11 Questions
What is the primary purpose of Collective Investment Schemes?
To pool investments from multiple investors to benefit from group investing
What is one of the advantages of investing in Collective Investment Schemes?
Lower transaction costs
Who is responsible for managing the portfolio risk in Collective Investment Schemes?
Professional fund managers
What is a benefit of investing in Collective Investment Schemes besides lower transaction costs?
Risk diversification
What is a potential result of investing in Collective Investment Schemes?
More attractive returns due to better portfolio risk management
Which Act regulates Collective Investment Schemes in Singapore?
Securities and Futures Act 2001
What is the Code on Collective Investment Schemes?
A non-statutory document that sets out the best practices on the management of CIS
What is the consequence of breaching the requirements of the Code on CIS?
Revocation of authorisation or recognition of the CIS
What is the effect of the legislative amendments introduced to the SFA in 2018?
Widening the definition of a CIS
Who is the regulatory authority responsible for supervising the offer, management and distribution of CIS in Singapore?
Monetary Authority of Singapore (MAS)
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
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.
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.
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