MAS Releases Guidelines for Property Funds

Introduction of property funds will add to breadth and sophistication of Singapore's financial centre

Singapore, 14 May 1999... The Monetary Authority of Singapore (MAS) today issued a set of regulatory guidelines for property funds. The guidelines give guidance to fund managers on the operation of such funds offered for sale to retail investors in Singapore. The introduction of property funds here will widen the range of financial products available to investors, consistent with the efforts to make Singapore a world-class financial centre.

The MAS guidelines take into account the practices in other jurisdictions, the particular circumstances in Singapore, and extensive feedback from financial sector industry associations, fund managers, property consultants and lawyers whom MAS consulted. The guidelines contain provisions to safeguard investors' interests while giving sufficient flexibility to fund managers in investing and managing property funds.

The guidelines lay down the qualifying criteria for managers of property funds; prescribe permissible investments and borrowing limits; stipulate diversification and valuation requirements; and set out the disclosure and redemption requirements. MAS will review and revise the guidelines periodically to keep the guidelines current and market-relevant.

MAS also issued a separate statement outlining the tax treatment for property funds. Property funds will be taxed according to the same general tax principles as ordinary companies or trusts. In addition, the anti-speculation measures under the Income Tax Act announced in May 1996 will not apply to transactions of units/shares in a widely held property fund.

A copy of the guidelines and tax treatment for property funds can be obtained from Singapore Financial Sector Regulations on this website.