National Asset Management Ltd (NAMAL) says it will launch a similar fund to NAMAL Acuity Value Fund (NAVF) for foreigners if regulations are relaxed.
Unit Trust Association President, S. Jayavarman, who is also the CEO at NAMAL, told the Sunday Times FT that presently they cannot market unit trusts like NAVF to foreigners because of certain regulations, which have not kept pace with this industry’s growth.
“Up to 2007, foreigners were not allowed to buy government securities such as treasury bills and treasury bonds because of certain regulations. Similarly they were not allowed to invest in unit trusts, because the Central Bank (CB) felt that foreigners can buy government securities though unit trusts (as the unit trusts could invest in such securities). Then the association requested CB to let unit trusts investments be permitted to foreigners and it was allowed provided that unit trusts in turn can only invest maximum up to 20% in government securities,” he explained.
He said when the CB permitted foreigners to purchase 10% of outstanding treasury bills and treasury bonds in the market, the rule for unit trusts became redundant. “So the foreigners were allowed to buy state securities anyway and as such we requested CB to lift the 20% rule on unit trusts to be better able to market our products to foreigners,” he said.
He said the association made representations with regard to this about two months ago to CB and the regulator is considering it. “We are positive that it will come through and once it does, we will structure a similar fund to NAVF targeting only foreigners,” he added.