FIMM FCE cheat sheet

Unit trust structure: unitholders pool money; the management company (UTMC) manages the fund; the trustee holds assets and safeguards unitholders' interests; the fund is a separate legal estate from the UTMC.

Net Asset Value per unit = (Total assets − Total liabilities) ÷ Number of units in circulation; NAV is normally struck at least once each business day for funds with daily pricing.

Forward pricing: subscriptions and redemptions are transacted at the next NAV computed after a valid request is received, not at the last published price.

Sales charge is levied on subscription (typically a percentage of NAV per unit); redemption charge is levied on exit; both are disclosed in the prospectus and may differ by class.

Management fee is accrued daily into the NAV and paid to the UTMC; trustee fee is paid to the trustee; both are ongoing charges reflected in the fund's expenses, not charged separately to the investor.

Unit split and unit consolidation change the number of units and NAV per unit proportionally but do not change a unitholder's total value; a distribution reduces NAV per unit by the amount distributed.

A prospectus must be registered with the Securities Commission Malaysia and a product highlights sheet accompanies it; the deed, prospectus and supplemental/variation documents govern the scheme.

Cooling-off right: an investor may exit within the statutory cooling-off period (commonly six business days from receipt of the prospectus and application) and receive the refund of investment less allowable charges.

Eligibility and distribution rules: funds are classified by investment objective and asset class; a fund's stated investment policy, benchmark and risk profile must be consistent with what is disclosed to investors.

PRS are voluntary, long-term savings vehicles regulated under the Capital Markets and Services Act and the SC's PRS guidelines; providers must be approved by the Securities Commission Malaysia.

PRS structure: a PRS provider (scheme/fund management) appoints a trustee to hold scheme assets, and a Scheme Governing Committee or equivalent oversees the scheme; sub-schemes may be offered as default (core) and non-default (non-core) options.

Two account tiers: Account A holds 70% of contributions and is locked until retirement age; Account B holds 30% and may be withdrawn subject to conditions, penalties and tax treatment.

Contribution limits: members may contribute voluntarily up to RM3,000 per year and claim tax relief (the relief is capped at RM3,000 per year, separate from life insurance relief); employers may contribute on behalf of employees.

Withdrawal before retirement age is generally restricted to permitted grounds (e.g. death, permanent total disability, emigration, or specified pre-retirement withdrawal rules); premature withdrawal from Account A attracts a penalty (commonly 8%) on the withdrawn amount.

At retirement age, members may withdraw savings in stages or as a lump sum, or purchase an annuity; PRS savings are not a substitute for EPF and are separate from EPF accounts.

Fees in PRS are capped by regulation: a maximum sales charge (commonly 3% of NAV per unit) and a maximum annual management fee (commonly 1.5% of NAV), plus a trustee fee; the caps apply per sub-scheme.

Switching between sub-schemes within the same provider and between providers is permitted, subject to the provider's switching terms, minimum amounts and any switching fees.

PRS providers must disclose fund objectives, asset allocation, risk profile and performance; a PRS is not a guaranteed product and returns depend on the underlying investments.