​Management of Mutual Fund

14. Amalgamation and merger of mutual fund

An amalgamation of mutual fund 

A + B = C

A merger of mutual fund

A + B = A or B

Conditions

​(1) Only mutual fund under the same mutual fund management company are allowed for an amalgamation/merger.

​(2) The mutual fund management company must consider possible impacts on the unitholders.

​(3) A resolution of the unitholders, pursuant to rules specified in the scheme and the commitment, is obtained.

​(4) In requesting a resolution of the unitholders, the mutual fund management company shall disclose to the unitholders the following information on the amalgamation/merger of the mutual fund to ensure that the unitholders are aware of and understand the status of the mutual fund after the amalgamation/merger:

​​​4.1 Up-to-date investment portfolio;

​​4.2 A comparative summary of key information and differences of the mutual fund to be amalgamated/merged;

​​4.3 Changes resulting from the amalgamation/merger;

​4.4 Procedures, detailed steps, and duration of the process;

​4.5 Rights of the unitholders;

​4.6 Report on projected financial position of the mutual fund to be amalgamated/merged or the new mutual fund;

​4.7 Dividend payment policy before and after the amalgamation/merger;

​4.8 Amalgamation/merger expenses chargeable to the unitholders and the mutual fund;

​​4.9 Advantages and disadvantages in terms of expenses, risks, benefits of unitholders;

(5) For the unitholders who vote against the resolution/do not express their intentions, the mutual fund management company shall provide them with an option to exit from the mutual fund before the completion of the amalgamation/merger with a sufficient period and with fair treatment.

Requirements for a resolution to be passed by the unitholders

​(1) In case of amalgamation/merger of the mutual fund with the same investment policy and level of risk spectrum, must obtain majority resolution by unitholders of each fund.​

​(2) In case of amalgamation/merger of the mutual fund with different investment policy and level of risk spectrum, must obtain special resolution by unitholders of each fund.

​​(3) In requesting for resolution, the asset management company is required to :

​3.1) Specify details of the new scheme and commitment;

​3.2) Request a resolution of the unitholders to dissolve the former funds;

​​3.3) Request the unitholders to pass a resolution to convert from a closed-end mutual fund(CEF) to an open-end mutual fund (OEF), (in the case of a conversion of  a mutual fund scheme)​