Friday 29 Mar 2024
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KUALA LUMPUR (Dec 21): The Securities Commission Malaysia (SC) is amending its Guidelines on Unit Trust Funds to enable retail funds to invest in and offer a wider range of investment instruments and activities.

These amendments to liberalise the unit trust fund framework will take effect on March 1, 2022 and will enable management companies to develop more innovative products, the capital market regulator said in a statement on Tuesday (Dec 21).

The key amendments to the guidelines include expanding the list of permissible investments by unit trust funds, enhancing the operational processes in managing a fund and providing further clarity on existing requirements for market participants.

Other amendments include allowing unit trust funds to undertake more activities for the purpose of efficient portfolio management, while risk management requirements at enterprise and fund levels have also been strengthened — including the requirement for fund information to be made available on the management companies' websites.

The new framework will support an investment ecosystem that is more diversified and provide a catalyst for product offerings as part of wealth management solutions to meet investors' retirement objectives, including the offering of wealth decumulation products, the SC said.

"These enhancements will enable retail funds to offer more diverse offerings to meet the demand and risk appetites of a wide range of investors. This will encourage the growth and development of unit trust management companies and also, enable investors to rebalance their short- and long-term objectives with more diversified investment offerings," said SC chairman Datuk Syed Zaid Albar.

"More importantly, this will bridge the regulatory gap between domestic and international offerings and allow local funds to remain competitive in the face of a rapidly evolving market environment," he added.

According to the SC, the amendments to the guidelines took into account its findings following an extensive benchmarking exercise and feedback received from a public consultation process. It has also engaged with key stakeholders to ensure a seamless implementation of the amendments.

The liberalisation is also in line with its Capital Market Masterplan 3's aspiration to become a capital market that is relevant, efficient and diversified in the next five years, it said.

Consequential amendments to the Guidelines on Private Retirement Schemes and Guidelines on Exchange-traded Funds will also be implemented, with appropriate modifications, it added.

Unit trust funds, according to the SC, continue to be the largest component of the Malaysian Collective Investment Scheme industry. As at Oct 31, 39 locally incorporated management companies had been approved to offer 734 unit trust funds with a total net asset value of RM551.36 billion.

Edited ByTan Choe Choe
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