SC introduces further steps to liberalise investment management industry

In line with measures to gradually liberalise the investment management industry, the Securities Commission (SC) today introduced a new policy to allow a group of companies or individuals to have interests in more than one unit trust management company (UTMC).

The new policy is introduced via Practice Note 16 of the Guidelines on Unit Trust Funds (Guidelines), which is available on the SC website.

Previously, Practice Note 9 of the Guidelines limits a group of companies to only one UTMC per group.

The present flexibility was introduced in recognition of the growing complexity of shareholding structures within a group of companies and following feedback from the investment management industry.

The new policy comes with certain conditions which include among others, that a shareholder, who could be a group of companies or individuals, can only have control over one unit trust management company. Should the shareholder have interests in another unit trust management company, the shareholder should not be entitled to exercise more than 20% of the voting shares of the unit trust management company in which the shareholder holds a minority interest.

In addition, the shareholder is not allowed to be involved in the day-to-day management of the unit trust management company in which it has a minority interest or be represented at the Board or Investment Committee level.

15 May 2002