Collective Investment Schemes Code

A collective investment scheme (CIS) pools money from many investors and invests it collectively under a manager, with returns and risks shared in proportion to each investor's holding. In Singapore the most familiar retail form is the unit trust, though a scheme may also be structured as a VCC (Variable Capital Company) or a sub-fund of one. The Code on Collective Investment Schemes (the 'Code') is issued by the Monetary Authority of Singapore (MAS / the 'Authority') pursuant to Section 321 of the Securities and Futures Act (SFA). It sets out best practices on the management, operation and marketing of schemes for managers, approved trustees, VCC directors and VCC custodians to observe.

The Code is non-statutory — a failure to comply does not of itself render a person liable to criminal proceedings, but it may be relied on in any civil or criminal proceedings to establish or negate liability, and MAS can take a breach into account when deciding whether to revoke/suspend a scheme's authorisation (s286) or recognition (s287), or to refuse to authorise/recognise new schemes from the same responsible person. The Code was first issued on 23 May 2002; the revised Code took effect on 1 October 2011 (greater flexibility for managers, stronger retail safeguards) and was last revised on 23 May 2023. It runs to ten chapters and seven Appendices, the Appendices covering core requirements plus money-market, hedge, capital-guaranteed, index, property and precious-metals funds.

Retail schemes fall into two categories. An authorised scheme is constituted in Singapore and authorised by MAS under section 286 of the SFA. A recognised scheme is a foreign (overseas-constituted) scheme recognised by MAS under section 287 of the SFA for offer to retail investors here. MAS will only recognise a foreign scheme if it is satisfied the scheme is subject to investment guidelines substantially similar to those in the revised Code. Offering units of either type to retail investors requires a registered prospectus.

Where a recognised scheme (or the underlying scheme an authorised feeder invests into) intends to , or is likely to have , a must appear in its marketing material. On an ongoing basis MAS must be told of any home-regulator condition/restriction change , and revised risk-management documentation must be submitted after it is filed/approved by the home regulator.