TheEdge
KUALA LUMPUR: No frills financial services provider Tune Money Sdn Bhd has received a conditional approval for a fund management licence, paving the way for the company to venture into the unit trust business, sources said.
The sources said the company, which received the conditional approval from the Securities Commission (SC) last week, would have to set up a subsidiary to take on the unit trust management business.
SC rules dictate that for a company to venture into the business, it must have unit trust management company status.
“Tune Money either has to have such status or at least create a new subsidiary to take on the unit trust management business,” a source told The Edge Financial Daily.
The source said Tune Money would likely market the unit trust products through foreign fund managers, which could be based in Hong Kong.
“With investment rules in China to be liberalised next year, retail investors from mainland China will be able to buy such products from Hong Kong-based fund managers.
“The China market will present a huge potential for Tune Money if indeed it appoints fund managers in Hong Kong,” said the source.
Tune Money’s chief executive officer Tengku Zafrul Aziz is believed to have visited Hong Kong recently to scout for possible partners for its unit trust fund management business.
With the licence from the SC, Tune Money would be able to manage its own unit trust funds on top of acting as agent for other unit trusts.
Tune Money’s business model would allow it to sell the unit trust products cheaper than most others in the market as online sales would mean no middleman and savings on management fee.
It is believed that Tune Money could sell its unit trust products from as low as RM100 without upfront fees. Fund management fees in the local market currently range between 1% and 3% of the total net asset value of a fund.
Tengku Zafrul has said the company’s focus for next year would be on fund management, and expanding into neighbouring countries like Indonesia, Thailand and Vietnam, and launching a hospitalisation insurance scheme.
Modelled after other no-frills online financial services such as Egg Prudential Bank in the US and Virgin Money in Europe, Tune Money currently offers online policies for personal accident, motorcycle personal accident and home insurance, which are all underwritten by CIMB Aviva.
Tune Money has also teamed up with Visa International to come up with Tune Card, which is available to anyone who applied for it, as there are no minimum salary requirement or employment checks.
Tune Money is 44.88% owned by Tune Ventures Sdn Bhd. The balance of the equity is held by CIMB (25%), Tengku Zafrul (10%), Datuk Kalimullah Hassan (8.21%), Lim Kian Onn (8.21%), Kaneswaran Avili (1.5%) and Tune Money Employees Sdn Bhd (2.25%).
Tune Ventures is in turn 40% owned by AirAsia Bhd chief executive officer Datuk Tony Fernandes, AirAsia deputy group CEO Datuk Kamarudin Meranun (30%), Dennis Melka (25%) and Tune Strategic Investments Ltd (5%).
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