Key Points from the Announcement

• SGX Waivers Granted: UOB Asset Management Ltd (the Manager) announced that the Singapore Exchange Securities Trading Limited (SGX-ST) granted several waivers for the UOBAM Ping An FTSE ASEAN Dividend Index ETF (the Sub-Fund) from certain Listing Manual rules.
• Potential Price Sensitivity: These waivers impact how the ETF is managed and reported, and could affect investor confidence, liquidity, and the ETF’s operational flexibility.
• Investor Protections and Transparency: Despite the waivers, the Manager commits to ongoing disclosure requirements and investor protections as set out in the Code on Collective Investment Schemes.

Detailed Waivers and Their Implications

1. Minimum Asset Size Requirement (Rule 404(1)(a))

   Normally, Singapore Dollar-denominated investment funds must have at least S\$20 million in assets at launch. The SGX-ST waived this requirement for the Sub-Fund because the final asset size depends on market conditions at the close of the initial offer period. To maintain liquidity, at least one designated market maker will be appointed to ensure a ready market for trading the ETF units.

   Investor Impact: The ETF could start with less than S\$20 million, potentially affecting initial liquidity and pricing. However, the market maker should help mitigate this risk.

2. Related Party Investment Limits (Rule 404(3)(a))

   The usual rule limits investments in companies related to the fund’s substantial shareholders, managers, or management companies to 10% of gross assets. The Sub-Fund received a waiver, provided it complies with the Code on Collective Investment Schemes.

   Investor Impact: While the ETF can invest more in related parties under certain circumstances, it must still follow regulatory guidelines, which could affect portfolio composition and risk profile.

3. Restrictions on Changing Investment Objectives/Policies (Rules 404(4) & 617)

   Typically, a new fund cannot change its objectives or policies for three years unless shareholders approve by special resolution. The waiver allows changes without such approval if required by regulators, law changes, or if the change is not material. Investors will be notified of significant changes at least a month in advance.

   Investor Impact: The ETF gains flexibility to adapt quickly to regulatory or market changes, but shareholders may have limited say unless the changes are material.

4. Financial Reporting Timelines (Rules 705(1), 705(3)(b), 705(4))

   Instead of SGX’s shorter reporting deadlines (45/60 days), the Sub-Fund will publish annual reports within 3 months of year-end and semi-annual reports within 2 months of the half-year, as required by the Code. Key information, including net asset value (NAV), monthly holdings, and performance, will be available on the Manager’s website.

   Investor Impact: Reporting will be less frequent than standard SGX-listed companies, but investors have access to detailed fund information online. Timeliness of financial updates is slightly reduced, which could affect price discovery and investor sentiment.

5. Weekly Net Tangible Asset Announcements (Rule 748(1))

   The Manager will announce NAV per unit for each dealing day on its website by the next business day and will publish a weekly NAV announcement via SGXNET. The waiver is granted because the ETF does not hold tangible assets.

   Investor Impact: NAV transparency is maintained, but updates may not be as granular as for other SGX-listed funds.

6. Shareholder Approval for Change of Manager (Rule 748(4))

   The Trust Deed allows unitholders to remove the Manager or for the Trustee to remove the Manager under specific circumstances (e.g., insolvency, regulatory issues, or failure to perform duties). Unitholders’ approval for appointing a new manager is required except in certain cases. Prior notifications will be made to investors and regulators if a manager change occurs without a vote.

   Investor Impact: Investors are protected by the ability to remove the manager in adverse circumstances, and will be notified promptly of any changes, helping to safeguard their interests.

Other Investor-Relevant Details

• The Sub-Fund is authorised under section 286 of the Securities and Futures Act 2001 and must comply with the Monetary Authority of Singapore’s requirements.
• Monthly holdings, NAV, performance data, and public announcements (including changes in fees, trading suspension/resumption, and changes in Participating Dealers) will be available on the Manager’s website.
• Any change to the FTSE ASEAN ex REITs Target Dividend Index used by the ETF could lead to changes in investment policy, subject to regulatory notification and investor protection mechanisms.

Potentially Price-Sensitive Information

• Operational Flexibility: The ability to launch with less than S\$20 million, invest more in related parties, and change policies without shareholder approval under certain circumstances could impact investor sentiment and valuation.
• Disclosure Timelines: Extended reporting periods and reliance on web-based disclosures may affect information flow and pricing efficiency.
• Manager Changes: The process for removing or replacing the Manager is streamlined, which could lead to swift management changes in crisis scenarios and impact ETF stability and market confidence.

Conclusion

These waivers collectively provide the UOBAM Ping An FTSE ASEAN Dividend Index ETF with increased operational flexibility and adaptability to changing regulatory and market environments. While investor protections remain in place, the changes to reporting timelines, investment limits, and management replacement procedures could influence investor sentiment and share price volatility. Investors should monitor the Manager’s website and SGXNET for timely updates and disclosures.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors are urged to consult their financial advisers before making investment decisions related to the UOBAM Ping An FTSE ASEAN Dividend Index ETF. The SGX-ST does not endorse the accuracy of statements or opinions contained herein.

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