Media Releases
Published Date: 08 April 2011

MAS Issues Revised Code on Collective Investment Schemes

Singapore, 8 April 2011…The Monetary Authority of Singapore (MAS) has issued the revised Code on Collective Investment Schemes (Code), together with its response to public feedback received from its public consultation on proposed amendments to the Code released in May 2010.

2   In revising the Code, MAS conducted discussions with industry associations and market practitioners and has carefully considered the extensive feedback received. MAS thanks all respondents for their constructive and useful feedback. (Click here to view MAS' response to the feedback received (139.7 KB) and the revised Code (906.5 KB)).

Key Changes

3   The key changes include:

A. Strengthening Core Investment Requirements

i. introducing a list of permissible investments for funds;
ii. strengthening safeguards on the use of financial derivatives and counterparty requirements;
iii. enhancing guidelines on securities lending activities;
iv. enhancing requirements for funds investing in structured instruments;

B. Introducing New Guidelines for Certain Fund Categories

v. establishing new guidelines for funds which track an index;
vi. introducing the concept of weighted portfolio maturities for money market funds;

C. Other Safeguards to Enhance Investor Protection

vii. standardising the methods used to calculate any performance fees imposed;
viii. introducing principles on the naming of funds; and
ix. prohibiting the use of simulated past performance data.

4   MAS believes that the revisions provide greater clarity and increase the flexibility for fund managers in managing their funds, while enhancing safeguards for retail investors.

5   MAS will continue to engage industry players and ensure that the regulatory regime for funds keeps pace with product innovation and industry developments, as well as regulatory developments in major fund jurisdictions.

Transitions and Implementation

6   The revised Code will come into effect on 1 October 2011 and will apply to all authorised schemes other than structured product funds. In view of industry’s feedback that structured product funds have customised structures which require time and potentially higher costs to unwind, MAS will allow such funds to comply with the revised Code by 1 April 2012 or be grandfathered. Structured product funds that are grandfathered may not take in new subscription monies from retail investors on or after 1 April 2012.

7   MAS will recognise a new foreign scheme if, amongst others, it is subject to investment guidelines which are substantially similar to those set out in the revised Code.

8   Amendments will be made to the Notice on Investment-Linked Life Insurance Policies (MAS Notice 307) taking into account the changes in the Code. The changes will apply to investment-linked life insurance policy sub-funds (ILP sub-funds) from 1 October 2011, while structured product ILP sub-funds will be subject to the same transitional provisions as structured product funds.