[size=28]SC introduces new initiatives to improve unit trust industryBy Yimie Yong / theedgemarkets.com | July 19, 2016 : 7:09 PM MYT
KUALA LUMPUR (July 19): The Securities Commission Malaysia (SC) announced new initiatives to enhance the competitiveness and efficiency of the Malaysian unit trust industry today, chief of which are the introduction of an expedited approval process for non-complex retail unit trust funds, and the removal of the need for prospectuses to be renewed on a yearly basis.
A non-complex fund is a fund other than a feeder fund, a fund of funds, a cross-border fund, or a fund that invests in derivatives (other than for hedging purposes), warrants and convertibles (other than those which are capable of being converted into new shares) or structured products, said the SC in a statement.
The regulator said amendments to the relevant guidelines reflecting these initiatives will take effect on Aug 15.
According to the SC, the new initiatives are to enhance the competitiveness and efficiency of the Malaysian unit trust industry.
Currently, the authorisation period for retail unit trust funds can take up to three months as the 15 business days authorisation process only begins after all complete information is received.
With the expedited framework, the regulator said applications for non-complex retail funds will receive authorisation from the SC within 10 business days after submission.
Applicants are responsible for ensuring that applications are complete and accurate at the time of submission and the SC will authorise their funds based on such representations. The existing authorisation framework will continue to apply for all other types of retail funds.
In addition to enhancements in the approval process, the SC said the 12-month validity period for prospectuses will also be removed.
"Issuers no longer need to reissue and reprint the prospectus on an annual basis and will benefit from savings on reissuance costs. The amendments will enable issuers to only provide updates on changes in the prospectuses via notifications, supplementary prospectuses or, where appropriate, replacement prospectuses," said the SC.
According to the regulator, this will also help ensure changes are highlighted to investors and they receive such information expeditiously.
"Certain information previously disclosed in prospectuses such as information on fund performance will be reflected in the Product Highlights Sheets that are provided for investors to enable them to make an informed investment decision," it added.
Meanwhile, the SC pointed out that consultations with the industry and Federation of Investment Managers Malaysia have supported the SC's view that unit trust issuers ought to be provided greater flexibility in offering funds to investors while empowering the industry to be more responsible by encouraging self-discipline and market discipline.
Investors stand to benefit from this new process as issuers are able to refocus their efforts into bringing more product offerings to the market in a shorter time, it added.
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