KUALA LUMPUR (April 16): The Securities Commission Malaysia (SC) will revise the authorisation process for retail feeder funds to allow faster time to market for these investment schemes.

The SC said in its 2019 annual report, which was released today (April 16), that for funds meeting certain parameters, their management companies will be able to submit applications without going through a pre-submission consultation process with the SC once they file documentations with the SC on their target fund selection and monitoring, as well as risk management process.

"The approach outlines the SC’s expectations in operationalising the requirements for retail feeder funds to provide clarity to management companies and reduce time to market. The enhanced process is targeted to be rolled out in 2020,” the SC said.

Unit trust funds remain the largest component of the Malaysian collective investment schemes industry. Against a competitive investment landscape, the regulator said continued wealth preservation and creation through the unit trust segment requires intermediaries to widen the breadth and depth of products and services.

For 2019, the SC said today it embarked on efforts to enhance the unit trust regulatory framework to improve the competitiveness and efficiency of the industry. 

"These efforts are intended to benefit investors by enabling issuers to refocus on bringing more diverse product offerings to the market in a more efficient manner,” the SC said.

The SC said it commenced a holistic review of the Guidelines on Unit Trust Funds to ensure that the requirements are aligned to international standards and major fund jurisdictions. 

According to the SC, the review is envisaged to enable more product innovation and internationalisation of funds while enhancing market competitiveness, hence, offering investors greater choice and access to investments appropriate to their financial goals.

"As part of the review, the SC sought feedback from the unit trust industry through the Federation of Investment Managers Malaysia and carried out benchmarking studies. Following this, the SC held targeted consultations with focus groups comprising selected unit trust management companies. 

"Subsequently, in 2020, the SC will organise a public consultation, which will offer an opportunity for all stakeholders to provide comments,” it said.

According to the SC, the Malaysian fund management industry's total assets under management rose to RM823.2 billion in 2019 from RM743.6 billion a year earlier amid an increase in market value, driven by robust performance of small and mid-cap equities and higher net injection from dividend reinvestment. 

Total net sales for the unit trust segment amounted to RM30.5 billion in 2019, a decrease of 19.5% from RM37.9 billion, it said.