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Collective Investment Schemes (CIS) Quiz

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Collective Investment Schemes (CIS) Quiz

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Questions and Answers

What is the primary purpose of Collective Investment Schemes?

To offer low-risk investment options to conservative investors

To manage individual investment portfolios for high net worth investors

To provide investment advice to individual investors

To pool investments from multiple investors to benefit from group investing (correct)

What is one of the advantages of investing in Collective Investment Schemes?

Increased portfolio management responsibilities

Higher transaction costs

Lower transaction costs (correct)

Lower risk returns

Who is responsible for managing the portfolio risk in Collective Investment Schemes?

The investment scheme's advisory board

The fund manager's assistant

The individual investors

Professional fund managers (correct)

What is a benefit of investing in Collective Investment Schemes besides lower transaction costs?

Risk diversification Signup and view all the answers

What is a potential result of investing in Collective Investment Schemes?

More attractive returns due to better portfolio risk management Signup and view all the answers

Which Act regulates Collective Investment Schemes in Singapore?

Securities and Futures Act 2001 Signup and view all the answers

What is the Code on Collective Investment Schemes?

A non-statutory document that sets out the best practices on the management of CIS Signup and view all the answers

What is the consequence of breaching the requirements of the Code on CIS?

Revocation of authorisation or recognition of the CIS Signup and view all the answers

What is the effect of the legislative amendments introduced to the SFA in 2018?

Widening the definition of a CIS Signup and view all the answers

Who is the regulatory authority responsible for supervising the offer, management and distribution of CIS in Singapore?

Monetary Authority of Singapore (MAS) Signup and view all the answers

What is the purpose of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations?

To provide guidelines for the offer of investments in CIS Signup and view all the answers

Study Notes

Collective Investment Schemes (CIS)

CIS are investment pooling vehicles that allow investors to invest together to benefit from lower transaction costs, risk diversification, and potentially more attractive returns due to professional fund management.

Legislation and Regulations

CIS are regulated under the Securities and Futures Act 2001 (SFA) and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations (SFR(CIS)).
Regulatory authority: Monetary Authority of Singapore (MAS) supervises the offer, management, and distribution of CIS in Singapore.

Code on Collective Investment Schemes

A non-statutory document that sets out best practices for the management, operation, and marketing of CIS in Singapore.
Managers and trustees are expected to observe the Code.
Breaching the Code's requirements does not lead to criminal proceedings, but MAS may consider these breaches when determining whether to revoke or suspend CIS authorization or recognition.

Legislative Amendments

Effective from October 2018, the definition of a CIS has been expanded to include arrangements that are in substance “collective” investments, posing similar risks to investors as CIS already regulated under the SFA.

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Description

Test your knowledge of Collective Investment Schemes, a type of investment vehicle that allows individuals to pool their funds and benefit from lower costs, diversified risk, and potentially higher returns. Learn about the advantages of CIS and how they are managed by professional fund managers.