The Securities and Exchange Commission (SEC) this week directed all unit trusts to maintain a minimum of 50 unit holders for each fund at all times and initiated that it’ll get tough with non compliance.
“If this is not met due to redemption by a unit holder or any other supervening circumstances, the managing company of unit trust funds will be required to make best efforts to comply within three months from the date of the first short fall and consult he Commission forthwith,” SEC said, adding that this directive will be with immediate effect.
Unit trusts are also required to obtain a minimum of 50 unit holders during An Initial Public Offering (IPO) period and if that is not met unit trusts will have to refund the monies collected at the close of the IPO period.
Unit trust funds existing prior to this date will be granted six months ending 31 March 2015 to comply with the continuous maintenance requirement.
There are nearly 50unit trusts funds operating in the country and in the last four years, and the SEC has been very keen for this industry to grow and broad-base across the country, analysts said.
“Roadshows across the country were organised and awareness programmes were telecast on TV as well as various benefits being offered like full tax relief from all income earned from Units and lifting of exchange controls to permit foreigners to invest,” an analyst said, but pointed out that the number of funds grew but they were not broad-based. Some were using it as a method of reducing their income taxes. “It is probably because of this that the SEC has put in these fresh qualifications,” the analyst added. www.sundaytimes.lk
“If this is not met due to redemption by a unit holder or any other supervening circumstances, the managing company of unit trust funds will be required to make best efforts to comply within three months from the date of the first short fall and consult he Commission forthwith,” SEC said, adding that this directive will be with immediate effect.
Unit trusts are also required to obtain a minimum of 50 unit holders during An Initial Public Offering (IPO) period and if that is not met unit trusts will have to refund the monies collected at the close of the IPO period.
Unit trust funds existing prior to this date will be granted six months ending 31 March 2015 to comply with the continuous maintenance requirement.
There are nearly 50unit trusts funds operating in the country and in the last four years, and the SEC has been very keen for this industry to grow and broad-base across the country, analysts said.
“Roadshows across the country were organised and awareness programmes were telecast on TV as well as various benefits being offered like full tax relief from all income earned from Units and lifting of exchange controls to permit foreigners to invest,” an analyst said, but pointed out that the number of funds grew but they were not broad-based. Some were using it as a method of reducing their income taxes. “It is probably because of this that the SEC has put in these fresh qualifications,” the analyst added. www.sundaytimes.lk
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