Corporate And Regulatory

Asset Management Companies Rules, 1995 (Pt. 2 of 2)

Status: In force


(5)          amounts receivable on subscription;

(6)          bank loan and overdrafts or other forms of borrowings;

(7)          amounts payable on redemption;

(8)          distribution payable;

(9)          total value of all assets;

(10)        total value of all liabilities;

(11)        net asset value;

(12)        number of units issued; and

(13)        net asset value per unit.

3.            Income statement

(1)          Total investment income net of withholding tax, broken down by category.

(2)          Total other income, broken down by category.

(3)          Element of income and capital gains in prices of units sold less those in redemption.

(4)          An itemized list of various costs which have been debited to the scheme including,

•             fees paid to the management company;

•             remuneration of the trustee;

•             amortization of formation costs;

•             director's fee and remuneration;

•             safe custody and bank charges;

•             auditor's remuneration;

•             borrowing expenses;

•             other amounts paid to any connected person of the scheme;

•             legal and other professional fees; and

•             any other expense borne by the scheme.

(5)          Taxes.

(6)          Amounts transferred to and from reserves.

(7)          Net income to be carried forward for distribution.

4.            Distribution statement :

(1)          Amount brought forward at the beginning of the period.

(2)          Net income for the period.

(3)          Interim distribution per unit and date of distribution.

(4)          Final distribution per unit and date of distribution.

(5)          Undistributed income carried forward.

5.            Statement of movements in reserves :

(1)          Value of the scheme as at the beginning of the period.

(2)          Number of units issued and the amount received upon such issuance.

(3)          Number of units redeemed and the amount paid on redemption.

(4)          Any item resulting in an increase or decrease in value of the scheme including,

(i)            surplus or loss on sale of investment;

(ii)           exchange gain or loss;

(iii)          unrealized appreciation or diminution in value of investment; and

(iv)         net income for the period less distribution.

(5)          Amounts transferred to and from the revenue account.

(6)          Value of the scheme as at the end of the period.

6.          Note to the accounts :

The following matters shall be set out in the notes to the accounts :

(1)          Principal accounting policies :

(a)          the basis of valuation of the assets of the scheme including the basis of valuation of unquote and unlisted securities;

(b)          the revenue recognition policy regarding dividend income and other income;

(c)           foreign currency translation, if any;

(d)          the basis of amortization of formation costs;

(e)          taxation; and

(f)           any other accounting policy adopted to deal with items which are judged material or critical in determining the transactions and in stating the disposition of the scheme.

Note.    Any changes to the above accounting policies and their financial effects upon the accounts should also be disclosed.

(2)          Transactions with connected persons :

The following transactions should be disclosed :

(1)          Details of all transactions entered into during the period between the scheme and the management company, or any entity in which these parties or their connected persons have a material interest; and

(2)          Name of any director of the management company of any connected person if such a person becomes entitled to profits from transactions in shares or from management of the scheme and the amount of profits to which such person becomes entitled.

(3)          Borrowings :

(1)          State whether the borrowings are secured of unsecured and the duration of the borrowings.

(2)          Contingent liabilities and commitments of the scheme.

(3)          If the free negotiability of any asset is restricted by statutory or contractual requirements, this must be stated.

7.            Contents of the auditors' report

The report of the auditor should state :

1.            whether in the auditor's opinion, the accounts prepared for that period have been properly prepared in accordance with the relevant provisions of the trust deed and the rules;

2.            without prejudice to the foregoing, whether in the auditor's opinion, a true and fair view is given of the disposition of the scheme at the end of the period and of the transactions of the scheme of the period then ended;

3.            if the auditor is of opinion that proper books and records have not been kept by the scheme or the accounts prepared are not in agreement with the scheme's books and records, that fact; and

4.            if the auditor has failed to obtain all the information and explanations which, to the bet of his knowledge and belief, are necessary for the purpose of the audit, that fact.

8.            Investment portfolio

(1)          Number or quantity of each holding together with the description and market value.

(2)          The total investment stated at cost.

(3)          The value of each holding as a percentage of net asset value.

(4)          Statement of movements in portfolio holdings since the end of the preceding account period.

9.            Performance table

(1)          A comparative table covering the last three financial years and including, for each financial year, at the end of the financial year,

(a)          total net asset value; and

(b)          met asset value per unit.

(2)          A performance record over the last ten financial years; or if the scheme has not been in existence during the whole of that period in which it has been in existence, showing the highest issue price and the lowest redemption price of the units during each of those years.

SCHEDULE  III

See rule 10(2) (a)

CONTENTS OF THE CONSTITUTIVE DOCUMENTS

1.            Name of scheme.

2.            Participating parties:

A statement to specify the participating parties including the asset management company and trustee.

3.            Governing law.

4.            For unit trusts:

(a)          A statement that the deed is binding on each holder as if he had been a party to it and so to be bound by its provisions and authorizes and requires the trustee and the management company to do as required of them by the terms of the deed.

(b)          A provision that a holder is not liable to make any further payments after he had paid the purchase price of his units and that no further liability can be imposed on him in respect of the units which he holds.

(c)           A declaration that the property of the scheme is held by the trustee on trust for the holders of the units pari passu according to the number of units held by each holder. (This may be modified as appropriate for schemes offering income and accumulation units.)

(d)          A statement that the trustee will report to unit holders in accordance with the rules.

(e)          A statement of the manner in which the trustee should retire.

5.            Role of management company :

A statement of list the obligations of the management company in accordance with the rules.

6.            Investment and borrowing restrictions :

A statement of list the restrictions on the investment of the deposited property and the maximum borrowing limit of the scheme.

7.            Valuation of property and pricing :

The following rules on valuation of property and pricing must be stipulated :

(a)          The method of determining the value of the assets and liabilities of the property of the scheme and the net asset value accordingly;

(b)          The method of calculating the issue and redemption prices; and

(c)           The method of pricing and the circumstances under which it can change.

8.            Dealing, suspension and deferral of dealing:

The following must be stated :

(a)          the circumstances under which the dealing of units can be deferred or suspended;

(b)          the maximum interval between the receipt of a properly documented request for redemption of units and the payment of the redemption money to the holder not to exceed six working days; and

(c)           the circumstances under which the dealing may be suspended.

9.            Fees and charges :

The following must be stated :

(a)          the maximum percentage of the initial charge payable to the management company out of the issue price of a unit;

(b)          the maximum fee payable to the management company out of the property of the scheme, expressed as an annual percentage;

(c)           remuneration payable to trustee;

(d)          formation cost to be amortized against the property of the scheme; and

(e)          all other material fees and charges payable out of the property of the scheme.

10.          Transactions with connected persons :

The following must be stated :

(a)          cash forming part of the property of the scheme may be placed as deposits with the trustee or an institution licensed to accept deposits;

(b)          money can be borrowed from the trustee or any other institution provided that the charges are not higher than the normal bank changes; and

(c)           any transaction between the scheme and the management company or any of their connected persons as principal may only be made with the prior written consent of the trustee.

11.          Distribution policy and date :

The approximate date(s) in the calendar year on which annual income, if any, will be distributed.

12.          Annual accounting period :

The date in the calendar year on which the annual accounting period ends.

13.          Base currency :

A statement of the base currency of the scheme.

14.          Modification of the constitutive documents :

A statement of the means by which modifications to the constitutive documents can be effected.

15.          Termination of scheme :

A statement of the circumstances in which the scheme can be terminated.

SCHEDULE  IV

See rule 12(2)

INFORMATION TO BE DISCLOSED IN THE

OFFERING DOCUMENT

Notice :  This list is not intended to be exhaustive. The directors of the schemes or the management company are obliged to disclose any information which may be necessary for investors to make an informed judgment.

Constitution of the scheme

1.            Name, registered address and place and date of creation of the scheme, with an indication of its duration if limited.

Investment objectives and restrictions

2.            Details of investment objectives and policy, including summary of the investment and borrowing restrictions.

If the nature of the investment policy so dictates, a warning that investment in the scheme is subject to abnormal risks, and a description of the risks involved.

Operators and principals

3.            The names and registered addressed of the following parties, where applicable :

(a)          the directors of the asset management company;

(b)          the trustee;

(c)           foreign promoters, if any;

(d)          the distribution company;

(e)          the auditor;

(f)           the registrar; and

(g)          the legal adviser.

Characteristics of units

4.            Minimum investment, if any.

5.            A description of the different, type of units.

6.            Frequency of valuation and dealing, including days.

7.            Application and redemption procedures.

8.            The mode of the unit price announcement.

9.            Procedure for subscribing/redeeming/conversion of units.

10.          The maximum interval between the request for redemption and the payment of the redemption proceeds.

11.          A summary of the circumstances in which dealing in units may be deferred or suspended.

12.          It must be stated that no money should be paid to any intermediary except the unit holder or his authorized representative.

Distribution policy

13.          The distribution policy indicating the time period for distribution of dividend.

Fees and charges

14.          (a)          the level of all fees and charges payable by an investor, including all charges levied on subscription and redemption and conversion, and

(b)          the level of all fees and charges payable by the scheme, including management fee, advisory fee, trustee fee and preliminary and/or floatation expenses.

Taxation

15.          Details of exemptions, taxes levied on the scheme's income and capital including tax, if any, deductible on distribution to unit holders.

Reports and accounts

16.          The date of the scheme's financial year.

17.          Particulars of the reports to be sent to the unit holders.

Warnings

18.          The following statements or warnings must be prominently displayed in the offering documents :

(a)          if you are in any doubt about the contents of this offering document, you should consult your stockbroker, bank manager, legal adviser or other financial adviser.

(b)          A warning that the price of units and the income from them (where income is distributed) may go down as well as up.

General information

19.          A list of constitutive documents and the address where they can be inspected free of charge or purchased.

20.          The date of publication of the offering document.

21.          A statement that the asset management company accepts responsibility for the information contained in the offering document as being accurate at the date of publication.

22.          Details of schemes not authorized must not be shown in the offering document.

Termination of scheme

23.          A summary of the circumstance is which the scheme can be terminated.

 

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