With reference to the Securities and Exchange Commission’s (SEC) issuance of product governance guidelines for mutual fund products, Talis Asset Management (hereinafter referred to as the “Company”) is therefore establishing a product governance policy to cover the launch and sales of our mutual fund products that emphasize the clients’ needs and benefits.
The product governance policy aims to help the Company achieve six key objectives:
- The mutual fund is designed with the clients’ objectives in mind and upholds the best interest of its target investors.
- To ensure the Company genuinely understands the mutual funds’ features and risks.
- The mutual fund units are offered for sale to the targeted investors through appropriate distribution channels.
- Distributors and sales staff understand the mutual funds’ key features and risks, as well as the target investors.
- Investors genuinely understand the mutual funds’ key features and risks before making their investment decisions.
- The Company shall continuously monitor the mutual funds’ operations and ensure the distributor fulfills its responsibilities when offering mutual fund units to investors. Problems will be dealt with appropriately.
The Company prescribes four major pillars for its business operations to achieve good product governance.
- Organizational Structure, Role of the Board of Directors, Responsibilities of Senior Management
The Company’s management structure, workflows, and procedures related to the launch and distribution of mutual fund products will be clearly defined. Supporting evidence and documents will be well preserved for audit purposes.
- Product Development
The Company will set proper product development processes. This involves properly identifying the target investor group for the mutual fund product being launched, establishing proper procedures covering product inception that prioritizes the needs and benefits of the target investor group, and conducting product tests before launch and distribution. This will ensure we are thoroughly aware of the product’s features and risks, while strengthening confidence that the fund is suitable for the target investor group.
- Distributor Selection and Communication
The Company will reinforce the distributors’ understanding of the characteristics and risks of the mutual fund being offered. This ensures that the distributor will properly market the fund to respective investors. Proper communication methods must be established with investors to ensure they have sufficient information to understand the product before making an investment decision.
- Product and Distributor Monitoring
The Company will monitor fund performance and operations to assess whether the fund remains suitable for the intended target investor group and determine whether the product is being offered to the right target market.