3.4 The Deed, the Prospectus or Disclosure Document, and the Product Highlights Sheet

The Deed

The CMSA and PRS Regulations require the UTS or PRS deed to be registered with the SC, and its contents must meet the SC's requirements. Changes require a supplementary deed, accompanied by the appropriate investors' resolution or a statement from the Trustee and Scheme Provider, so that the changes protect investors.

Minimum contents (UTF and PRS Guidelines, Schedule D)

The deed must uphold investors' interests and be consistent with securities laws and SC guidelines.

The Prospectus (UTS) and Disclosure Document (PRS)

A prospectus is issued by a UTMC and a disclosure document by a PRS Provider. Both let investors make an informed decision.

• No securities may be issued and no invitation to invest made unless a prospectus or disclosure document has been registered by the SC.
• Potential investors must receive a copy (hard or soft) when they ask to subscribe and must be advised to read and understand it first.
• The CMSA sets the core rules; the Prospectus Guidelines for CIS add prospectus requirements, and the PRS Guidelines and PRS Regulations add disclosure-document requirements.
• The SC will refuse to register a document that does not comply, or that contains false or misleading statements or material omissions.
• Registration is not a recommendation – the SC does not recommend the scheme or take responsibility for the statements, and a disclaimer says so.
• The directors of the Scheme Provider remain responsible for the document. Issuing a non-compliant document can lead to a fine of up to RM3 million, up to ten years' imprisonment, or both.

When deciding what to include, preparers consider the nature of the scheme, the likely investors (their knowledge and experience) and what professional advisers, including Consultants, can be expected to know.

Electronic prospectus and communications

The UTF Guidelines allow electronic prospectuses and application forms. A Management Company may send reports, statements and notices electronically if either investors are told of the method when they open their account, or, before making electronic delivery the default, it mails all investors a notice that they will receive documents electronically unless they opt out.

Supplementary and replacement documents

If information becomes false or misleading (for example after a tax-law change), the document must be withdrawn, or the Scheme Provider may issue:

• a supplementary prospectus/disclosure document correcting the original or describing the change; or
• a replacement prospectus/disclosure document carrying a clear, bold statement that it is a replacement.

A supplementary document forms part of the original, and Consultants must make sure every copy given to investors includes all supplementary documents (there may be several).

The Product Highlights Sheet (PHS)

A PHS sets out a fund's salient features so investors can understand it and compare products. The Guidelines on Product Highlights Sheet set the main rules; the PRS Guidelines add PRS-specific items. A PHS is required in addition to the prospectus or disclosure document, and must be clear, concise, not false or misleading and free of material omissions.

A PRS PHS must also explain the fund's taxation, the member's tax deduction and tax liabilities (including the tax penalty on pre-retirement withdrawals), and the maximum tax deduction for employers contributing for employees.

Investors must be told of their right to receive a PHS and given reasonable time to read it. A hard or electronic copy must be provided before the investment decision, and a hard copy on request.

Complaints route stated in the PHS

1. Internal dispute resolution with the Scheme Provider.
2. If dissatisfied, refer the dispute to FMOS.
3. The investor may also complain to the SC and FIMM, even while an FMOS case is running.

Plain Language and Advertising

Under the Prospectus Guidelines and PRS Guidelines, information must be clear, concise and in plain language. FIMM's Guidance on Simple Language and Effective Drafting Practices for Prospectus helps members comply.

The SC's Guidelines on Advertising for Capital Market Products and Related Services apply to issuers, licensed persons, capital market service providers and recognised market operators, and therefore to UTS and PRS Consultants. Advertisements must give clear, fair and balanced information and avoid exaggerated, flamboyant, overstated or over-zealous messages (details in section 4.2).