I guess you better write to the Securities Commissions, BNM, and SSM at the same time, since it's not even clear who is regulating these schemes properly.

That is a "UBB's client" response, not an official company response. Using your client (or client's identity) to stand in front of you is not really a professional response.

You would not expect (for example) Maybank or Affin Hwang (or any other financial institutions) to respond to a "crisis" in this manner.

This post has been edited by TOS: May 25 2022, 11:45 AM

Even in this case, UBB should not drag its clients down to defend itself. They should issue their own statement.

A professional statement would have mentioned they are "cooperating with the relevant authorities", "safeguard client's interests" etc. None of these appear.

Funny still, the letter appears under "Our Insights" section in the UBB Amanah official page: https://www.ubbamanah.com/

The company can quote the client's open letter in its own response, but should not just put it bluntly there as if the client is answering on behalf of UBB.

Better still, answer the doubts raised in TheEdge, point by point, clearing the air. I guess mentioning the regulator would not be an issue, if accounts are to be kept secret.

The only part I agree with the open letter is to bring the issue to the relevant authorities rather than political parties.

This post has been edited by TOS: May 25 2022, 08:16 AM

Better hope this is the case. Their method of responding is already raising eyebrows.

This post has been edited by TOS: May 25 2022, 08:20 AM

Did the company let you know what your money is invested in while it is held in trust? In other words, do you know what is the underlying securities/properties that are paying you your 6% or 7% p.a. returns?

And is your 6 and 7% p.a. figures after fees or ex-fees?

This post has been edited by TOS: May 26 2022, 12:39 PM

Ok, in the mean time you better diversify your assets in multiple vehicles. I think settting up trusts for estate planning purposes are mostly done via lawyers and the underlying assets should be fixed deposits/gov. bonds etc. which means it is not possible to earn anywhere near the projected figures of 6-7% p.a. in the current environment.

So either the company must have taken risks somewhere or the whole thing is a scam/misleading projections. Try to ask the company if they can clarify further on the whereabouts of the money, i.e., the underlying assets. This is a crucial information to protect yourself.

This post has been edited by TOS: May 26 2022, 07:25 PM

This looks a lot better than the one yesterday. It does not sound like it's written by a lawyer however, consider the formality in some paragraphs (or maybe an angry lawyer, if you note the double exclamatory marks. ).

They clarified a lot of things, which helps a lot in clearing the confusions. Since this case has been brough to the attention of the authorities, and given this response, I will rest my case here.

Before I leave, just some things to note from my side.

1. Having reputable individuals like a former deputy minister, judge, and chairman of bar council on the board of directors does not guarantee anything (especially in corrupted Malaysia). One should always bear in mind of principal-agent problem. These directors' interests may not necessarily aligned with yours. (You don't pay them directly.)

2. There is still no mention of the underlying source of returns or "profits". But looking at AmanahRaya side, it seems like this is the case too. http://www.amanahraya.my/trust-administration/ So, seems like standard practice. The lack of details on the underlying assets still bothers me nevertheless, at least some clarifications would be nice e.g. (investment-grade bonds + blue chip equities etc.)

3. Consider the reputable board members, prudent practices, why is it that the PR response, timing, quality don't live up to those standards? 30 years in the trust industry should have delivered more than enough experience of corporate communications to the firm, don't you think so?

It's hard to convince someone that their responses are prepared from someone/some firm who/which is in the industry for 30 years. Getting involved in the trust industry should have meant clear and strict separation of client-employee relationship as one of their fiduciary duties. But yesterday their first response was to let the client speak as if he/she is the employee/on behalf of the company.

4. Amanah Raya claims to have "90 years" of experience and also offer similar trust services (it claims to be the nation's largest estate planning service provider). Some members mentioned about DCS earlier. One advice is to shop around and check out with multiple service providers on their expertise and the relevant regulations. Speak to your lawyer if in doubt.

5. The regulator for all trusts is the SSM, as clarified in the document. As long as one's purpose is (to treat the trust as) estate planning and not investment vehicles that is fine, what concerns me is when people start treating the products as investment vehicles. SSM may not have the same regulatory powers and experience as Bank Negara or SC. So you are essentially on your own. It also starts to look like a grey area for any businesses to escape the preying eyes of SC and BNM to start offerring investment products.

6. The short tenure of 36 months for the cash trust offered by this company also differs from Amanah Raya's product which does not impose any tenure limit. If one uses the trust service to children's education and your child is still young, the short tenure may mean you need to repeatedly sign new trust deeds.

This post has been edited by TOS: May 27 2022, 12:51 AM

To put things into perspective:

I noticed one big difference between trust companies regulation in MY and SG.

Both SG and MY has Trust Companies Act. But in SG the regulator is MAS under Capital Markets. But in MY it's funny that SSM is the regulator instead.

MAS trust company licensing info: https://www.mas.gov.sg/regulation/capital-m...usiness-Licence

SG Trust Companies Act (Attorney-General's Chambers official website): https://sso.agc.gov.sg/Act/TCA2005

The SSM equivalent in Singapore is called ACRA: Accounting and Corporate Regulatory Authority

https://www.acra.gov.sg/legislation

Trust is not regulated by ACRA in SG.

Malaysia law kind of outdated.

Good to see the right regulator is referred this time lol

Always suspected SSM isn't supposed to be the right regulator for such "schemes".

But with the report it seems that Amanah Raya is also doing something illegal then since their "cash trust" started much earlier than the heavy promotion from UBB and others.

How can Amanah Raya's "illegal" cash/property etc. trust stays around for so long and under the radar...

This post has been edited by TOS: Jul 31 2022, 11:10 AM

Uhmm cash trust is a different product though. Their UT business is definitely legit with proper licensing from SC. But I don't think that automatically makes it "legit" to offer cash trust.

But I could be wrong, just saying.

Looking at the brochure, they just hold cash and that's it.

https://www.amanahraya.my/wp-content/upload...ust_ENG_CS6.pdf (page 5)



I think UBB's case is closer to p-Trust since they get a portion of their income from properties. But well, I never read the trust deed, so can't comment anything anyway.

The line between wealth management and estate management is ever so thin...

I think it depends on how you structure the product and market it. Cash management fund is UT, cash trust is a trust. Underlying asset is cash but governed via different legal entities.

Cash entrusted usually is invested in government bonds/bill/notes (if amount is large) or fixed deposit (less amount), so still some $$ there.

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