Malaysia | Guidelines on Unit Trust Funds and Unlisted Capital Market Products under the Lodge and Launch Framework

Public Consultation on proposed amendment to Guidelines on Unit Trust Funds

The Securities Commission Malaysia had, on 11 November 2020, issued a consultation paper on its proposed amendments to the Guidelines on Unit Trust Funds as part of its effort to facilitate greater competitiveness in the industry and provide investors access to a wider range of products, while maintaining adequate investor protection.

The key aspects the Securities Commission Malaysia is considering include the universe of permitted investments and various operational requirements on the fund manager.

The consultation paper is open for feedback by the public until 10 January 2021.

Launch of new framework to facilitate offering of Islamic funds with waqf features

A new framework has been launched by the Securities Commission Malaysia on 12 November 2020 to facilitate the offering of Islamic funds with waqf features to enable growth in the Islamic social finance segment.

The requirements on an Islamic fund with Waqf feature can now be found in Chapter 14 of the revised Guidelines on Unit Trust Funds and Chapter 6 of the revised Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework.

Amendment to the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework

In addition to the introduction of Chapter 6 on waqf featured fund framework, the Securities Commission Malaysia has also introduced two new paragraphs to Section B: Part I Wholesale Fund.

The following new obligations are imposed on a fund management company or the operator of the wholesale fund where it invests in real estate (as defined in the therein) outside Malaysia:

• to ensure that the real estate outside Malaysia is managed by a manager that is licensed, registered, approved or authorised to manage the foreign real estate in its home jurisdiction: paragraph 2.20A.
• valuation on the real estate located outside Malaysia must be conducted at least once every three years: paragraph 4.01A.
• notwithstanding the 2nd bullet point above, the value of the real estate located outside Malaysia must be monitored and valuation must be carried out when the change in value of any of the underlying real estate exceeds a reasonable pre-determined threshold: paragraph 4.01B.