The Securities and Exchange Commission of Cambodia (SECC) has issued licences to manage cooperative investment schemes (CIS), a new tool in the local stock market, to three companies.
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One more company has applied for the licence and is waiting for approval, said Sou Socheat, SECC director-general.
Mr Socheat declined to reveal the name of any of the firms, but said that two of the four companies that have applied for licences related to CIS are foreign-owned.
Speaking at an event yesterday, Sou Socheat, SECC director-general, explained collective investment schemes. He said they are pooled investment funds, generally collected from individuals. They are managed by a professional investment team and put into different businesses.
The investment team acts on behalf of the individual investors, who may have no investment skills or lack the time to manage their own investments.
Mr Socheat said CIS is the third instrument available to investors in the local capital market, following shares and bonds. People that invest in CIS are called ‘fund unit holder’.
Investments can be made in any sector as well as in the capital market.
Mr Socheat said CIS allows those with little or no investment skills to participate in the market.
“The establishment of these funds benefit the capital market. More people can now take part in the capital market which increases liquidity,” Mr Socheat said at the ‘Establish a Fund in Cambodia: Regulatory, Governance, and Opportunities’ event, held yesterday at the headquarters of the Cambodia Securities Exchange (CSX).
“There are two reasons CIS was launched. First, it will help promote the market. Second, it makes it easier for the public to participate in the capital market,” he said.
According to Mr Socheat, funds may vary in size but may not exceed $1 million.
Khem Vansok, partner at legal firm DFDL, said, “With CIS, investors have confidence they can invest in another asset portfolio. If they want to invest in real estate, they can. If they want to invest in commodities, they can use a private or public fund.”
Ms Vansok was speaking during a panel discussion at the event.
“This tools supports investors with limited knowledge and experience in investment. All of us here know about the financial market, including stocks and bonds. But we may not have much experiencing doing actual investments. With this fund management tool, we can now invest our money,” Ms Vansok said.
CSX has five listed companies – Phnom Penh Water Supply Authority, Grand Twins International (Cambodia) Plc, Sihanoukville Autonomous Port, Phnom Penh SEZ Plc, and Phnom Penh Autonomous Port. Two companies – Hattha Kaksekar Limited and LOLC – have issued bonds.