The Securities Commission in Malaysia has introduced a new regulation called Single Pricing Regime (SPR) which goes into effect today. What this means is that from today onwards, there will only be one price – the Net Asset Value (NAV) per unit – quoted for selling and redeeming unit trusts.
This regulation has been expected in the unit trust industry for some time.
While it poses an additional challenge to and increases the level of competitiveness for the fund management companies and their consultants, it should be a move welcomed by investors because there is now greater transparency of the charges paid by the investors.
The key changes that investors should see with the SPR are:
a) A disclosure of the maximum rate of sales and redemption charges;
b) The fund management companies are required to state in their prospectus that “investors may negotiate with the distributors for lower sales charges”;
c) The fund management companies are required to disclose the sales and redemption charges clearly in the sales confirmation and redemption advices;
d) Investors will only see the NAV per unit of the funds published in the newspapers or on the fund management companies’ respective corporate websites;
e) Fund management companies that practise giving discounts and rebates (including bonus units) to investors are no longer able to do so.
If you require more information on how this SPR will affect you as an investor, please get in touch with your unit trust consultant.