort to enhance wider participation of mutual funds in Shariah compliant government instruments.

This move aims to help ensure retail investors in money market funds will stay protected via strict maturity limits. The relaxation comes after SECP in October 2025 announced money market funds can invest in short term corporate Sukuk along with commercial papers – capped at 20% of the fund’s net assets.