31 January 2018

On 1 January 2018, the Monetary Authority of Singapore (“MAS”) issued a revised Code on Collective Investment Schemes (“CIS Code”). The revised CIS Code introduces specific rules for authorised funds that invest solely in gold, silver and platinum (“Precious Metals Funds”). Changes to the CIS Code were also made to enhance and refine the regulatory framework for retail funds, which would impact both authorised and recognised funds in Singapore, as well as carry into effect certain operational changes and clarify certain requirements applicable to real estate investment trusts (“REITs”). To ensure consistency in the regulatory requirements for collective investment schemes and sub-funds of investment linked policies (“ILP”), MAS is similarly applying these changes to the ILP sub-funds to protect the interests of ILP policyholders.

By way of background, MAS issued a Consultation Paper on Proposed Amendments to the Code on Collective Investment Schemes on 10 November 2016 seeking comments on the proposed changes to the CIS Code. On 15 December 2017, MAS released its Response to the feedback received on its Consultation Paper. In its Response, MAS provided clarification on some of the changes.

The following is an overview of the key changes to the CIS Code.

  • Additional requirements for Precious Metals Funds and no investment caps on gold, silver and/or platinum: With effect from 1 January 2018, MAS will impose requirements on Precious Metals Funds in addition to the requirements for fund approval and prospectus registration which apply to all retail offers of units in a collective investment scheme. For example, a Precious Metals Fund investing in gold and silver is required to follow the London Bullion Market Association prices and good delivery rules. MAS will allow Precious Metals Funds to invest in gold, silver and/or platinum without imposing any limits.
  • Fund managers to set up internal credit assessment standards and process and disclose the foregoing fact in prospectuses: With effect from 1 July 2018, MAS will require fund managers to:
    • set up internal credit assessment standards and put in place a credit assessment process to ensure its investments are in line with these standards, and provide a statement in the prospectus disclosing the foregoing fact; and
    •  provide a statement in the prospectus that information on its credit assessment process would be made available to investors upon request.
  • Additional disclosure requirements in semi-annual and annual reports of funds carrying out securities lending and repurchase transactions: MAS will require additional disclosure requirements in the semi-annual and annual reports of a fund which intends to carry out securities lending or repurchase transactions (“repo”). Matters to be disclosed include the amount of securities on loan as a proportion of total lendable assets and of the fund’s assets under management, and the absolute amounts of the repo book and the reverse repo book. These additional requirements will take effect for the first annual report for the financial year ending on or after 31 December 2018.
  •  Extending CIS Code disclosure requirements to prospectuses of recognised funds: The CIS Code provides for additional disclosure requirements for the prospectus and semi-annual and annual reports of authorised funds. MAS had proposed to extend these additional disclosure requirements to recognised funds. With effect from 1 February 2018, MAS will extend the additional disclosure requirements under the CIS Code only to prospectuses of recognised funds, but not to their semi-annual and annual reports.
  • REITs to hold first AGM within 18 months of authorisation: With effect from 1 January 2018, a REIT is required to hold its first AGM within 18 months of its authorisation instead of its constitution.
  • Aligning redemption period for bond and money market funds: With effect from 1 January 2018, MAS will align the payment periods of redemption proceeds, and allow all funds, except property funds and hedge funds, to pay out redemption proceeds within seven business days from the receipt of the redemption request. 
  • REITs may issue summary financial statements: MAS has clarified in the CIS Code that REIT managers may prepare summary financial statements to supplement the full financial statements and report. A REIT manager should still prepare and give unitholders the option to request a copy of the full financial statements and report within one month from the notification of the availability of the statements and reports. Unitholders should also be allowed to opt for hardcopies of the full financial statements and reports for future financial years at no cost. 
  • REITs may send annual reports by electronic means: MAS has clarified that a REIT may send its accounts and reports to unitholders by electronic means, e.g. via emails, electronic storage medium and websites. However, unitholders should still be given the option to request for hardcopy accounts and reports. The trustee should also make available hardcopies of the accounts and reports to any unitholder who requests for them within two weeks of the request. Unitholders should also be allowed at any time to opt for hardcopies for all future reports and accounts at no cost to them. When sending accounts and reports by electronic means, a REIT remains subject to the Listing Manual requirements as well as the provisions of its trust deed. 
  • Clarification on naming of index funds: MAS has amended the CIS Code provision on the naming of index funds by removing the term “ETF”. This is to avoid any misinterpretation that index funds must always be traded on an organised exchange or that funds traded on an organised exchange must be index funds.
  •  Applying amendments to ILP: MAS will apply the amendments to the sub-funds of ILP issued by insurers under MAS Notice 307.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg:


Download PDF