SC Reviewing Guidelines On The RM490 Billion Unit Trust Industry

Investment products are constantly changing and evolving to new market demands, one such product that needs much improvement in terms of guidelines is the unit trusts. With a Nett Asset Value at close to half a trillion ringgit, Malaysians have been turning to unit trust as a safe investment tool for decades. But fund managers would like if the investment position is kept up with global trends so that they can just as competitive.

The Securities Commission Malaysia has been made aware and have formalised strategies to address the issue, it has now sought feedback from the public on its proposed amendments to the Guidelines on Unit Trust Funds. The two-month consultation process is part of the SC’s ongoing efforts to enhance market competitiveness and ensure the continuous development of the Malaysian unit trust industry.

Under the proposed amendment, the SC has outlined 30 proposals as part of the consultation paper, ranging from liberalising the types of investments a fund can consider, to amendments on strengthening risk management processes of fund management companies. The SC is considering enhancements to operational requirements, including dealing in and valuation of a fund. To ensure consistency in policy with unit trust funds, the SC is also considering making some of the proposals applicable to exchange-traded funds (ETF) and private retirement schemes (PRS). These proposed new enhancements will facilitate greater competitiveness in the industry and provide investors access to a wider range of products, while maintaining adequate investor protection.

In undertaking the review of the Unit Trust Guidelines and formulating this Public Consultation Paper, the SC has taken into consideration the evolving needs of investors, development and regulatory requirements in other jurisdictions, as well as feedback gathered from various stakeholder engagement sessions, including at the recently concluded industry dialogue.

Unit trust funds are the largest component of the Malaysian Collective Investment Scheme industry. As at 30 September 2020, there are 39 locally-incorporated management companies approved to offer 693 unit trust funds with a total net asset value (NAV) of RM490.3 billion.

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