On February 17, 2023, the Securities Commission (SC) made revisions to its Guidelines concerning Sustainable and Responsible Investment Funds (referred to as “the Guidelines”), aligning them with the newly introduced ASEAN Sustainable and Responsible Fund Standards.
The guidelines cover various aspects, such as the scope of an SRI fund, policies and strategies, disclosure and reporting requirements, and third-party verification.
The revised Guidelines consist of three parts. Part A: Sustainable and Responsible Investment (SRI) Fund;
Part B: ASEAN Sustainable and Responsible Fund and
Part C: Certification in Respect of Tax Exemption for Managing an SRI Fund.
Part A: Sustainable and Responsible Investment (SRI) Fund
This part of the guidelines focuses on the requirements and guidelines for funds that aim to qualify as sustainable and responsible investment (SRI) funds.
It covers aspects such as the scope of an SRI fund, its name, policies and strategies, disclosure and reporting requirements, and the use of third-party verification. It also outlines the obligations of the issuer and guides compliance.
Part B: ASEAN Sustainable and Responsible Fund
Part B sets out the requirements for new or existing SRI funds seeking to qualify as an ASEAN Sustainable and Responsible Fund.
It states that the issuer must ensure that the SRI fund complies with the ASEAN Sustainable and Responsible Fund Standards issued by the ASEAN Capital Markets Forum (ACMF).
The guidelines also guide what can be considered a sustainable investment objective for an ASEAN Sustainable and Responsible Fund.
Part C: Certification in Respect of Tax Exemption for Managing an SRI Fund
Part C focuses on the certification process for tax exemption for managing an SRI fund.
It provides an application form and declaration that needs to be submitted for certification.
The guidelines also mention that tax exemption on the management fee for SRI funds and other tax incentives are mutually exclusive, meaning only one incentive can be applied for in a given financial year for the same SRI fund.
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