ExamFinch.com My Study

Study guide

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified

Practice this exam

FIMM Combined Examination FCE

Track your progress as you read

Finished sections get a check mark.

1 Introduction: The FIMM Combined Examination (FCE)

0.1 FCE Exam Facts, Registration Rules and How to Use This Guide

2 Chapter 1: Understanding Collective Investment Schemes in Malaysia

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified 1.2 Investment-Linked Funds Are Not UTS; Industry Growth and History 1.3 Participants in the CIS Ecosystem: Unit Holders, Managers, Trustees, Distributors and Regulators

3 Chapter 2: Introduction to UTS and PRS

2.1 UTS and PRS as Investments: Mechanics, Unit Calculations and How They Compare 2.2 Types of Funds: By Asset Class, Fund Structure and Investment Objective 2.3 Methods of Investing and Dollar Cost Averaging 2.4 Benefits and Disadvantages of Investing in UTS and PRS 2.5 Understanding Risk and the Risks of Investing in Schemes 2.6 Shariah-Compliant Schemes, Their Risks and the Role of the Shariah Advisory Council

4 Chapter 3: Regulatory Framework

3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role 3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS 3.3 Regulation of Scheme Providers and Oversight Functions 3.4 The Deed, the Prospectus or Disclosure Document, and the Product Highlights Sheet 3.5 Portfolio Constraints: Permitted Investments, Liquidity, Borrowing and Exposure Limits 3.6 Regulations for Other CIS: Real Estate Investment Trusts and Exchange-Traded Funds 3.7 Regulation and Duties of the Scheme Trustee 3.8 Regulation of Marketing and Distribution: Distributor Categories, Collection Points and Agency Structure 3.9 Registration of Consultants: Eligibility, Fit and Proper, Duration, Variation and Revocation

5 Chapter 4 (Part 1): Marketing and Distribution — Disclosure and Transactions

4.1 Servicing Investors and the Contents of the Prospectus and Disclosure Document 4.2 The Product Highlights Sheet, Advertising Standards and Account Maintenance 4.3 The Purchase Process and Suitability Assessment Before Personal Advice 4.4 Cooling-Off Rights, Repurchase of Units, Suspension and Switching 4.5 Financing the Purchase of UTS: Process, Safeguards and the Risk Disclosure Statement 4.6 EPF Transfers and Withdrawals for Investment in Approved Unit Trust Funds

6 Chapter 4 (Part 2): Marketing and Distribution — Distributions, Reporting and Service

4.7 Distributable Income, Distributions and NAV, "Buying" a Distribution and Taxation 4.8 Reporting to Investors: Confirmations, Statements, and Semi-Annual and Annual Reports 4.9 Marketing Principles, Delivering Quality Service and Handling Complaints 4.10 The Effect of Inflation, Taxation and Investment Costs on Returns 4.11 Investment Alternatives to UTS and PRS

7 Chapter 5: Code of Ethics

5.1 Compliance, Ethics and the Structure of the FIMM Code of Ethics 5.2 Core Principle 1: Honesty and Integrity 5.3 Core Principle 2: Professionalism 5.4 Core Principles 3 to 5 and Non-Compliance: Conflicts, Disclosure, Confidentiality and Misconduct

8 Chapter 6: Personal Financial Planning

6.1 Personal Financial Planning: Definition, Features, Five Areas and the Six Steps 6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant 6.3 The Consultant's Role in Investment Planning and Advising Clients Through the Life Cycle

9 Chapter 7A: Features and Operations of UTS

7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed 7A.2 UTS Fees, Charges and Expenses, and the Management Expense Ratio 7A.3 Dealing in Units, Valuation, NAV Calculation and Unit Prices 7A.4 Forward and Historical Pricing, and the UTMC's Holding of Units 7A.5 Unit Splits, Distributions and Their Effect on NAV 7A.6 Measuring UTS Performance: Returns, Performance Tables, Risk Measures and Qualitative Factors 7A.7 Operational Aspects of Shariah-Compliant UTS and PRS and the Shariah Contracts Between the Parties 7A.8 Borrowing to Invest in UTS and the Risks of Loan Financing

10 Chapter 7B (Part 1): The Pension Landscape and the PRS Framework

7B.1 The Malaysian Pension Landscape and the Adequacy of Retirement Savings 7B.2 The World Bank's Five-Pillar Pension Framework in the Malaysian Context 7B.3 Key Players: EPF, KWAP, LTAT, Employer-Sponsored Schemes and Annuities 7B.4 Why Malaysia Needs PRS: Ageing, Longevity Risk and the Benefits of PRS 7B.5 The PRS Framework and the Private Pension Administrator (PPA) 7B.6 PRS Structure, the Trust and Deed, Advantages over Other Products, Eligibility and Contributions

11 Chapter 7B (Part 2): PRS Operations

7B.7 The PRS Default Option and Tax Incentives for Members and Employers 7B.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting 7B.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death 7B.10 Switching Between Funds and Transferring Between PRS Providers (Portability) 7B.11 Unclaimed Monies, Death of a Member and PRS Nomination 7B.12 PRS Funds: Number, Core and Non-Core Funds, Objectives, Risk Profiles, Asset Classes, Authorisation and Naming 7B.13 PRS Fees, Charges and Expenses 7B.14 PRS Unit Creation, Forward Pricing, Valuation, Distributions, Performance Measurement and Electronic Communication

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified

Key Takeaways Explain This Topic AI

A CIS lets investors with similar investment objectives pool their savings and entrust them to a professional fund manager who invests them for a shared return.

Malaysia's three unlisted fund types are UTS, PRS and wholesale funds, and their units are bought from and sold back to the Management Company at a price based on NAV.

A wholesale fund is a UTS whose units are offered exclusively to sophisticated investors: accredited investors, high-net-worth entities and high-net-worth individuals.

The three types of fund listed on Bursa Malaysia are closed-end funds, REITs and ETFs, and their market prices are set by supply and demand, so they can differ from NAV.

Malaysia's first ETF, the ABF Malaysia Bond Index Fund, was launched in July 2005.

Last updated: October 2026

The Basic Idea

FIMM's study guide describes a collective investment scheme (CIS) as a generic term for pooled investment vehicles. Investors with similar investment objectives pool their savings and entrust them to a professional fund manager , who invests the pool in a range of assets. The return is shared among those investors.

Three features matter for the exam:

Manager discretion – as with a mutual fund overseas, the fund manager has complete discretion over investment decisions. Investors cannot direct day-to-day management.

Regulated life cycle – the establishment, operation and even winding-down of a CIS are regulated, which protects investors.

Trust structure – a CIS can be structured as a trust, with a Trustee holding the assets on behalf of investors. The fund's assets are segregated from the assets of both the fund manager and the trustee.

Which CIS Exist in Malaysia

  • Under the Securities Commission Malaysia (SC) Under other authorities
  • Unit Trust Schemes (UTS) Pension and provident funds (for example EPF)
  • Private Retirement Schemes (PRS) Investment-linked funds of life insurers (Bank Negara Malaysia)
  • Wholesale funds Pilgrims' funds
  • Real Estate Investment Trusts (REITs)
  • Exchange-Traded Funds (ETFs)

The FCE focuses on UTS and PRS, but you must be able to place them in this wider landscape.

Unlisted Funds

UTS and PRS are unlisted : their units are not quoted or traded on a stock exchange. Key points:

Pricing from NAV – the price is found by valuing the fund's investments to get the net asset value (NAV) and dividing by the number of units in circulation.

Dealing with the Management Company – investors buy units from, and sell units back to, the Management Company, often through a Consultant, instead of through a stockbroker.

Daily publication – Management Companies publish the NAV per unit daily on their websites, newspaper websites and/or FIMM's website. Under single pricing that NAV is both the selling price and the repurchase price.

Usually open-ended – the size of the fund is not fixed and investors can buy and sell at any time. The study guide notes that some Management Companies cap the total units of a fund (the guide calls these "closed-end" funds); once those units are sold, new investors can only buy units that the Management Company has repurchased from other investors.

Unlisted fund Description

UTS A trust arrangement managed by professional fund managers that lets investors with similar objectives pool money to share income or profits from securities, derivatives or other assets

PRS A trust-based retirement scheme in which benefits depend solely on contributions plus declared income, gains and losses on them

Wholesale fund A UTS offered exclusively to sophisticated investors : accredited investors, high-net-worth entities (HNWE) and high-net-worth individuals (HNWI), as defined in the SC's Guidelines on Categories of Sophisticated Investors

Unlisted funds are also grouped by investment objective (income or capital growth) or asset class (equity, fixed income), with finer sub-groups such as small-capitalisation growth funds. These groupings matter because performance is compared within a category.

Listed Funds

Listed funds have units quoted and traded on a stock exchange:

An investor buys or sells through a stockbroker , and the units come from another investor selling in the market.

The market (buyers and sellers) sets the price, so it can differ from NAV .

The Management Company's job is limited to managing the fund under the deed and prospectus.

Listed funds such as closed-end funds and REITs can issue new units through a rights issue or private placement .

Listed fund on Bursa Malaysia What it is

Closed-end fund A listed company that invests in shares of other companies; the number of units is fixed when it lists

REIT A fund that owns and manages income-producing real estate (malls, hospitals, plantations, industrial property, hotels, offices); earnings come mainly from recurring rent

ETF A listed fund that tracks an index, a commodity or a basket of assets; the first Malaysian ETF was the ABF Malaysia Bond Index Fund (July 2005)

Unlisted vs Listed: The Comparison Examiners Like

  • Feature Unlisted (UTS, PRS, wholesale) Listed (closed-end, REIT, ETF)
  • Where you deal With the Management Company, often via a Consultant On Bursa Malaysia through a stockbroker
  • Price basis NAV per unit Market price from supply and demand
  • Price vs NAV Same as NAV under single pricing Can trade above or below NAV
  • Fund size Usually open-ended Fixed units; grows through rights issues or placements
  • Exam traps

A REIT is a listed fund , not an unlisted fund (the first practice question in FIMM's Chapter 1 tests this).

A wholesale fund is not for retail investors.

"Open-ended" does not mean "listed". UTS and PRS are open-ended and unlisted.