Collective Investment Scheme: How it works
The Collective Investment Scheme or CIS – an important source of financing for large development projects – is relatively new in Cambodia.
CIS is an investment structure that allows fund management companies to establish investment projects to raise money from investors to invest in specific projects, with the profits or benefits distributed back to the investors.
A fund management company, a trustee, a distribution company and a fund administrator are all needed to run a CIS.
All the aforementioned key players must be companies licensed by the Securities and Exchange Regulator of Cambodia (SERC) – the Kingdom’s securities sector regulator.
Fund management companies establish and manage the funds to invest with clear and professional analysis to maximise profits for the fund at an acceptable level of risk.
Fund management companies can raise capital through the issuing of fund units to investors.
The sale of fund units to investors must be done by the distribution company.
The distribution company also has the role of opening accounts for investors and is responsible for repurchasing the fund units investors wish to redeem.
The value of a fund unit may change daily due to the fluctuation of the value of the fund’s assets.
The fund administrator is responsible for evaluating the fund’s assets, and determining the value of fund units and transferring their ownership.
All proceeds collected from the investors will not be kept by the fund management company.
The funds shall be kept by the trustee, which is the legal representative of all assets of the investment trust in accordance with the laws and regulations in force.
The trustee, an independent company that has no interest or relation with the fund management company, is responsible for monitoring the fund management company to ensure their operations are in accordance with the laws and regulations in force.
The box below right shows the type and number of companies the SERC has granted licences to as of the first quarter of this year.
Prepared by: the Securities and Exchange Regulator of Cambodia, Securities Intermediaries Supervision Department.
E-mail: [email protected].
Phone: 023 885611.