Sindh Fund Management House (SFMH)
The government of Sindh has taken a major step toward improving financial governance with the first historic meeting of the Sindh Fund Management House (SFMH) Board. The meeting, chaired by Sindh Chief Minister Syed Murad Ali Shah, marked the official establishment of Sindh Fund Management House (SFMH) as the central institutional platform responsible for managing designated government funds of the province.
This initiative is aimed at ensuring that public funds are managed with transparency, professional expertise, and a long-term vision for the financial stability of the province.
Official Establishment of Sindh Fund Management House (SFMH)
The Sindh Fund Management House (SFMH) has been formally recognised as the main body responsible for managing key government funds. During the meeting, the Chief Minister emphasised that every rupee of public money must be invested responsibly and transparently.
According to the government, the purpose of creating the Sindh Fund Management House (SFMH) is to ensure that public funds such as pensions, social relief funds, and employee deposits are invested in a professional manner that benefits the people of Sindh over the long term.
Murad Ali Shah highlighted that the government is acting as a trustee of public money and must manage these funds with the highest level of accountability and care.
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Key Officials Present at the Meeting
The first board meeting brought together several senior government officials and policymakers who will play a role in guiding the operations of the Sindh Fund Management House (SFMH).
The meeting was attended by:
- Chief Secretary Asif Haider Shah
- Member Provincial Assembly Shiraz Shaukat Rajpar
- Member Provincial Assembly Sadia Javed
- Chairman Planning and Development Najam Shah
- Secretary Finance Fayyaz Jatoi
These officials discussed strategies to improve fund governance, investment policies, and financial oversight within the province.
Review of the Sindh Fund Management House Act 2021
During the meeting, the board reviewed the legal framework under the Sindh Fund Management House Act 2021, which officially empowers Sindh Fund Management House (SFMH) to manage designated government funds.
The law provides a clear structure for how funds should be managed, how investment decisions should be made, and how accountability should be ensured.
This legal framework helps establish SFMH as the primary institutional platform for professional fund management in Sindh.
Responsibilities and Mandate of the SFMH Board
The board of Sindh Fund Management House (SFMH) has been given several important responsibilities to ensure effective management of government funds.
These responsibilities include:
- Overseeing the operational activities of SFMH
- Approving the annual operational budget
- Reviewing investment policies and operational rules
- Recommending policies to the Sindh government for final approval
- Ensuring that all activities comply with the SFMH Act and approved risk limits
By carrying out these duties, the board aims to maintain financial discipline and ensure the safe growth of public funds.
Government Funds Managed by SFMH
Currently, the Sindh Fund Management House (SFMH) is responsible for managing 16 designated government funds. These funds support pension obligations, social relief initiatives, and employee savings programs.
Some of the major funds under its management include:
- Sindh Provincial Pension Fund – established in 2002
- Establishment of the Sindh Social Relief Fund in 2006
- Sindh General Provident Investment Fund – established in 2007
These funds represent significant financial resources that must be protected and invested wisely for future generations.
Emphasis on Governance and Risk Management
Chief Minister Syed Murad Ali Shah strongly emphasised the importance of strict governance and risk control mechanisms.
He stated that the government is responsible for safeguarding the savings of pensioners, social relief funds meant for vulnerable populations, and the deposits of government employees.
The Chief Minister made it clear that high-risk speculation and irresponsible investment practices will not be allowed. Instead, the focus will remain on secure, transparent, and sustainable investments.
Draft SFMH Investment Policy 2026 Approved in Principle
One of the key outcomes of the meeting was the in-principle approval of the draft SFMH Investment Policy 2026.
This new policy will replace the earlier 2021 guidelines and introduce stronger financial safeguards.
The new policy clearly defines:
- Permissible investments
- Prohibited investment activities
- Risk limits and financial protections
The objective is to ensure that government funds are invested safely while still generating stable long-term returns.
Investment Limits and Safeguards
The SFMH Investment Policy 2026 introduces several protective measures designed to safeguard public capital.
Equity Investment Limits
Investment in equities will be carefully controlled:
- Maximum 15% of the total fund size can be invested in equities.
- Investment in any single scrip cannot exceed 3%.
These limits reduce risk and prevent excessive exposure to stock market volatility.
Mutual Fund Investment Criteria
Investments in mutual funds will only be allowed under strict conditions:
- Minimum AM2+Plus rating
- Minimum fund size of Rs5 billion
This ensures that only well-managed and financially stable funds are selected.
Prohibited Investment Activities
The policy also introduces a complete ban on high-risk activities, including:
- Currency speculation
- Commodity trading
- Unsecured derivatives
These restrictions are designed to protect public money from unnecessary financial risks.
Establishment of the Investment Committee
To ensure professional and timely investment decisions, the board approved the creation of an Investment Committee for the Sindh Fund Management House (SFMH).
The committee will be headed by the Chief Secretary and will perform several important functions.
Its responsibilities include:
- Reviewing investment proposals within policy limits
- Managing the panel of approved brokers and asset managers
- Monitoring portfolio performance
- Submitting regular reports to the board
This committee will help streamline decision-making and improve financial oversight.
Delegation of Operational Powers
The board also decided to delegate certain operational powers to the Investment Committee.
These powers include the authority to issue:
- Bank guarantees
- Standby letters of credit
However, these powers will be exercised within predefined limits and primarily for projects initiated by the government.
The Chief Minister directed that all decisions should be properly documented and based on reliable data. He also stressed that investment decisions must remain transparent and auditable.
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Proposal to Increase Returns on the Sindh Social Relief Fund
The board also reviewed a proposal related to improving the profitability of the **Sindh Social Relief Fund.
Currently, the fund is earning approximately 8.5% profit in a daily profit account.
However, short-term treasury bills currently offer returns between 10.40% and 10.50%.
After reviewing the proposal, the Chief Minister approved the idea in principle to transfer funds to treasury bills in a phased and controlled manner.
He emphasized that social relief funds should not remain idle in low-return accounts if higher secure returns are available.
Strengthening Sindh’s Long-Term Financial Stability
According to Murad Ali Shah, the reforms approved during the first meeting of the Sindh Fund Management House (SFMH) board are part of a broader strategy to strengthen provincial finances.
Professional management of pension funds, employee savings funds, and social relief programs will help build a strong financial backbone for the province.
This strategy will also ensure that future financial obligations can be met without placing additional burden on the public.
Commitment to Accountability and Monitoring
To maintain transparency and accountability, the Chief Minister directed the board to submit quarterly progress reports to his office.
He emphasized that every investment decision should be traceable, documented, and aligned with international best practices in fund management.
This monitoring system will ensure that Sindh Fund Management House (SFMH) continues to operate responsibly and efficiently.