Investors, trustees who take active interest more likely to achieve investment objectives
|Investors and trustees who demand high standards from their fund managers and monitor their portfolio actively are more likely get the best from their fund managers. Fund managers, in turn, must always act in their clients’ best interest by providing professional service and preserving the integrity of the fund management industry.|
The Malaysian Association of Asset Managers (MAAM) Chairman Amin Rafie Othman said this at the press conference today to announce the Seminar on Fund Management: Best Practices for Investor Protection to be jointly organised by MAAM and Securities Industry Development Centre (SIDC) on 8 October.
Rafie said everyone from the client to the trustee and fund manager have a part to play in ensuring that investment objectives are met.
He said although recent high-profile lapses by fund managers were isolated cases, both MAAM and the Securities Commission (SC) felt that extra efforts should be put into vigilance and promotion of professionalism.
“The focus on investor education would help clients and trustees select the right manager for their investment objectives while the fund manager would apply high standards and professional conduct in remaining faithful to the investment mandate,” he said.
He also said the SC’s swift enforcement action on the recent case had assured the public that stiff action will be taken against those who breached the law, and served as a deterrent for those who may have illegal schemes in mind.
“MAAM has always stressed that prudential standards and investor protection issues are of paramount importance within the investment management industry, and supports fully the SC’s stand that due diligence should not be compromised and investor confidence be safeguarded at all times,” Rafie said.
He said the MAAM-SIDC Investor Education initiative came about after discussions with the SC and other fund managers on 21 August 2003 to discuss the present state of the industry. A better understanding on the roles of different parties and practical tips on best practices were felt to be important in overcoming any concerns the public may have in using the services of fund managers.
Topics that will be covered in the seminar include the regulator’s expectations, industry best practices and market professionalism in highlighting the need for higher levels of diligence in engaging fund managers and monitoring their performance. Speakers will include the SC, fund managers, trustees, a consulting firm representative and the Employee Provident Fund.
“We would like to ensure that all parties are clear on their roles. Investors and trustees cannot and should not just leave investments without monitoring. Although this sounds basic, a fund manager should provide each client with a regular statement of account of the client’s portfolio and transactions undertaken on his behalf, at least monthly to ensure that the fund manager has acted within the mandate given by the client,” Rafie said.
“A client should expect this and get this. And if custodians are appointed, clients would have the added benefit of also receiving direct reports. Furthermore, clients are encouraged to also regularly request for asset valuation and at the same time take initiative to enhance their knowledge on the relevant investor protection laws,” he added.
Rafie said the pressure to meet investor expectations has made it crucial to ensure that the best fund managers are sought and selected for their market skills, ethics and professionalism.
“The seminar is most likely to benefit investors and trustees to select the appropriate fund manager for their needs and in encouraging active participation in the fund progress towards its objectives.”
“Here at MAAM, we are committed to high standards of service to investors and trustees, and we are proud to say that we are working closely with the SC on several initiatives, with one of them being the Compliance Guidelines for Fund Managers,” he said.
SIDC head Teh Ija Mohd Jalil added that training and education is necessary to enhance professional competence of market professionals and play an equally important role in promoting credibility in the industry.
She also said that investors and trustees should take advantage of this opportunity to attend the seminar which will bring together some of the finest experts in the industry.
The seminar will be held on 8 October 2003 at the SC building. Registration fee is RM450. Interested parties may call tel.: 03- 6204 8667/8669 (SIDC Corporate Services) or email firstname.lastname@example.org. More information on the seminar is available on the MAAM website, www.maam.org.my or the SC website.