From a Business Times report, it looks like CPF Investment Scheme (CPFIS) is going to see limits to the Expense Ratios of authorised unit trust funds being lowered. Money market funds for instance will be lowered form 0.65% to 0.35% while higher risk funds (typically equities) will be lowered from 1.95% to 1.75%.
Generally, it's a good idea for unit trust funds to have lower expense ratios as that means less leakage for investors. I guess less profits for fund houses. Some may well exit? My guess is that it will lead to less choices available for unit trust investors using CPFIS.
I wish there could be more fund houses that offer index funds for unit trust instead. The fund houses wouldn't need a large (and hence expensive!) investment team to do stock picking since they would only need to track the index. It would provide investors with a well diversified albeit 'lazy' approach in lieu of buying ETF from the stock exchange.
Currently, there are only the Infinity (US, Europe, Global) series of unit trust that are like that. Unfortunately, their expense ratios do not match up as well with ETFs as they are still comparatively high.