Capital Market and Securities Authority

The issuance of Collective Investment Scheme units falls under capital markets. A key requirement, in the case of Unit Trusts, is for a sponsor to appoint a Manager and a Custodian (Trustee) of the Fund. These two service providers will enter into an agreement in the form of Trust Deed and appoint other service providers like Auditor, Legal Advisers, Selling and Receiving agents and Registrar of unit holders. This arrangement of a Unit Trust Scheme enables pooling resources or money from a cross section of investors with similar objectives and constructs a diversified portfolio of investment on behalf of contributors. Umoja Unit Trust is an example of such schemes. For closed ended CIS, a public offer takes the form of shares. Investors in such CIS can only exit by identifying the buyer of their shares. Examples of closed ended CIS include TCCIA Investment Co. Ltd and National Investment Co. Ltd

Issue/Listing of Collective Investment Schemes

Unit Trust

The procedure to establish a unit trust:

• The proposed Trustee and proposed Manager must make written applications to the Authority for authorization to act as Trustee and Manager respectively of the Unit Trust;
• After getting approval to act as Trustee and Manager of the Unit Trust they must send the following documents to the Authority in order to get authorization to establish the Unit Trust:
  • Complete an Application Form
  • Draft Scheme Particulars, which contains information on the scheme calculated to invite offers by the public to subscribe for units in the scheme
  • The Trustees latest audited report;
  • A letter from the Trustee consenting to its appointment as Trustee of the scheme;
  • Draft Trust Deed;
  • Any other material contracts such as any Management Agreement, Custodian Agreement, Employment contracts and any agreement between the manager and investment adviser;
  • The Memorandum and Articles of Association of the Management company (or in draft form if the company has not yet been incorporated);
  • Full particulars regarding the actual or proposed Trustee;
  • Full particulars regarding the actual or proposed Manager;
  • Full Particulars of the Investment Adviser (if any) to satisfy the Authority of the advisors experience, honesty and integrity;
  • The name of any other third parties involved in the unit trust and sufficient information to satisfy the Authority of the third parties experience, honesty and integrity;
  • Any other document which may be requested by the Authority;
  • Payment of application fees.

Open Ended Investment Company

The procedure to establish an Open Ended Investment Company (OEIC)

• The proposed Manager and proposed Custodian must make written applications to the Authority for authorisation to act as Manager and Custodian respectively of the OEIC (see section 5 and 6).
• After getting approval to act as Manager of the OEIC, the Manager must send the following documents to the Authority in order to get authorisation to establish the OEIC:
  • Application Form;
  • The Draft Memorandum and Articles of Association of the OEIC;
  • Draft Prospectus, which contains information on the scheme calculated to invite offers by the public to subscribe for shares in the scheme (See schedule 2 for information to be included in Prospectus);
  • The Custodian's latest audited report;
  • A letter from the Custodian consenting to its appointment as Custodian of the scheme;
  • Any other material contracts such as any Management Agreement, Custodian Agreement, Employment contracts and any agreement between the manager and investment adviser;
  • The Memorandum and Articles of Association of the Management company (or in draft form if the company has not yet been incorporated);
  • Full particulars regarding the actual or proposed Manager;
  • Full Particulars of the Investment Adviser (if any) to satisfy the Authority of the advisors experience, honesty and integrity. A copy of any Investment Advisory Agreement should be submitted to the Authority;
  • Full Particulars of the Custodian, if any to satisfy the Authority of the Custodians experience, honesty and integrity. A copy of the Custodian Agreement should be submitted to the Authority;
  • The name of any other third parties involved in the unit trust and sufficient information to satisfy the Authority of the third parties experience, honesty and integrity;
  • Any other documents which may be requested by the Authority;
  • Payment of application fees.