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SECP allows Modaraba companies to charge management Fee – Alfalah Securities Limited

Karachi: The Securities and Exchange Commission of Pakistan (SECP) has allowed Modaraba management companies to charge a management fee out of the net annual profit of modaraba, provided that not less than 90% of its total profits in the year were distributed to the certificate holders.

According to Alfalah Securities Limited, the 1995 circular, Modaraba companies were barred from charging management fee from the operating profit of modaraba, unless accumulated losses of the modaraba, if any, were wiped off. This restriction has been withdrawn by issuing a new circular on November 30, 2011

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