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The Discretionary Management Agreement is a crucial document used when a client wishes to delegate investment decision-making authority to a professional investment manager in Pakistan. It establishes the legal framework under which the manager can make investment decisions without seeking prior approval for each transaction, while operating within agreed parameters and investment objectives. This agreement must comply with Pakistani regulatory requirements, particularly those set by the Securities and Exchange Commission of Pakistan (SECP), including the Securities Act 2015 and Non-Banking Finance Companies regulations. The document typically includes detailed investment guidelines, risk parameters, reporting requirements, fee structures, and specific provisions required by Pakistani law. It's particularly important for institutional investors, high-net-worth individuals, and corporate entities seeking professional portfolio management services while ensuring regulatory compliance and risk management.

1. Parties: Identification of the investment manager and the client

2. Background: Context of the agreement and regulatory status of the manager

3. Definitions: Key terms used throughout the agreement

4. Appointment and Authority: Formal appointment of manager and scope of discretionary authority

5. Investment Objectives and Strategy: Overall investment goals and approach

6. Investment Powers and Restrictions: Specific powers granted to manager and any limitations

7. Client Representations and Warranties: Client confirmations regarding their status and authority

8. Manager Representations and Warranties: Manager confirmations regarding licenses and capabilities

9. Fees and Expenses: Management fees, performance fees, and other charges

10. Reporting and Valuations: Regular reporting obligations and valuation methodology

11. Risk Disclosures: Mandatory risk warnings and disclosures

12. Conflicts of Interest: Management of potential conflicts

13. Confidentiality: Protection of confidential information

14. Term and Termination: Duration and termination provisions

15. Indemnification: Mutual indemnities and limitations of liability

16. Anti-Money Laundering: AML compliance requirements

17. Notices: Communication protocols and contact details

18. Governing Law and Jurisdiction: Pakistani law and dispute resolution provisions