This archive report was first published on 15 June 2020.
June 15, 2020 - In a bid to boost investor confidence, the Capital Markets Authority (CMA) has rolled out new regulations that demand fund managers to offer more transparent information.
The move comes in the wake of a series of high-profile collapses of asset management firms, including those that sold commercial paper and other debt instruments, resulting in significant losses for retail investors.
Under the new guidelines, fund managers are required to use a standardized template when providing details about the value of the assets they manage, how these funds are performing, and how the fund makes its reporting to the Authority.
The regulations also mandate the publication of more specific performance metrics for individual Collective Investment Schemes (CIS), shifting from a more generalized format currently in use.
These draft regulations affect fund managers of institutional funds, including pension and insurance funds, the wealth of high net worth individuals, and independent funds, all grouped under collective investment schemes.
The new rules cover valuation, investment performance measurement, reporting, and other related matters of CISs.
Notably, the guidelines require fund managers to establish comprehensive and documented investment policies to govern how assets held by the scheme are valued.
Additionally, the methodologies used to value each asset type should be clearly spelled out, along with how their performance is calculated and presented.
Furthermore, fund managers are required to prepare and submit a quarterly performance measurement report to the Authority within 21 days after the end of each quarter.
The report shall be made available to all existing and prospective clients and include updated performance and performance-related information, including the correction of material errors.
