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3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS

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FIMM Combined Examination FCE

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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

3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS

Key Takeaways Explain This Topic AI

Division 5 of Part VI of the CMSA addresses unit trust schemes and prescribed investment schemes, while Part IIIA of the CMSA sets out the SC's powers over the PRS industry.

Failing to provide the product information required by section 92A(1) of the CMSA can lead to a fine of up to RM3 million, imprisonment of up to ten years, or both.

The PRS Regulations, made under section 139ZI of the CMSA, took effect on 19 March 2012.

The UTF Guidelines and PRS Guidelines are issued by the SC under section 377 of the CMSA.

FIMM's regulatory instruments are the FIMM Consolidated Rules, the Investment Management Standards, the Code of Ethics, the Registration Manual and the Guidance on Simple Language and Effective Drafting Practices for Prospectus.

Last updated: October 2026

The Layers of Rules

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The Capital Markets and Services Act 2007 (CMSA)

The CMSA sets out the regulatory requirements for Scheme Providers, schemes, Scheme Trustees, Employer Trustees and the PRS Administrator . The Private Pension Administrator (PPA) is the approved PRS Administrator and performs the duties prescribed in the CMSA.

Where the SC's powers sit in the Act:

  • Product CMSA location
  • Unit trust schemes and prescribed investment schemes Division 5 of Part VI
  • Private retirement schemes Part IIIA

Key CMSA requirements for UTS and/or PRS:

SC approval is needed to act as a Scheme Provider.

Money received from unit holders and PRS members is kept in trust accounts .

A UTMC must register a prospectus with the SC before it is issued.

PRS members' contributions vest as accrued benefits to which they are entitled.

PRS Providers must preserve members' accrued benefits.

Breaches may be offences punishable by fine and/or imprisonment, and the SC may direct compliance.

The SC may issue regulations and guidelines to flesh out the Act's general requirements.

Section 92A(1): information for investors

Section 92A(1) specifies the information a person investing in a scheme must receive: the key characteristics of the product, the obligations of the parties, the risks and the essential terms. Failure to comply can bring a fine of up to RM3 million, imprisonment of up to ten years, or both.

The PRS Regulations

Section 139ZI of the CMSA empowers the SC to make regulations on PRS, the PRS Administrator, PRS Providers, Scheme Trustees and Employer Trustees. The PRS Regulations took effect on 19 March 2012 and cover:

  • registration and lodgement of the deed, disclosure document and Product Highlights Sheet (PHS);
  • duties of the PRS Provider, Scheme Trustee and Employer Trustee;
  • indemnity and replacement of a Scheme Trustee;
  • the powers of the court in specific cases; and

the register of members, rights relating to deceased members, members' meetings and prior SC approval to wind up a scheme .

SC Guidelines

Guideline What it does

Guidelines on Unit Trust Funds and Guidelines on Private Retirement Schemes Issued under section 377 of the CMSA ; operational requirements for schemes, Scheme Providers and Trustees; protect investments and safeguard investors

SC Licensing Handbook A Scheme Provider must hold a CMSL for fund management ; Chapter 10 governs outsourcing by CMSL holders, including back-office outsourcing

Guidelines on Compliance Function for Fund Management Companies Apply to those offering digital investment management; Chapter 13 adds rules on risk management, client disclosure, algorithm design and oversight, and custody

Prospectus Guidelines for CIS, Guidelines on PHS, Advertising Guidelines Disclosure and promotion (sections 3.4 and 4.2)

The SC also issues Technical Notes and Practice Notes , some of which apply to schemes. Most rules apply to both UTS and PRS, but some apply to only one (the study guide's Diagram 3.2). The study guide appends a non-exhaustive list of laws and guidelines, and Consultants should watch the regulators' websites for changes.

FIMM's Rules

FIMM instrument Content

FIMM Consolidated Rules (FCR) Consolidates earlier FIMM guidelines, by-laws and guidance notes on marketing and distribution; sets registration requirements for Distributors and Consultants, fit and proper criteria , examination and assessment, the CPD programme, and investigation and disciplinary proceedings

Investment Management Standards (IMS) Standards on specific operational issues that all Distributors must follow unless exempted (for example IMS 1 on the 4.00 pm dealing cut-off time)

  • Code of Ethics Ethical standards and professional conduct for Distributors and Consultants (Chapter 5)
  • Registration Manual Procedures for registering Distributors and Consultants under the FCR

Guidance on Simple Language and Effective Drafting Practices for Prospectus Helps FIMM members meet the SC's Prospectus Guidelines for CIS

Extra Rules for IUTAs and IPRAs That Are Banks

IUTAs and IPRAs that are banks licensed by BNM must also follow:

BNM's Guidelines on Product Transparency and Disclosure , which aim to raise consumer awareness, make disclosure consistent so products can be compared, minimise mis-selling and promote informed decisions.

Guidelines on Investor Protection , issued jointly by BNM and the SC , which require among other things that SC and FIMM fit-and-proper, examination and continuing education standards are met; a register of employees doing capital market activities (and their securities) is kept; complaints are handled under BNM's complaints rules; and customers' money is safeguarded, the contractual relationship is clear and customers know where to seek redress.

Exam Pointers

Part VI Division 5 = UTS; Part IIIA = PRS.

s.92A penalty: RM3 million and/or ten years.

s.139ZI = PRS Regulations (effective 19 March 2012 ).

s.377 = basis for the UTF and PRS Guidelines.

FIMM's practice question treats the CMSA, the Advertising Guidelines, the Prospectus Guidelines and the Licensing Handbook as all relevant to UTS and PRS.