SC releases guidelines to facilitate online unit trusts transactions

The Securities Commission (SC) today released a set of guidelines to enable online transactions of unit trusts.
The “Guidelines on Online Transactions of and Online Activities in relation to Unit Trusts” (Guidelines) applies to persons intending to:

  • disseminate electronic prospectus and electronic application forms;
  • provide for online transaction of unit trusts; or
  • communicate electronically with investors and the public on unit trusts-related matters.

The Guidelines were developed in line with recommendations in the SC’s Consultation Paper on “Framework for the Implementation of Electronic Commerce in the Capital Market” as well as the broader Capital Market Masterplan aspirations to promote continued technological innovation in the capital market and enhance the efficiency of market infrastructure, with a view to accelerate the development of the market.

By allowing transactions of units in unit trust funds to be done electronically, the SC expects unit trust management companies to have greater opportunity to take advantage of technology to provide value-added services to investors.

Parties wishing to offer online unit trust activities are required to seek the SC’s approval, which includes providing a declaration from the internal auditor on the systems and controls, and another declaration from the director that the online facility complies and will continue to comply with the Guidelines must be submitted to the SC.

In line with the issuance of the Guidelines, consequential amendments have been made to the existing Guidelines on Advertisement and Promotional Material.

An Investor’s Guide has also been released in conjunction with the new Guidelines.

The “Investors Guide on Online Unit Trust Investment” (Investor’s Guide) sets out the type of information that investors should be aware of, and their rights and responsibilities when transacting and communicating online with unit trust management companies.

Both the Guidelines and Investor’s Guide are available on the SC’s website here.

24 November 2004