A Collective Investment Scheme (CIS) is the pooling of money or any cash equivalent via an issue of fund units or via an electronic system, including crowd funding, as approved by the Securities and Exchange Regulator of Cambodia (SERC) for establishing public funds, private funds or a real estate investment trust.
Once the fund is established, the fund management company will manage the fund and invest in any CIS projects approved by SERC to generate financial benefits or other benefits including rights or interest on the property for the investors.
Therefore, the investors invest in the fund and the fund manager manage the fund for the investors.
Thus, the investors are the cash contributors to the scheme with the fund management company investing on behalf of the investors.
A CIS can benefit investors and related companies, as well as the nation as a whole, in a number of ways.
First, investors are not required to have in-depth knowledge of investments as the fund management company will prepare a report and analyse it for them so that they can then decide whether or not to participate in the scheme.
Second, even investors with limited income can invest in large projects, such as the construction of commercial and residential buildings, and farms.
Last but not least, the risk of loss is low because the fund management company will use the money collected from the investors to invest across various sectors.
The benefits for the relevant companies and wider society include the creation of jobs and the raising of capital, while related sectors can benefit from increased trading in the securities sector, the buying or constructing of hotels, resorts, and tourist sites, the building of shopping malls, commercial and residential buildings, as well as the investing in farms or animal husbandry for supply to the local market and export.
To ensure the transparency, accountability and accuracy of CIS operations, regulations have defined some key players in the CIS business process, such as the fund management company, the trustees, the distribution company and the fund administrator.
All key players must get a licence from SERC.
Reference: Prakas No.003/18 SECC/PR.K. issued on May 29, 2018 on Licensing and Management of Collectives Investment Scheme Business.
Prepared by: Securities Intermediaries Supervision Department, Securities and Exchange Regulator of Cambodia
E-mail: [email protected]
Phone: 023 885611