02-22-2010, 11:14 PM
it was't there that question is been asked for the rules made by "pakistan mutual fund authority" or under such authority or was it? what if i was sitting in america and i somehow managed to ask it from you the same question how will you guide me through no you cannot? and what will i write in my paper? coz sir kamran said in pakistan it cannot be so it cannot be?..the answer should't be no if it was't there (in pakistan) ya i agree answer should have been that in here mutual funds cannot be considered but in some states it can be, dont you think it is the right answer? anyways books and internet stuff is't based on imagination dont forget every one goes practical after going through books. i will see k i should consider all the comments questions answers by viewing it happend in pakistan thats it. dont you like it when someone talks about the whole world? how about keeping in view you are following such standards adopted by whole world than why just limited to pakistan?..anyways jazakALLAH for your concern
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kamranACA</i>
<br />Dears
Question is about mutual funds units and is certainly not asked about how all the world has to treat in varying level of statutory provisions.
We certainly have to see IFRSs and apply them in the given situation. Certainly mutual funds are governed by different regulatory approaches at various spots of the globe. There is no universally applicable solution to any question that requires taking into account IFRSs and local regulations simultaneously.
What IAS-7 has required is well know but the "critic" appears to be at gross ignorance of how mutual fund industry is governed in Pakistan. He should learn what is meant by open end fund and what r close end funds; how these are governed; how their securities/units are sold, traded or redeemed and what technical issues are pertinent in both cases.
If a close end fund is listed, the investment made by such fund makes no difference at all for pricing, trading volume and demand/supply of its own shares. I believe the "critic" does not understand it at all.
In open end funds, although NAV and redemption price is dependent
Upon underlying assets but the characteristic of its own units has nothing to do with what assets it has at any point of time. Certainly no unitholder can raise his hand with any claim to get T Bills held by such Fund.such T Bills are not his investment; rather his investment is open end funds' own units. He can only retire his units and convert them into cash. Here every jurisdiction can vary with reference to required process for redemption. In Pakistan, law allows six days after the request for redemption is made to act upon such request. So it is not readily convertible highly liquid instrument. Further, the ultimate redemption price will depend upon NAV of exact that day when request for redemption will be acted upon that is never known beforehand with precision. So, the amount of convertible cash can not at all be exactly known at any reporting date.
Since both conditions are not met, these are not cash equivalent.
I believe very few people know technically that how mutual fund industry operates in Pakistan. I would request readers and objectors to learn "mutual fund industry" in Pakistan, and then assess the validity of answer.
In Pakistan mutual fund units cannot be treated as cash equivalent.
A lay man of course cannot understand it merely by reading internet stuff or on the basis of bookish knowledge.
Don't divert people from correct solution if you are not familiar with a topic.
We see when these persons are taught after they make "damaagh ka dahi" then they say "in Florida this happens this way". Bhaai mutual funds are regulated by local laws every where. There is no aafaaqi solution.
Don't please mess up a simple thing merely for lack of knowledge on the issue.
Regards,
Kamran.
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<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by kamranACA</i>
<br />Dears
Question is about mutual funds units and is certainly not asked about how all the world has to treat in varying level of statutory provisions.
We certainly have to see IFRSs and apply them in the given situation. Certainly mutual funds are governed by different regulatory approaches at various spots of the globe. There is no universally applicable solution to any question that requires taking into account IFRSs and local regulations simultaneously.
What IAS-7 has required is well know but the "critic" appears to be at gross ignorance of how mutual fund industry is governed in Pakistan. He should learn what is meant by open end fund and what r close end funds; how these are governed; how their securities/units are sold, traded or redeemed and what technical issues are pertinent in both cases.
If a close end fund is listed, the investment made by such fund makes no difference at all for pricing, trading volume and demand/supply of its own shares. I believe the "critic" does not understand it at all.
In open end funds, although NAV and redemption price is dependent
Upon underlying assets but the characteristic of its own units has nothing to do with what assets it has at any point of time. Certainly no unitholder can raise his hand with any claim to get T Bills held by such Fund.such T Bills are not his investment; rather his investment is open end funds' own units. He can only retire his units and convert them into cash. Here every jurisdiction can vary with reference to required process for redemption. In Pakistan, law allows six days after the request for redemption is made to act upon such request. So it is not readily convertible highly liquid instrument. Further, the ultimate redemption price will depend upon NAV of exact that day when request for redemption will be acted upon that is never known beforehand with precision. So, the amount of convertible cash can not at all be exactly known at any reporting date.
Since both conditions are not met, these are not cash equivalent.
I believe very few people know technically that how mutual fund industry operates in Pakistan. I would request readers and objectors to learn "mutual fund industry" in Pakistan, and then assess the validity of answer.
In Pakistan mutual fund units cannot be treated as cash equivalent.
A lay man of course cannot understand it merely by reading internet stuff or on the basis of bookish knowledge.
Don't divert people from correct solution if you are not familiar with a topic.
We see when these persons are taught after they make "damaagh ka dahi" then they say "in Florida this happens this way". Bhaai mutual funds are regulated by local laws every where. There is no aafaaqi solution.
Don't please mess up a simple thing merely for lack of knowledge on the issue.
Regards,
Kamran.
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