What is bn92?

Board Notice (BN) 92 of 2014 deals with advertising, marketing and information disclosure requirements for Collective Invest Schemes (CIS). Although it is primarily aimed at the managers of CIS (managers), it also has implications for advisors who distribute CIS funds to their customers.

What is the meaning of collective investment scheme?

In simple words, a collective investment scheme is where a group of people come together and pool their money into an asset. The returns earned on the asset is then divided amongst the group based on the proportion of their investment.

Is a unit trust a collective investment scheme?

Under section 237 of the Act (Other definitions), a unit trust scheme is a collective investment scheme under which the property is held on trust for the participants by the trustee. An AUT is constituted by a trust deed, entered into by the manager and trustee.

Is ETF a collective investment schemes?

ETFs are classified as a regular security and are Collective Investment Schemes. Because ETFs are not derivatives, they do not require any daily margin calculation or mark-to- market, and can be traded using existing systems without the need for further risk assessment tools.

Do collective investment trusts pay dividends?

Because collective trust funds are only available as retirement plan investments, they do not pay out dividends or capital gains. All income and earnings from the sale of securities are reinvested back into the fund with a resulting increase/decrease in share price.

Is a closed ended fund a collective investment scheme?

A closed-end fund (CEF) or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. Unlike open-end funds, new shares in a closed-end fund are not created by managers to meet demand from investors.

What are the advantages of a collective investment scheme?

Collective Investment Schemes allow you to get your money back in a prompt manner at the relevant market related prices. You get regular information on the value of your investment and you may be able to obtain information on the specific investments that are made by the Collective Investment Scheme.

Do CITs pay dividends?

Unlike mutual funds, CITs are not required to pay out interest, dividends, and realized capital gains to investors because only tax-qualified investors may invest in CITs.

Are all Ucits ETFs?

Be aware that not every ETF is a UCITS ETF either. ETFs issued outside of the EU (think Switzerland, Sweden or the US) may not comply, in which case they’ll be missing the magic acronym from their name.