Oversight December 2018 - SFC Consultation Conclusions on Proposed Amendments to Code on Unit Trusts and Mutual Funds

Introduction

On 6 December 2018 the Securities and Futures Commission (SFC) published the long-awaited consultation conclusions entitled Consultation Conclusions on Proposed Amendments to the Code on Unit Trusts and Mutual Funds (Consultation Conclusions). The Consultation Conclusions reflect the SFC’s intentions following on from its proposals to amend provisions of the Code on Unit Trusts and Mutual Funds (UT Code) to update the regulatory regime for SFC-authorised collective investment schemes (SFC-authorised funds). The proposals were first set out in a consultation paper entitled Consultation Paper on Proposed Amendments to the Code on Unit Trusts and Mutual Funds (Consultation Paper) issued in December 2017. The Consultation Paper was the subject of our Oversight issued in January 2018. During the one-year period after the publication of the Consultation Paper, the SFC has engaged with relevant industry stakeholders and formed a technical focus group comprising industry experts. The technical focus group provided feedback on the SFC’s proposals regarding derivatives investments.

The SFC has decided to implement the majority of the proposals set out in the Consultation Paper with appropriate modifications or clarifications. This Oversight covers the key points in the SFC’s Consultation Conclusions on Proposed Amendments to the Code on Unit Trusts and Mutual Funds (UT Code), in particular the major changes made by the SFC to the revised UT Code since its consultation in response to some of the comments from the industry stakeholders.

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