In a significant move to strengthen the country’s financial markets, the Securities and Exchange Commission of Pakistan (SECP) has greenlit the operationalization of the Capital Market Development Fund (CMDF). The fund, along with its detailed Terms of Reference (TORs), aims to address pressing development needs in the capital market while aligning with global best practices.

The fund’s main goal is to raise financial literacy and public awareness, helping retail investors understand and access opportunities in Pakistan’s capital markets. Officials believe this initiative will not only improve financial inclusion but also provide a new avenue for meeting the economy’s credit requirements.

Beyond educating investors, the CMDF will focus on building capacity among market participants and extending outreach to regions and demographic groups that have traditionally been underserved by capital market initiatives.

To jumpstart the fund, major market institutions—including the Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), Central Depository Company (CDC), and Pakistan Mercantile Exchange (PMEX)—have pledged an initial seed capital of Rs. 30 million. In addition, each will contribute 1% of their annual revenue to support ongoing market development efforts.

Management of the CMDF will fall under the Institute of Financial Markets of Pakistan (IFMP), which will operate under the guidance of a Steering Committee made up of representatives from IFMP, PSX, NCCPL, CDC, and PMEX. The committee will oversee governance, strategic direction, and all activities funded through the CMDF.

The fund was formally unveiled at a consultative workshop titled “Unlocking Capital Market Potential for Banks” on August 18, 2025, attended by Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue. Analysts suggest that, if effectively implemented, the CMDF could play a pivotal role in deepening Pakistan’s capital markets and attracting broader investor participation.