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7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed

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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

7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed

Key Takeaways Explain This Topic AI

A UTS is a non-incorporated collective investment scheme whose operation is governed by a deed registered with the SC.

The three parties to a UTS deed are the UTMC, the Trustee and the unit holders, and the study guide calls unit holders the most significant because they supply the capital.

The value of a unit equals the market value of the fund's net assets divided by the total units in circulation.

A change that may materially prejudice unit holders requires a unit holders' meeting and approval by not less than two-thirds of all unit holders.

Examples of materially prejudicial changes include changing the fund's nature or objective, risk profile or distribution policy, and introducing or increasing fees or charges.

Last updated: October 2026

The Structure of a UTS

A UTS is a non-incorporated collective investment scheme that pools investors' savings to be invested and managed for their mutual benefit. Professionals manage the investments, and controls such as the Trustee and other oversight functions protect unit holders. Fund features vary, but the structure is the same for every UTS.

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The Deed as the Operational Reference

Each UTS is governed by a deed setting out the rights and obligations of the UTMC, Trustee and unit holders . The UTMC (usually the issuer and promoter) must operate the fund according to the deed and prospectus; the Trustee monitors operations and safeguards unit holders, who have remedies for breaches.

The deed covers the fund's operating aspects:

  • Operating aspects in the deed
  • Fees and charges Distributions and NAV
  • Dealing in units Measuring performance
  • Unit valuation and pricing Base currency
  • Calculation of NAV Financial period
  • Creation and cancellation prices Termination of the fund
  • Selling and repurchase prices Forward and historical pricing
  • Unit splits and NAV

It also outlines the maximum fees , unit holders' meetings , permitted investments , how a unit's value is determined and how buying and selling prices are calculated. It states the fund's investment objective ; if the strategy targets a style, asset class, sector, market or region, the UTMC must invest an appropriate portion accordingly.

The deed must not prejudice the interests of unit holders (or any class of them). Because a UTS is a trust , the deed must be registered with the SC and meet the minimum requirements of the UTF Guidelines, creating a trust between the UTMC and the Trustee.

The Parties to the Deed

Party Main roles

UTMC Reports to the Trustee on buying, selling and managing investments; promotes and sells units directly or through IUTAs, CUTAs and Consultants; services unit holders; buys back units ; keeps the accounting records needed to compute NAV and distributions; maintains the register of unit holders

Trustee Safeguards the fund's assets and ensures they are invested under the deed; supervises the UTMC; is independent and can remove a UTMC that fails to manage the fund properly; approves and monitors financial transactions; holds title documents; collects income

Unit holders The most significant party, because they supply the capital; the source of the UTMC's fees (from which Consultants are paid) and the Trustee's fees; each unit ranks equally with every other unit of the fund

Value of a unit Value of a unit = Market value of net assets Total units in circulation \text{Value of a unit} = \frac{\text{Market value of net assets}}{\text{Total units in circulation}} Value of a unit = Total units in circulation Market value of net assets ​

Investors buy units by completing the application form in the prospectus.

Modifying the Deed

The deed can be changed, but only under the UTF Guidelines' safeguards:

The UTMC must inform unit holders of any change to the fund.

Where a change may materially prejudice unit holders, the UTMC or Trustee must convene a unit holders' meeting , and approval of not less than two-thirds of all unit holders must be obtained.

If the change requires amending the deed, it is done by a supplementary deed , which must be registered with the SC .

Changes that may materially prejudice unit holders

  • Change Example
  • Nature or objective of the fund A Malaysian equity income fund becomes a global technology growth fund
  • Risk profile Allowing substantial derivative exposure for the first time
  • Distribution policy Moving from regular income distributions to none
  • New category of fee or charge Introducing a performance fee
  • Increase in fees or charges Raising the maximum annual management fee
  • Applying It

A UTMC wants to change a conservative bond fund into a high-yield bond fund that may invest in lower-rated paper. This changes the risk profile and possibly the objective , so it may materially prejudice unit holders. The UTMC must convene a meeting, win approval from at least two-thirds of unit holders, and register a supplementary deed with the SC. The Trustee watches the process to protect unit holders.

Exam Pointers

Three parties to a UTS deed: UTMC, Trustee, unit holders.

The Trustee (not FIMM or the SC) can remove a UTMC that fails to manage the fund in line with the deed.

Two-thirds approval for materially prejudicial changes; supplementary deed registered with the SC .

FIMM's practice question: the main role of the Trustee is to safeguard the assets of the UTS and the investors' interests .