Registered and Authorised Scheme

Majority of memorial park businesses in Malaysia fall within the definition of “investment scheme” under the Interest Schemes Act 2016 (“the Act”) which took effect from 31 January 2017. For detailed information of how memorial park business has been classified under “interest scheme”, please refer to earlier article entitled “Private Memorial Park: A Scheme of Interest?”.

Suruhanjaya Syarikat Malaysia (“SSM”) has the jurisdiction to register and authorise memorial park interest scheme under Section 9 of the Act. Section 3 of the Act prohibits any person except a management company from issuing or offering to the public for subscription or purchase of any interest (namely the right of use / licences of burial plots or urn compartments) in the memorial park interest scheme unless the scheme is registered and authorised under the Act.

Right to Approved Trust Deed

Any person intending to purchase a right to use a burial plot or urn compartment shall be entitled to inspect, and, with payment of a fee, to obtain a copy of the trust deed for the scheme approved by the SSM Registrar under Section 19 of the Act. The trust deed will provide information regarding (among others):

• any trust account set up for the scheme particularly the maintenance fee contributed by purchasers
• the appointment of trustee for the scheme and its duties
• covenants binding on the memorial park management company and the trustee as required under the First Schedule of the Act
• the prices at which the rights to use are to be sold
• the winding up or de-registration of the scheme

Section 27 of the Act prohibits a memorial park management company from offering to public for subscription or purchase of any interest unless there is in force an approved trust deed.

Right to Registered Prospectus

Purchasers shall also be provided with a copy of the prospectus duly registered with the SSM Registrar pursuant to Section 29 of the Act. Section 32 of the Act requires that before a prospectus is issued, it must contain minimum contents as specified in the Second Schedule of the Act, including:

• information regarding the management company, its management expertise and track records
• information regarding the land on which the memorial park is located, and the facilities and amenities and status of planning and development approvals
• information regarding the scheme such as duration, purchase procedure, minimum subscription required and maximum number of interest to be issued
• summary of important provisions of the trust deed
• Auditor’s Report on the financials of the scheme
• Independent Consultant’s report on viability of the scheme and risks associated (where applicable)

Section 28 of the Act prohibits a management company of a private memorial park from issuing, circulating or distributing any form of application for subscription of interest (usually in the form of purchase order or agreement to purchase) unless the form is accompanied with a copy of registered prospectus.

Caring tip: Before signing any document to purchase a burial plot or urn compartment, ask for (1) the interest scheme approval for the memorial park, (2) a copy of the approved trust deed, and (3) a copy of the registered and valid prospectus. Consult a lawyer, if necessary, on these legal documentation and their implications.