CMFAS RES5 MAS Guidelines question: relying on the Fund Management Exemption to periodically rebalance

CMFAS RES5MAS Guidelines

Under CMG-G02, a digital adviser relying on the Fund Management Exemption to periodically rebalance a client's portfolio of collective investment schemes must:

A Rebalance to whatever allocation its algorithm currently favours, without notifying the client
B Obtain fresh written authorisation from the client before each rebalancing
C Hold and control the client's assets to execute the rebalancing efficiently
D Rebalance back to the last agreed allocation, giving the client notice before each rebalancing

Show the answer and explanation

Answer: D. Rebalance back to the last agreed allocation, giving the client notice before each rebalancing

The Fund Management Exemption in CMG-G02 covers rebalancing portfolios of solely listed and unlisted CIS back to the last agreed allocation. It requires a one-time prior written authorisation (not fresh consent each time) and pre-transaction notice, and the adviser may not hold or control client assets.

Common mistake

Rebalancing is to the last agreed allocation with pre-transaction notice — authorisation is one-time, and the adviser never holds client assets.

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CMFAS RES5 MAS Guidelines question: relying on the Fund Management Exemption to periodically rebalance

Answer: D. Rebalance back to the last agreed allocation, giving the client notice before each rebalancing

Common mistake

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CMFAS RES5 MAS Guidelines question: relying on the Fund Management Exemption to periodically rebalance

Answer: D. Rebalance back to the last agreed allocation, giving the client notice before each rebalancing

Common mistake

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