THE REGULATORY FRAMEWORK

The unit trust industry is governed and regulated by the Securities Commission (SC) with Capital Market Services Act 2007 (the Act) and the Securities Commission's Guidelines on Unit Trust Funds dated March 2008 (the Guidelines). The SC is empowered to ensure compliance with the Act and the Guidelines. The Act and Guidelines govern the operations and administration of unit trust funds and protect the interests of unit holders. All parties involved in a unit trust scheme must comply with the Act and Guidelines including all relevant laws.

A unit trust fund is also governed by a deed of the fund. The deed incorporates the covenants required by the Act and the Guidelines. The deed is a legal document that spells out in detail the manner in which the scheme is to be administered, the valuation and pricing of units, the keeping of proper accounts and records, the collection and distribution of income, the rights of unit holders, the duties and responsibilities of the manager and trustee with regard to the operations of the scheme, and the protection of unit holders’ interests.

The appointment of the trustee, the directors and the manager, investment committee members, Shariah committee members and panel of advisors of the fund must receive the approval of the SC.