KUALA LUMPUR: The number of private retirement schemes (PRS) remained unchanged in 2020, with 12 schemes comprising 57 funds offered by eight PRS providers, according to the Securities Commission Malaysia (SC) Annual Report 2020.
The SC said total NAV of RM4.75 billion as at Dec 31, 2020 represented an increase of 35.71 per cent compared to a total net asset value (NAV) of RM3.50 billion in the same period in 2019.
“Overall, there was a significant increase in withdrawals from PRS with pre-retirement withdrawals in 2020 increasing to 52 per cent of total withdrawals compared with only 18 per cent of total withdrawals in 2019.
“This increase is due to new categories of permitted pre-retirement withdrawals for housing and healthcare, as well as for temporary exemption accorded to PRS members from payment of 8.0 per cent tax penalty for withdrawals from sub-account B of up to RM1,500 per PRS provider,” it said.
In 2020, the SC considered 370 applications relating to the Malaysian Collective Investment Scheme (CIS) and PRS, comprising applications to establish new funds, register prospectuses/disclosure documents, register deeds, and other ancillary matters.
There were six eligible issuers of structured warrants in 2020.
The SC received and registered six base prospectuses and 11 supplementary prospectuses from these issuers in 2020.
A total of 1,235 term sheets for the offering of structured warrants were registered in 2020, representing an increase of 11.7 per cent compared with the 1,106 term sheets registered in 2019.
The increase was attributable to the active issuance by issuers in meeting investor interest in 2020.
The year 2020 also saw an increase in issuances of structured warrants based on shares from 916 in 2019 to 1,032 in 2020 and the return of the put warrants based on shares after a three-year absence.
The last issuance of put warrants based on shares was in 2017 with the registration of one term sheet relating to the offering of put warrants over shares.
In 2020, a total of 19 term sheets relating to the offering of put warrants over shares were registered.
In addition, issuances of structured warrants based on indices increased to 187 in 2020 compared to 181 in the previous year.
The term sheets registered in 2020 enabled the structured warrants issuers to offer up to a total of 58.52 billion units of structured warrants.
In 2020, nine issuers lodged 18 new structured product programmes with the SC under the LOLA Framework for unlisted capital market products.
These programmes comprised a variety of underlying references and had an aggregate size of RM90 billion with each programme having a size limit of up to RM5 billion.
In line with the SC’s Capital Market Masterplan 2 to promote and develop the derivatives market, the SC introduced the Guidelines on Contracts for Difference (CFD) on April 6, 2018.
A CFD is a leveraged derivatives product that allows investors to participate in the price movement of an underlying instrument.
Given the complexity of CFDs, the framework is implemented on a phased approach starting with sophisticated investors.
In 2020, there were two CFD providers offering CFD in Malaysia based on shares and indices compared to one CFD provider offering CFD based on shares in 2019. — Bernama
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