What actions should Fund Management Companies/insurers take if their existing CPF Investment Scheme List A funds are unable to comply with the Total Expense Ratio (TER) caps?

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Fund Management Companies (FMCs)/insurers have undertaken to comply with the Total Expense Ratio (TER) caps for funds included under CPF Investment Scheme. If their List A funds are not able to comply with the new TER caps from 2016, FMCs/insurers will be required to compensate the funds for the difference between the actual expense ratios and the new TER caps. The funds would then be downgraded to List B with effect from the implementation date (see relevant reporting period, (PDF, 0.1MB)). Under List B, funds are not allowed to take in new CPF monies.

What actions should Fund Management Companies/insurers take if their existing CPF Investment Scheme List A funds are unable to comply with the Total Expense Ratio (TER) caps?

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