SC: Revised guidelines to promote property trust industry

Kuala Lumpur, 13 November 2002

The Securities Commission’s (SC) today released its revised guidelines on property trust funds to encourage the expansion of Malaysia’s property trust industry.

The revised Guidelines on Property Trust Funds supersede the previous edition issued on 26 June 1995 and are available here in PDF.

“We have revised the guidelines to develop and liberalise the operation of property trust funds in Malaysia. This, we hope, will further stimulate the property sector in Malaysia,” said the SC Chairman, Datuk Ali Abdul Kadir.

The revision to the guidelines, among others, allows property trust funds to be open to a wider group of investors. The SC has also liberalised the investment limits in respect of portfolio and, to encourage greater flexibility in asset allocation, now allows property trust funds to invest in more diversified classes of assets, including permissible instruments such as real property-related assets.

There is also a change to the criteria on parties allowed to participate in the property trust industry. The eligibility criteria on participation, previously confined to subsidiaries of financial institutions, is now extended to include subsidiaries of property investment holding companies and property development companies.

Datuk Ali said that aside from these liberalisations, the SC has introduced requirements on spread and concentration of investments to generate risk diversification.

The revised guidelines also contain several new requirements to enhance the level of disclosure and reporting by property trust funds, in line with capital market’s shift to a disclosure-based regulatory regime which emphasises comprehensive and timely disclosure of information to investors.


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