LICENSING HANDBOOK

SC-GL/LH-2007 (R13-2022)

1st Issued : 28 September 2007

Revised : 22 March 2022

 LICENSING HANDBOOK

Effective Date Upon 1st Issuance 28 Sep 2007

LIST OF REVISIONS

Revision Series Revision Date Effective Date Series Number

1st Revision 26 Feb 2015 26 Feb 2015 SC-GL/LH-2007 (R1-2015)
2 Revision
nd
1 Apr 2015 1 Apr 2015 SC-GL/LH-2007 (R2-2015)
3 Revision
rd
8 Jul 2015 8 Jul 2015 SC-GL/LH-2007 (R3-2015)
4 Revision
th
9 May 2017 9 May 2017 SC-GL/LH-2007 (R4-2017)
5 Revision
th
21 Jun 2017 21 Jun 2017 SC-GL/LH-2007 (R5-2017)
6 Revision
th
6 Apr 2018 6 Apr 2018 SC-GL/LH-2007 (R6-2018)
7 Revision
th
1 Aug 2018 1 Aug 2018 SC-GL/LH-2007 (R7-2018)
8 Revision
th
15 Aug 2019 15 Aug 2019 SC-GL/LH-2007 (R8-2019)
9th Revision 8 Nov 2019 8 Nov 2019 SC-GL/LH-2007 (R9-2019)
10 Revision
th
16 Apr 2020 16 Apr 20201 SC-GL/LH-2007 (R10-2020)
11 Revision
th
21 Jul 2020 21 Jul 20202 SC-GL/LH-2007 (R11-2020)
12 Revision
th
15 Feb 2021 15 Feb 20213 SC-GL/LH-2007 (R12-2021)
13 Revision
th
22 Mar 2022 22 Mar 2022 SC-GL/LH-2007 (R13-2022)

1
Save for the requirements to have policies and procedures on anti-corruption and whistleblowing under subparagraph
4.02(3) of this handbook, which took effect on 1 June 2020.
2
Save for the requirements under chapter 7A of this handbook, which took effect on 1 January 2021.
3
Save for the requirements under subparagraphs 7.04(5)-7.04(26) of this handbook, which took effect on 31 March
2021.
 CONTENTS

Page
Chapter 1
INTRODUCTION 1

Chapter 2
LICENCES UNDER THE CMSA 8
2.01 What is a CMSL and a CMSRL?
2.02 What are regulated activities?
2.03 Licences for dealing in securities
2.03A Licences for dealing in derivatives
2.04 Licences for dealing in private retirement scheme
2.05 Licences for fund management in relation to portfolio management
2.06 Licences for fund management in relation to asset management
2.06A Licences for clearing for securities or derivatives
2.07 Temporary licence for foreign intermediaries
2.08 In what situation is a licence not required?

Chapter 3
REGISTERED PERSONS 16
3.01 What is the status of registered persons under the CMSA?
3.02 Who is a registered person?
3.03 Who is responsible for supervising registered persons?

Chapter 4
LICENSING CRITERIA 20
4.01 Fit and proper
4.02 Organisational requirements
4.03 Shareholder composition
4.04 Adequacy of financial resources
4.05 What are the requirements for a CMSRL?
4.06 What are the requirements for key management of a CMSL holder and
compliance officer?

Chapter 5
LICENSING CRITERIA FOR AN INDIVIDUAL APPLYING FOR A CMSL
TO CARRY ON FINANCIAL PLANNING 46
5.01 General

Chapter 6
APPLICATION PROCEDURES AND FEES 49
6.01 General
6.02 What is the Electronic Application System (EASy)?
6.03 What is our commitment?
6.04 How to apply for a new licence?
6.05 Submission of Anniversary Reporting for Authorisation of Activity (ARAA)
6.05A Submission of Fit and Proper Compliance Report (Form 6A)
6.06 How to vary a licence?
6.07 How much is the application and licence fee?
6.08 How to withdraw an application?
6.09 What information requires notification to the SC after being licensed?
6.10 What other submissions can be made through EASy?

Chapter 7
CONDITIONS AND RESTRICTIONS OF LICENCE 61
7.01 General
7.02 What are the conditions and restrictions in relation to a CMSL holder?
7.03 What are the conditions and restrictions in relation to a CMSRL holder?
7.04 Permitted activities

Chapter 7A
REQUIREMENTS FOR SUBMISSION OF PROPOSALS AND SPECIFIC 72
PROPOSALS
7A.01 General
7A.02 Definitions
7A.03 Eligibility to act as a principal adviser
7A.04 Requirements for submission of specific proposals to the SC

Chapter 8
CONTINUING PROFESSIONAL EDUCATION (CPE) REQUIREMENT 81
8.01 General
8.02 Mode of learning and points allocation
8.03 Active learning mode
8.04 Development of others learning mode
8.05 Self-directed learning mode
8.06 Procedures for claiming CPE points
8.07 Compliance reporting

Chapter 9
TREATMENT OF EXISTING LICENCE HOLDERS 91
9.01 [Deleted]
9.02 [Deleted]
9.03 [Deleted]
9.04 [Deleted]
9.05 [Deleted]
9.06 [Deleted]

Chapter 10
OUTSOURCING ARRANGEMENT BY CMSL HOLDERS 92
10.01 General
10.02 Material outsourcing arrangement
10.03 Responsibilities and oversight over service providers or sub-contractors
10.04 Notification to the SC
10.05 Contact

Chapter 11
TRADING REPRESENTATIVE 96
11.01 General
11.02 Permitted activities and obligations of a trading representative
11.03 Registration
11.04 Entry requirements
11.05 Procedures for registration
11.06 Duties of the principal
11.07 Refusal of registration
11.08 Procedures for cessation
11.09 Deregistration
11.10 Reporting requirement
11.11 Training requirements for trading representative

Chapter 12
RECOGNITION UNDER THE ASEAN CAPITAL MARKET FORUM (ACMF)
INITIATIVE 100

RECOGNISED REPRESENTATIVE UNDER THE ACMF PASS PROFESSIONAL

MOBILITY FRAMEWORK 100
12.01 General
12.02 Eligibility criteria
12.03 Permitted activities
12.04 Registration
12.05 Validity of the registration
12.06 Duties of the principal
12.07 Obligations of a Recognised Representative
12.08 Refusal of registration
12.09 Procedures for cessation
12.10 Withdrawal of registration
12.11 Reporting requirement

CROSS-BORDER PUBLICATION OF RESEARCH REPORTS 104

12.12 General
12.13 Conditions for cross-border publication of research reports
12.14 Registration
12.15 Rejection of registration
12.16 Procedures for cessation
12.17 Withdrawal of registration
12.18 Ongoing obligations

Appendix 1
POLICY ON PERMITTED ACTIVITIES FOR STOCKBROKING COMPANIES 109
Appendix 2
ELECTRONIC APPLICATION SYSTEM (EASy) 115

Appendix 3
SUPPORTING DOCUMENTS 117

Appendix 4
FEES 131

Appendix 5
NOTIFICATION FORM FOR MATERIAL OUTSOURCING ARRANGEMENTS 132

Schedule 1
FIT AND PROPER CRITERIA FOR TRADING REPRESENTATIVE AND
RECOGNISED REPRESENTATIVE 133

Schedule 2
CHECKLIST FOR APPLICATION FOR REGISTRATION OF TRADING
REPRESENTATIVE 135
 Chapter 1: Introduction

Chapter 1

INTRODUCTION

1.01 The Capital Markets and Services Act 2007 (CMSA) repeals the Securities Industry
Act 1983 (SIA) and the Futures Industry Act 1993 (FIA). The CMSA, which takes
effect on 28 September 2007, introduces a single licensing regime for capital
market intermediaries. Under this regime, a capital market intermediary will only
need one licence to carry on the business in any one or more regulated activities.
This will mean less cost and paperwork for capital market intermediaries that
carry on more than one regulated activity.

1.02 This handbook sets out–

(a) the single licensing regime under the CMSA;
(b) the criteria to be met for applying and varying a licence;
(c) the application procedures; and
(d) ongoing obligations imposed on licensed persons, including conditions and
restrictions attached to a licence.

1.03 This handbook replaces the following guidelines:

(a) Guidelines for Dealers and Dealer's Representatives Under the SIA;
(b) Guidelines for Fund Managers and Fund Manager's Representatives Under
the SIA;
(c) Guidelines for Investment Advisers and Investment Representatives Under
the SIA;
(d) Guidelines for Futures Brokers and Futures Broker's Representatives Under
the FIA;
(e) Guidelines for Futures Fund Managers and Futures Fund Manager's
Representatives Under the FIA;
(f) Guidelines for Futures Trading Advisers and Futures Trading Adviser's
Representatives Under the FIA;
(g) Guidelines for Submission Through the Electronic Licensing Application
System;
(h) Guidelines on Permitted Activities for Stockbroking Companies; and
(i) Guidelines on Compliance with the Continuing Professional Education
Requirement.

1.04 Guidance on the application of the relevant requirements of this handbook has
been inserted, where appropriate. Any departure from the guidance will be taken
into account in the SC’s assessment on whether a breach of this handbook had
occurred.

1
 Chapter 1: Introduction

1.05 The SC may, upon an application, grant an exemption from or a variation to the
requirements of this handbook if the SC is satisfied that–
(a) such variation, if granted, is not contrary to the intended purpose of the
relevant provision in this handbook; or
(b) there are mitigating factors which justify the said exemption or variation.

Note:
1. This handbook is issued pursuant to section 377 of the CMSA and has the effect of
a guideline issued by the Securities Commission Malaysia (SC). The SC can institute
an action against any person contravening the requirements specified in this
handbook, including administrative actions against licensed persons; and
2. Unless otherwise defined, all words used have the same meaning as defined by the
CMSA.

1.06 Acronyms and Definitions

For the purposes of this handbook:

ACMF means the ASEAN Capital Markets Forum.

adviser means an approved adviser or continuing

adviser admitted by Bursa Malaysia Securities
Berhad into the register of advisers to carry out
initial listing activities or post-listing activities in
the Leading Entrepreneur Accelerator
Programme (LEAP) Market.

approved adviser means an adviser admitted by Bursa Malaysia

Securities Berhad into the register of advisers
for the LEAP Market to carry out initial listing
activities or post-listing activities in the LEAP
Market.

back office function means any administrative or operational

function other than a regulated activity as
specified under Schedule 2 of the CMSA.

BNM means Bank Negara Malaysia.

Bursa Securities means Bursa Malaysia Securities Berhad.

Bursa Derivatives means Bursa Malaysia Derivatives Berhad.

business trust has the meaning assigned to it in subsection

2(1) of the CMSA.

2
 Chapter 1: Introduction

CFD means contract for difference. A contract made

between a buyer and a seller to gain exposure
in the allowable underlying instrument whereby
differences in settlement are made through
cash payments.

chief executive has the meaning assigned to it in subsection

2(1) of the CMSA.

clearing for securities or means whether as principal or agent, carrying

derivatives on the business of assuming obligations for the
delivery and payment of a person’s transaction
relating to listed securities or standardised
derivatives as set out in the rules of the
approved clearing house.

clearing participant means a participant admitted under the rules

of the clearing house.

clearing house has the meaning assigned to it in subsection

2(1) of the CMSA.

CMSL means Capital Markets Services Licence.

CMSR means the Capital Markets Services

Regulations 2007.

CMSRL means Capital Markets Services

Representative’s Licence.

compliance officer means the principal person responsible for

compliance function.

ComRep means Common Reporting platform which is a

web-based system for reports submission in
the form of eXtensible Business Reporting
Language (XBRL) instance documents.

continuing adviser means an adviser admitted by Bursa Malaysia

Securities Berhad into the register of advisers
to carry out only post-listing activities in the
LEAP Market.

3
 Chapter 1: Introduction

controller has the same meaning as defined under

subsection 60(7) of the CMSA, which means a
person who–
(a) is entitled to exercise, or control the
exercise of, not less than 15% of the votes
attached to the voting shares in the CMSL
holder;
(b) has the power to appoint or cause to be
appointed a majority of the directors of the
CMSL holder; or
(c) has the power to make or cause to be
made, decisions in respect of the business
or administration of such CMSL holder, and
to give effect to such decisions or cause
them to give effect to.

CPE means Continuing Professional Education.

CPE Secretariat means the Securities Industry Development

Corporation, as the appointed Secretariat to
administer the operational function of CPE
related matters and assures quality of CPE-
approved courses.

derivatives exchange has the meaning assigned to it in subsection

2(1) of the CMSA.

EASy means Electronic Application System.

ERP means an employee of a registered person.

external auditor means an auditor who is not the current

statutory auditor appointed by the CMSL
holder.

FIMM means the Federation of Investment Managers

Malaysia.

FMAM means the Financial Markets Association of

Malaysia.

group means the CMSL holder’s direct or ultimate

holding company or any of its related
companies.

4
 Chapter 1: Introduction

Home Regulator means the capital markets regulator of the

Recognised ACMF Member Country where the
Registered Representative is primarily licensed,
registered, approved or authorised.

Industry Competency means the framework in the Malaysian capital

Framework® market which sets out in detail the required
knowledge, skills and attributes (behavioural)
for job roles and competencies titles across the
regulated activities.4

investment bank (IB) means an entity that holds a CMSL pursuant to

section 58 of the CMSA for the regulated
activity of dealing in securities and holds a
licence under section 10 of the Financial
Services Act 2013 to carry on an investment
banking business, and duly established
pursuant to the Guidelines on Investment Bank
issued jointly by BNM and the SC.

Islamic bank means a bank licensed under the Islamic

Financial Services Act 2013.

licensed bank means a bank licensed under the Financial

Services Act 2013.

manager has the meaning assigned to it in subsection

60(8) of the CMSA.

management company has the meaning assigned to it in subsection

2(1) of the CMSA.

non-participating means a holder of a CMSL for the regulated

organisation (non-PO) activity of dealing in securities but is not a
participating organisation of the stock
exchange.

outsourced functions means back office, internal audit, risk

management, compliance functions and any
other function that may be determined by the
SC.

outsourcing arrangement means any arrangement for the outsourcing of

outsourced functions between a CMSL holder
and a service provider or a sub-contractor.

4
More details are provided on the SIDC website.

5
 Chapter 1: Introduction

over-the-counter or OTC means bonds issued by private and public

bonds corporations that are traded over-the-counter
(OTC).

participating organisation means any person who carries on the business

(PO) of dealing in securities and is recognised as a
participating organisation by the rules of the
stock exchange and the terms "participant" and
"participantship" shall be construed
accordingly.

policy on permitted means the Policy on Permitted Activities for

activities for stockbroking Stockbroking Companies as set out under
companies Appendix 1 of this handbook.

real estate investment or “property trust fund” means a unit trust

trust (REIT) scheme that invests or proposes to invest
primarily in income-generating real estate.

Recognised ACMF means a signatory country of the Memorandum

Member Country of Understanding on the ASEAN Capital
Markets Forum Pass under ASEAN Capital
Markets Professional Mobility Framework.

Recognised Representative means a person from a Recognised ACMF

(RR) Member Country who undertakes capital
market activities as specified in this handbook
under the ASEAN Capital Markets Professional
Mobility Framework and registered with the SC
under subsection 76(2) of the CMSA.

service provider means an entity within the group or an external

entity to which the CMSL holder has outsourced
the outsourced functions and includes any
subsequent service provider(s) to whom the
initial service provider or any subsequent
service provider has further contracted the
outsourced functions.

sophisticated investors means persons prescribed under Part I of

Schedules 6 and 7 of the CMSA.

SIDC means the Securities Industry Development

Corporation.

SCLE means the SC Licensing Examinations.

6
 Chapter 1: Introduction

special scheme broker means a foreign stockbroking company

established pursuant to the Application for
Establishment o f Foreign Stockbroking
Companies Under the Special Scheme.

special scheme fund means a holder of a CMSL for the regulated

manager activity of fund management established
pursuant to the Application for Establishment
o f Foreign Fund Management Companies
Under the Special Scheme.

stockbroking company means a holder of a CMSL for the regulated

activity of dealing in securities and is registered
as a participating organisation under the rules
of the stock exchange and the terms
"stockbroker" or "broker" shall be construed
accordingly.

stock exchange has the meaning assigned to it in subsection

2(1) of the CMSA.

sub-contracting means the act of further contracting any

outsourced functions or a sub-component of
that function to another service provider.

trading participant (TP) has the meaning assigned to it in the rules of

the derivatives exchange.

trading representative means a person who executes securities trades

for a participating organisation and is
registered with the SC under section 76 of the
CMSA.

universal broker means a stockbroking company that has

merged with or acquired at least three other
stockbroking companies and has satisfied all
the conditions and requirements stipulated by
the SC under the Policy Framework for
Stockbroking Industry Consolidation.

1+1 broker means a stockbroking company that has

complied with the Policy Framework for
Stockbroking Industry Consolidation and has
acquired, taken-over, amalgamated or merged
with at least one other stockbroking company.

7
 Chapter 2: Licences Under the CMSA

Chapter 2

LICENCES UNDER THE CMSA

2.01 What is a CMSL and a CMSRL?

(1) The CMSA provides for two types of licences:

• CMSL, which entitles an institution to carry on the business in any one
or more regulated activities; and
• CMSRL, which entitles an individual to carry on any one or more
regulated activities on behalf of his principal.

(2) Only a holder of a CMSL or a CMSRL can carry on any of the regulated
activities that the CMSL or CMSRL permits.

Guidance to representatives

Note 1
You can only carry on regulated activities that your principal is licensed to carry
on.

For example, if you carry on the regulated activity of financial planning, then
your principal must be licensed to carry on that activity.

Note 2
The combination of activities that a representative is allowed to carry on
depends on the nature of the activities, and whether there are inherent
conflicts arising from simultaneously carrying on the activities.

For example, if you are an employee of an investment bank licensed to carry

on the full range of regulated activities, including dealing in securities and
advising on corporate finance activities, it is unlikely that you will be allowed
to carry on dealing in securities and advising on corporate finance, both at the
same time.

Note 3
If your activity of corporate finance also involves assisting your principal in its
underwriting arrangements, you will need to be licensed for the two regulated
activities, i.e. advising on corporate finance and dealing in securities. In this
instance, your dealing capability will be restricted to the underwriting
arrangements that relates to the transaction which you had provided corporate
finance advice on. You will not, however, be required to sit for any additional
licensing examination for your dealing activities.

8
 Chapter 2: Licences Under the CMSA

Obligations on anniversary of licence

(3) Both CMSL and CMSRL are valid in perpetuity. However, licensed persons
will continue to have obligations on the anniversary of their licences.

2.02 What are regulated activities?

(1) There are eight types of regulated activities under the CMSA. The list of
regulated activities is set out in Schedule 2 of the CMSA. They are–
• dealing in securities;
• dealing in derivatives;
• clearing for securities or derivatives;
• fund management;
• dealing in private retirement schemes;
• advising on corporate finance;
• investment advice; and
• financial planning.

(2) The licence issued under the CMSA will set out the specific regulated
activities that you can conduct.

Illustration 1
An investment bank applies to the SC for approval to carry on the full range of
regulated activities under the CMSA. In this case, the licence will indicate that
the investment bank is allowed to carry on all the following regulated activities:
• Dealing in securities;
• Dealing in derivatives;
• Clearing for securities or derivatives;
• Fund management;
• Dealing in private retirement schemes;
• Advising on corporate finance;
• Investment advice; and
• Financial planning.

9
 Chapter 2: Licences Under the CMSA

Illustration 2
A 1+1 broker applies to the SC for approval to carry on the range of regulated
activities allowed under the policy on permitted activities for stockbroking
companies. In this case, the licence will indicate that the broker is allowed to
carry on all the following regulated activities:
• Dealing in securities;
• Dealing in derivatives;
• Clearing for securities or derivatives;
• Dealing in private retirement schemes;
• Advising on corporate finance;
• Investment advice; and
• Financial planning.

2.03 Licences for dealing in securities

Dealing in securities – general

(1) If you carry on the business of dealing in securities, you will be granted a
CMSL for dealing in securities. You may deal in all securities, including
equities, debentures, unit trust products and any other structured product.

Dealing in securities – restricted

(2) If you carry on the business of dealing in securities but is not registered as
a PO, you will be granted a restricted dealing in securities licence. Currently,
there are three categories of restricted dealing in securities licence:
(a) Restricted dealing in unit trust products;
(b) Restricted dealing in listed securities; or
(c) Restricted dealing in OTC bonds.

(3) The restricted dealing in securities licence will indicate which category that
you will be dealing in. If you intend to expand your respective restricted
dealing in securities licence to include any of the categories referred to in
subparagraph 2.03(2), you will need to seek the SC’s approval for variation
of licence.

10
 Chapter 2: Licences Under the CMSA

Dealing in unit trust products

(4) The requirement to obtain a CMSL for dealing in unit trust products is only
applicable to a principal who deals in unit trust products, including:
(a) A unit trust management company;
(b) A CMSL holder licensed for fund management in relation to portfolio
management who also wishes to deal in unit trust products;
(c) A CMSL holder licensed for financial planning distributing unit trust
products; and
(d) Any other person as the SC deems appropriate.

(5) Such principal is required to be a member of or registered with a body

approved by the SC, which is FIMM.

Agents and employees of a holder of a CMSL for dealing in unit trust products

(6) Agents and employees of a holder of a CMSL for dealing in unit trust
products only will not be required to hold a CMSRL. However, they must be
registered with FIMM and comply with the provisions of Chapter 3 on
registered persons and any other guidelines issued by the SC.

2.03A Licences for dealing in derivatives

Dealing in derivatives – general

(1) If you carry on the business of dealing in derivatives and is registered as a

TP, you will be granted a CMSL for dealing in derivatives.

Dealing in derivatives – restricted

(2) If you carry on the business of dealing in derivatives in relation to CFD, you
will be granted a restricted dealing in derivatives licence, under the
category of restricted dealing in CFD.

2.04 Licences for dealing in private retirement schemes

(1) The requirement to obtain a CMSL for dealing in private retirement schemes
is only applicable to a principal who deals in private retirement schemes,
including:
(a) An approved private retirement scheme provider under the CMSA;
(b) Unit trust management companies;
(c) A CMSL holder licensed for fund management in relation to portfolio
management;

11
 Chapter 2: Licences Under the CMSA

(d) A CMSL holder licensed for financial planning distributing private

retirement schemes;
(e) A CMSL holder licensed for dealing in securities;
(f) A CMSL holder licensed for dealing in securities restricted to unit trusts;
(g) An insurance company licensed under the Financial Services Act 2013
(FSA);
(h) An approved insurance broker under section 11 of the FSA 2013 to
carry on insurance broking business or approved takaful broker under
section 11 of the Islamic FSA 2013 to carry on takaful broking business;
(i) Financial advisers licensed under the Insurance Act 1996; and
(j) Any other person as the SC deems appropriate.

(2) Such principal is required to be a member of or registered with a body

approved by the SC, which is FIMM.

Agents and employees of a holder of a CMSL for dealing in private retirement

schemes or of a Registered Person dealing in private retirement schemes

(3) Agents and employees of a holder of a CMSL for dealing in private

retirement schemes or of a Registered Person dealing in private retirement
schemes only will not be required to hold a CMSRL. However, they must be
registered with FIMM and comply with the provisions of Chapter 3 on
registered persons and any other relevant guidelines issued by the SC.

2.05 Licences for fund management in relation to portfolio management

Portfolio management

(1) If you carry on the business of fund management in relation to portfolio

management, a licence for fund management in relation to portfolio
management will be granted to manage a portfolio of securities or
derivatives or a combination of both.

Portfolio management – digital investment management

(2) If you carry on the business of fund management incorporating innovative

technologies into your automated discretionary portfolio management
services offered to your clients, you will be granted a licence for fund
management in relation to portfolio management as a digital investment
manager.

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 Chapter 2: Licences Under the CMSA

Portfolio management – boutique portfolio management

(3) If you carry on the business of fund management in relation to portfolio

management that–
(a) manage assets of not more than RM750 million;
(b) only deal with sophisticated investors; and
(c) has total number of clients which does not exceed 50, and where such
clients are funds or collective investment schemes, the maximum
number of such funds or collective investment schemes is 15,
you will be granted a licence for fund management in relation to portfolio
management as a boutique portfolio manager.

Guidance on portfolio management

A holder of a CMSL for fund management in relation to portfolio management
including digital investment management company and boutique portfolio
management company may provide investment advisory services to its clients,
pursuant to an advisory mandate.

2.06 Licences for fund management in relation to asset management

(1) If you carry on the business of a trustee manager only, you will be granted
a fund management in relation to asset management licence, restricted to
business trusts, i.e. a restricted CMSL for fund management to manage
business trusts only.

(2) If you carry on the business of a REIT manager only, you will be granted a
fund management in relation to asset management licence, restricted to
real estate investment trusts, i.e. a restricted CMSL for fund management
to manage REITs only.

(3) Only the following may apply for a CMSL for fund management in relation
to asset management restricted to REITs:
(a) An existing holder of a CMSL for fund management in relation to
portfolio management that is also a unit trust management company;
or
(b) A subsidiary of the following:
(i) A company involved in the financial services industry in Malaysia;
(ii) A property-development company;
(iii) A property-investment holding company; or
(iv) Any other person as the SC deems appropriate.

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 Chapter 2: Licences Under the CMSA

2.06A Licences for clearing for securities or derivatives

(1) If you carry on the business of clearing for securities or derivatives, you will
be granted a licence for clearing for securities or derivatives.

(2) In respect of clearing for derivatives, persons who carry on the business of
dealing in derivatives and intend to continue undertaking clearing activity
for derivatives are deemed to be licensed under the CMSA for such clearing
activity. Therefore, such persons are not required to make any new
application for a licence to undertake clearing for derivatives.

(3) Employees of a holder of a CMSL for clearing for securities or derivatives

will not be required to hold a CMSRL.

2.07 Temporary licence for foreign intermediaries

(1) A foreign intermediary may be considered for a temporary CMSRL provided

the foreign intermediary satisfies the following conditions:
(a) That the foreign intermediary is appropriately licensed, registered or
approved in its home jurisdiction;
(b) In the SC's opinion, the regulation of the foreign intermediary by its
home regulator is sufficiently equivalent to the regulation of the SC;
and
(c) There are effective co-operation arrangements between the home
regulator and the SC. Effective co-operation arrangements will provide
for–
(i) prompt sharing of information by the relevant home regulator; and
(ii) effective co-operation on supervision, investigation and
enforcement.

(2) The temporary CMSRL granted to the foreign intermediary is subjected to

the following conditions:
(a) The regulated activities carried out in Malaysia must only be provided
to sophisticated investors set out in paragraphs 9, 10 and 11 of
Schedule 6 of CMSA;
(b) The regulated activities carried out in Malaysia must comply with the
requirements of the foreign intermediary's home regulatory regime;
(c) Throughout the duration of its licence the foreign intermediary must
remain licensed, registered or approved under its home regulatory
regime; and
(d) In the SC’s opinion, the foreign intermediary’s home regulatory regime
must continue to be sufficiently equivalent to our own regime.

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 Chapter 2: Licences Under the CMSA

(3) The tenure of the temporary CMSRL granted to the foreign intermediary will
be for a maximum period of three months. The foreign intermediary must
submit a fresh application for a further three-month period if more time is
required to complete the work assignment. We may grant a temporary
licence for a total maximum period of six months within a 24-month period.
The 24-month period will commence on the date of issue of the first
temporary licence.

(4) Applications for a temporary CMSRL licence must be made in the form and
manner as specified by the SC.

Guidance on product support by foreign intermediaries

If a foreign intermediary is invited by a CMSL holder to provide support and
training for a particular product, he will not be required to hold a licence
provided that–
(a) the foreign intermediary has an arrangement or understanding with the
CMSL holder;
(b) all marketing activities are conducted by the CMSL holder;
(c) intermediation is carried out by the CMSL holder that takes full
responsibility and accountability for any marketing or provision of
investment advice for the product;
(d) the foreign intermediary does not distribute any of his own promotional
materials to the clients of the CMSL holder; or
(e) the foreign intermediary is appropriately licensed, registered or approved
in his home jurisdiction.

2.08 In what situation is a licence not required?

(1) In a limited number of situations, persons or entities may engage in a

regulated activity without having to hold a licence. These situations are set
out in Schedule 3 (Specified Persons) and Schedule 4 (Registered Persons)
of the CMSA. It is important that these activities are carried on within the
parameters set out in Schedule 3 and Schedule 4 by specified persons and
registered persons respectively, such as being solely incidental to the
carrying on of the practice of their profession, or where such activities are
being performed solely for the benefit of a related corporation or restricted
to the activities provided for in Schedule 4.

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 Chapter 3: Registered Persons

Chapter 3

REGISTERED PERSONS

3.01 What is the status of registered persons under the CMSA?

(1) Registered persons are allowed to carry out certain regulated activities
without having to apply for a CMSL. These persons include the financial
institutions set out in Schedule 4 of the CMSA and other entities, such as
credit rating agencies and bond pricing agencies. The scope of regulated
activities which may be carried out by registered persons are set out in the
Second Column of Schedule 4. Financial institutions engaging in regulated
activities will, however, be required to comply with certain integral investor
protection and conflict management provisions in the CMSA in ensuring that
minimum standards of conduct are observed.

(2) Registered persons also include unit trust agents who are registered with
FIMM.

3.02 Who is a registered person?

(1) Section 76 of the CMSA sets out the following to be registered persons:
(a) Persons set out in Parts 1 and 2 of Schedule 4 of the CMSA;
(b) Individuals registered with a recognised self-regulatory organisation;
(c) Individuals registered with a body approved by the SC; and
(d) Persons who are registered with the SC.

Financial institutions who are registered persons

(2) Persons set out in Part 1 of Schedule 4 of the CMSA are–

• licensed banks;
• licensed merchant banks;
• licensed Islamic banks;
• licensed finance companies;
• licensed insurance companies;
• registered takaful operators;
• Bank Kerjasama Rakyat Malaysia Berhad;
• Bank Simpanan Nasional Berhad;
• Bank Pembangunan Malaysia Berhad; and
• KAF Investment Bank Berhad.

16
 Chapter 3: Registered Persons

(3) For clarification, an investment bank is not a registered person for purposes
of the CMSA. This is because an investment bank may be licensed as a
CMSL holder for all eight regulated activities.

Other registered persons

(4) Registered persons other than financial institution who are described in Part
2 of Schedule 4 are–
(a) any venture capital corporation and venture capital management
corporation registered under the SC's Guidelines on the Registration of
Venture Capital and Private Equity Corporations and Management
Corporations;
(b) any credit rating agency registered under the SC’s Guidelines on the
Registration of Credit Rating Agencies;
(c) any bond pricing agency registered under the SC's Guidelines on the
Registration of Bond Pricing Agencies; and
(d) Pengurusan Danaharta Nasional Berhad and all its subsidiaries
prescribed under subsection 60(2) of the Pengurusan Danaharta
Nasional Berhad Act 1998.

Individuals registered with a body approved by the SC

Agents and employees of a holder of a CMSL for dealing in unit trust products

(5) Agents and employees who deal in unit trust products on behalf of a holder
of CMSL for dealing in unit trust products will not be required to hold a
CMSRL. Such agents and employees are, however, required to be
registered with FIMM.

(6) Further, these agents and employees must pass the examinations for
persons dealing in unit trusts (PDUT) or any other qualification recognised
by FIMM and approved by the SC in order to carry on their dealing in unit
trust products.

Agents and employees of a holder of a CMSL for dealing in private retirement

schemes

(7) Agents and employees who deal in private retirement schemes on behalf
of a holder of CMSL for dealing in private retirement schemes will not be
required to hold a CMSRL. Such agents and employees are however,
required to be registered with FIMM.

17
 Chapter 3: Registered Persons

(8) Further, these agents and employees must pass the examinations for
persons dealing in private retirement schemes or any other qualification
recognised by FIMM and approved by the SC to carry out their dealing in
private retirement schemes.

Persons registered under subsection 76(2) of the CMSA

(9) An employee of a PO who only accept clients’ orders (order taking) and
executes securities trades for the PO must be registered with the SC under
subsection 76(2) of the CMSA as a trading representative. The
requirements relating to trading representative are set out in Chapter 11 of
this handbook.

(10) An eligible professional from a Recognised ACMF Member Country, who

undertakes capital market activities as specified in this handbook under the
ASEAN Capital Markets Professional Mobility Framework must be registered
with the SC under subsection 76(2) of the CMSA as a Recognised
Representative. The requirements relating to the Recognised
Representative are also set out in Chapter 12 of this handbook.

Guidance to registered persons

Except for the category of registered persons under subsection 76(2) of the
CMSA, you do not need to apply for registration with the SC as your registered
person status is provided for by operation of law.

3.03 Who is responsible for supervising registered persons?

Financial institutions

(1) BNM is responsible for supervising this category of registered persons in

terms of ensuring that–
(a) this category of registered persons complies with the integral investor
protection provisions in sections 91, 92, 93 and 97 of the CMSA and
any regulation or guideline made pursuant to these sections; and
(b) individuals employed by this category of registered persons are fit
and proper and that the registered persons maintain a register of
these individuals.

Guidance to financial institutions

The CMSA provides a one-year transitional period from 28 September 2007 for
financial institutions to comply with the relevant requirements in the CMSA. In
supervising such financial institutions, BNM and the SC will co-ordinate to
ensure that similar standards and requirements are applied to the financial
institutions and the employees with regard to the regulated activities that the
financial institutions carry on.

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 Chapter 3: Registered Persons

Other registered persons

(2) The SC is responsible for supervising all categories of registered persons

other than financial institutions.

(3) The SC may withdraw a registration which has been accorded to a person–
(a) who has been registered with the SC; or
(b) specified in Part 2 of Schedule 4 of the CMSA,

if it is necessary for the protection of investors or public interest or for the

maintenance of an orderly market.

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 Chapter 4: Licensing Criteria

Chapter 4

LICENSING CRITERIA

In authorising5 any person wishing to undertake capital market activities6, the SC will
not grant authorisation unless the application is in the best interest of Malaysia. In
determining the best interest of Malaysia, the SC will give regard to any one or more
of the following:

(a) The area of specialisation and level of expertise that can be offered to the capital
market including the effect on productivity, transference of skills and efficiency
and quality of capital market services;

(b) The risk posed on the systemic stability of the capital market including activities
and conduct that will likely impact the orderly functioning of the capital market;

(c) Contribution towards attracting investments, enhancing market linkages and

promoting vibrancy in the capital market;

(d) Ability in developing strategic or nascent sectors in the capital market; or

(e) The degree and significance of participation of Malaysians in the capital market.

4.01 Fit and proper

(1) Persons who apply to be licensed under the CMSA must be fit and proper,
as set out in sections 64 and 65 of the CMSA. In assessing if you are fit and
proper, we refer to the following criteria:
• Your organisational requirements;
• Your shareholding composition;
• The adequacy of your financial resources; and
• Requirements relating to representatives' competencies.

In assessing a licence application, the SC is also guided by relevant policies

and guidelines, such as the policy on permitted activities for stockbroking
companies and the Guidelines on Investment Banks.

(2) Every CMSL applicant will be required to submit its business model and
scope of activities that it plans to carry on.

5
Authorising includes grant of licence, registration or approval, as the case may be.
6
Capital market activity means any type of regulated activity or capital market services as defined under the CMSA.

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 Chapter 4: Licensing Criteria

What are the requirements for a CMSL?

4.02 Organisational requirements

Incorporation

(1) If you want to carry on any of the following regulated activities, you must
be a company incorporated in Malaysia:
• Dealing in securities;
• Dealing in derivatives;
• Clearing for securities or derivatives;
• Fund management;
• Dealing in private retirement schemes;
• Advising on corporate finance; and
• Investment advice.

(2) However, if you want to carry on the regulated activity of financial planning,
you may do so either as a company, sole proprietorship or partnership. If
you are a sole proprietor or in a partnership, you will be granted a CMSL
but you will not be allowed to have any licensed representative acting on
your behalf.

Member of an alternative dispute resolution body

(2A) CMSL holders who carry on one or more of the following regulated activities
are required to be a member of an alternative dispute resolution body (ADR
body) that is approved by the SC:
• Dealing in securities;
• Dealing in derivatives;
• Fund management but excluding asset manager managing listed unit
trust schemes; and
• Dealing in private retirement schemes.

(2B) A CMSL holder that is a member of an alternative dispute resolution body

must comply with the rules of the ADR body.

Audit Oversight Board

(2C) As a public interest entity, CMSL holders that carry on one or more of the
following regulated activities are required to engage auditors that are
registered with the Audit Oversight Board:
• Dealing in securities;
• Dealing in derivatives; and
• Fund management.

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 Chapter 4: Licensing Criteria

Capital Market Compensation Fund

(2D) Holders of a CMSL for dealing in securities, dealing in derivatives or fund

management are required to contribute to the Capital Market
Compensation Fund in accordance with the Capital Markets and Services
(Capital Market Compensation Fund) (Contribution) Order 2012.

Organisational competence

(3) As a CMSL applicant, you must ensure that your business is properly
established, which includes the following:
• An organisational structure with clear lines of responsibility and
authority;
• Necessary IT systems and infrastructure including policies and
procedures for IT audit as well as plans for continuous investment in
systems development and security system;
• Adequate internal control systems;
• Risk management policies and procedures, including having in place a
business continuity plan and processes;
• Policies and procedures on conflict management, anti-corruption,
whistleblowing, and the monitoring of unethical conduct and market
abuse that are appropriate to the nature, scale and complexity of its
business; and
• Policies and procedures to ensure compliance with applicable laws and
regulations.

Guidance to subparagraph 4.02(3)

The policies and procedures on anti-corruption should be guided by the
Guidelines on Adequate Procedures issued pursuant to subsection 17A(5) of
the Malaysian Anti-Corruption Commission Act 2009.

(3A) If you are applying for a CMSL to carry out digital investment management
activities, you must ensure that you have technology capabilities and
support to undertake the digital investment management business. You
must–

(a) have sufficient understanding of the rationale, risks and rules behind
the algorithm underpinning the digital investment management
business;

(b) ensure at all times the outcomes produced by the algorithm are—
(i) consistent with the digital investment management company’s
investment strategies;
(ii) commensurate with the risk profile of the investor; and

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 Chapter 4: Licensing Criteria

(iii) compliant with securities laws and relevant guidelines; and

(c) have the system to support the digital investment management

business which includes maintaining a secure environment pursuant
to the Guidelines on Management of Cyber Risk and other relevant
guidelines.

(4) In situations where you want to carry on more than one regulated activity,
you must demonstrate that you have–
(a) the requisite system and procedures to monitor all relevant activities
within your organisation; and
(b) control procedures in place to monitor any conflict of interest,
unethical conduct and market abuse.

(4A) As part of the business model and scope of activities to support the
application for a CMSL, the following may also be required:
(a) Value proposition of the business model;
(b) Investments in creating investor awareness, product understanding
and development of the industry; and
(c) An independent report on operational and system readiness.

Digital value proposition

(4B) In addition to the above, if you carry on the activity of digital investment
management, you must also comply with the digital value proposition,
which includes, but is not limited to, the following:

(a) Digital business model

The business model must have a clear value proposition that
demonstrates how digital innovations can deliver positive outcomes
to its target investors and any other target beneficiaries.

(b) User-centric delivery

Delivery of services to target investors and any other target
beneficiaries must include user-centric interface and experience,
integrated investor education on the services offered to create
greater confidence, trust and engagement, and transparent fee
structure.

(c) Automated investment proposition

Automated proposition must involve core components of portfolio
management services including risk profiling, suitability assessment,
asset allocation and rebalancing. Applicants may not be eligible if
only limited parts or only non-core parts of the investment service are
automated.

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 Chapter 4: Licensing Criteria

Fit and proper requirements for directors, chief executive, managers

and controllers of a CMSL applicant

General requirements

Your directors, chief executive, managers and controllers must be fit and proper.
As a CMSL applicant, you must ensure that none of the grounds specified in
subparagraphs 64(1)(h), 64(1)(i), 64(1)(l) and 64(1)(m) of the CMSA applies to
any of them.

Prior approval for establishment of new business or acquisition of

shares / interests in or outside Malaysia

(5) A CMSL holder must obtain the SC’s prior approval when establishing a new
business or acquiring shares / interests in or outside Malaysia in relation to
capital market-based activities.

Notification of establishment of new business or acquisition of shares

/ interests in or outside Malaysia

(6) A CMSL holder must notify the SC within 14 days of establishing a new
business or acquiring shares / interests in or outside Malaysia in relation to
non-capital market-based activities.

Notification of disposal of business or shares / interests in or outside

Malaysia

(7) A CMSL holder must notify the SC within 14 days of disposing of a business
or shares / interests in or outside Malaysia.

Prior approval for change in controller

(8) A CMSL holder is required to obtain the SC's prior approval in circumstances
where any proposed change in the direct or indirect shareholding of the
CMSL holder will result in the change in its controller.

(9) Controller has the same meaning as defined under subsection 60(7) of the
CMSA, which means a person who–

(a) is entitled to exercise, or control the exercise of, not less than 15%
of the votes attached to the voting shares in the CMSL holder;

(b) has the power to appoint or cause to be appointed a majority of the

directors of the CMSL holder; or

(c) has the power to make or cause to be made, decisions in respect of

the business or administration of such CMSL holder, and to give effect
to such decisions or cause them to be given effect to.

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 Chapter 4: Licensing Criteria

Prior approval for the appointment of chief executive

(10) All CMSL holders, including investment banks should seek the SC’s prior
approval for the appointment of its chief executive.

(11) The chief executive is expected to demonstrate the capability and

competence to lead the company. The chief executive must act honestly
and exercise due skill and diligence and be suitably qualified to assume the
position.

(11A) If the position of chief executive becomes vacant, the CMSL holder is
expected to take the necessary steps to fill the position within three months
from the date of the vacancy.

Process flow for the appointment of directors

(12) You can appoint directors without prior approval of the SC. However, before
appointing a director, you must undertake the necessary due diligence to
ensure that the candidate is fit and proper, and suitably qualified to assume
the position.

(13) You are required to notify the SC in writing on the appointment or

reappointment of a director within two business days of the
appointment or reappointment, or prior to any public announcement,
whichever is earlier.

(14) We will carry out a post-appointment assessment of directors of a CMSL

holder. If our assessment reveals that a director is not fit and proper, we
may direct you to remove the person from the post.

Guidance to investment banks

You will also need to comply with the Guidelines on Investment Banks for the
appointment of your directors and chief executive officers.

Requirement for director to attend the Capital Market Director

Programme (CMDP)

(15) Effective from 1 May 2015, directors of CMSL holders for dealing in
securities, dealing in derivatives and fund management in relation to
portfolio management must complete the CMDP.

(16) Newly appointed directors must complete CMDP within six months from the
date of their appointment. Directors who were appointed prior to 1 May
2015 must complete the CMDP within the timeline specified by the SC.

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 Chapter 4: Licensing Criteria

Requirement for licensed director

(17) Except as provided in subparagraphs 4.02(18) to 4.02(22), you must have

at least one director who–

(a) has a minimum of 10 years of relevant experience in the licensed

regulated activity;

(b) holds a CMSRL for the regulated activity; and

(c) must be approved by the SC prior to undertaking the function as a

licensed director.

(17A) If the position of licensed director becomes vacant, the CMSL holder is
expected to take the necessary steps to fill the position within three months
from the date of the vacancy.

(18) The requirement in subparagraph 4.02(17) is not mandatory if you are an

investment bank, a boutique portfolio management company or only
licensed for clearing for securities or derivatives.

(18A) If you are licensed for digital investment management, your director is
required to have a minimum of five years of relevant experience in fund
management and holds a CMSRL for portfolio management.

(19) If you are licensed for dealing in unit trust products or dealing in private
retirement schemes, your director need not hold a CMSRL. However, he
must be registered with the FIMM and have a minimum of 10 years of
relevant experience in the capital market industry.

(20) If you are licensed for both dealing in unit trust products and dealing in
private retirement schemes, you can appoint one director who must be
registered with FIMM for dealing in both private retirement schemes and in
unit trust products and also have a minimum of 10 years of relevant
experience in the capital market industry.

(21) If you are licensed for financial planning and for dealing in unit trust
products and/or dealing in private retirement schemes, your director must
hold a CMSRL for the regulated activity of financial planning and must be
registered with FIMM for dealing in unit trust products and/or private
retirement schemes, and also have a minimum of 10 years of relevant
experience in the capital market industry.

(22) If you are licensed for fund management in relation to asset management,
your director must hold a CMSRL for the regulated activity of fund
management in relation to asset management restricted to business trusts
or REITs. Your director must show the relevant experience and knowledge
in the management of the specific assets invested in by the asset manager,
or in the management of a class of asset in a unit trust scheme.

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 Chapter 4: Licensing Criteria

Note: The requirement for appointing a licensed director for a regulated

activity is to ensure that a person with board representation will be able to
provide direction and feedback to the board on issues relating to the carrying
on of the regulated activity, as well as supervising representatives with respect
to such an activity.

Requirement for head of regulated activity

(23) If you are licensed to carry on more than one type of regulated activity,
then in addition to the requirement of a licensed director, you must also
have a person with a minimum of eight years of relevant experience to
head each additional regulated activity. The requirement for appointing a
head for each regulated activity is to ensure that a person with the
necessary skills and expertise will provide guidance and supervision to the
representatives carrying on that particular regulated activity. However, this
requirement is not applicable for the regulated activity of clearing for
securities or derivatives.

(24) An individual can be appointed to be the head of more than one regulated
activity, provided he is fit and proper, and there is no conflict in him
performing such functions. The head must–

(a) hold a CMSRL;

(b) have sufficient authority to supervise the business of the licensed

regulated activity; and

(c) be approved by the SC prior to undertaking the function as a head of

regulated activity.

(25) If you are an investment bank where it is not mandatory to have a licensed
director, a head is required for each regulated activity.

Requirement for head of operations

(26) If you are licensed to carry on the regulated activity of dealing in securities
and you are a participating organisation (PO) of the stock exchange, you
must have a head of operations and this person must not be involved in
dealing in securities. This is to avoid any conflict of interest that may arise
if such a person deals in securities. In addition, such person must be
approved by the SC prior to undertaking the function as a head of
operations.

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 Chapter 4: Licensing Criteria

Requirement for compliance officer

(27) If you are licensed to carry on the regulated activity of dealing in securities
and you are a PO, dealing in derivatives or fund management in relation to
portfolio management or clearing for securities or derivatives, you are
required to have a compliance officer. This person must carry out the
compliance function pertaining to the securities laws, regulations and
guidelines and any other applicable law governing the regulated activities.
He must not deal in securities, deal in derivatives or manage funds. This is
to avoid potential conflicts of interest. In addition, such person must be
approved by the SC prior to undertaking the function as a compliance
officer.

Guidance to subparagraph 4.02(27)

If you are licensed to carry on the activity of dealing in securities (restricted to
listed securities or OTC bonds or unit trusts), fund management in relation to
asset management, digital investment management or boutique portfolio
management, you may have a responsible person for compliance instead of a
dedicated compliance officer.

Requirement for head of compliance

(28) If you are licensed to carry on the regulated activity of dealing in securities
and you are an investment bank or a universal broker, you are required to
have a head of compliance. This person must not be involved in dealing in
securities. The head of compliance is responsible for overall supervision of
compliance with securities laws, regulations and guidelines, and any other
applicable law governing the regulated activities. In addition, such person
must be approved by the SC prior to undertaking the function as a head of
compliance.

(29) Where the regulated activities are carried on through a group of companies,
the function of the head of compliance can be centralised.

Requirement for responsible person for clearing for derivatives

(29A) If you are licensed to carry on the regulated activity of clearing for securities
or derivatives, you are required to have a responsible person for each of
the following functions:
(a) Risk management of the clearing activity; and
(b) Overall clearing business.

These persons are responsible in ensuring compliance with securities laws

and any other relevant guidelines. Such person must be approved by the
SC prior to undertaking the function as a responsible person.

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 Chapter 4: Licensing Criteria

Guidance to subparagraph 4.02(29A)

If you are already licensed to carry on the regulated activity of dealing in
derivatives and wish to continue with the clearing activity, you are required to
register a responsible person for risk management and a responsible person
for overall clearing business. These responsible persons shall not hold a CMSRL.

Requirement for minimum number of CMSRL holders

(30) You must have at least two CMSRL holders for each regulated activity at all
times. If the number of CMSRL holders falls below the minimum
requirement of two, you must take immediate steps to fill the position. If
you are licensed for dealing in unit trust products and/or dealing in private
retirement schemes, you must have at least two individuals who are
registered with FIMM at all times.

(31) If you are licensed as a boutique portfolio management company and if the
assets under management are RM300 million or less, you must have at
least one CMSRL holder at all times and that CMSRL holder must be a
substantial shareholder and/or director of the boutique portfolio
management company.

(32) A CMSRL holder may be licensed for more than one regulated activity,
provided he is fit and proper, and there is no conflict in him performing
such activities.

(33) Given the importance of the positions of head of regulated activity, head of
operations, compliance officer and head of compliance, you must ensure
that individuals appointed to these positions satisfy the requirements of
paragraph 4.06.

Guidance to applicants
You must always have adequate and competent personnel for conducting your
business efficiently, honestly and fairly, and with the integrity and professional
skills appropriate to the nature and scale of your activities.

Bumiputera directors, representatives and employees’ composition

(34) The composition of your board of directors, representatives and employees

must be in accordance with the national policy of Malaysia. The specific
requirements applicable to a CMSL holder operating as an investment bank
are set out in the Guidelines on Investment Banks. Therefore, the following
requirements regarding the Bumiputera director, representative and
employee composition do not apply to an investment bank.

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 Chapter 4: Licensing Criteria

Director

(35) You must at all times have a Bumiputera director on your board. However,
this requirement does not apply if you are–
• a special scheme broker, including a special scheme broker promoting
investments from the Middle East;
• a special scheme fund manager, including an Islamic fund
management company;
• a company which deals in derivatives;
• a company which is licensed for clearing for securities or derivatives;
• a digital investment management company, boutique portfolio
management company or an asset management company; or
• an approved insurance broker under section 11 of the Financial
Services Act 2013 (FSA) that deals in private retirement scheme or
approved takaful broker under section 11 of the Islamic FSA that deals
in private retirement scheme.

Representative

(36) You must at all times maintain at least 30% Bumiputera composition of
your representatives for your licensed activities. This requirement is not
applicable if you are a company which deals in derivatives, an Islamic fund
management company, a digital investment management company, a
boutique portfolio management company or an asset management
company.

(37) If you are licensed to deal in securities and you are a PO and employ
remisiers (commissioned representatives), you must maintain a minimum
of 15% Bumiputera composition of all your remisiers.

Illustration
A CMSL holder, who is licensed to carry on the regulated activities of dealing
in securities and dealing in derivatives, employs the following number of
licensed representatives:

Salaried CMSRL holders licensed to deal in securities 40

Commissioned CMSRL holders licensed to deal in securities 60
Total number of CMSRL holders licensed to deal in 100
securities
CMSRL holders licensed to deal in derivatives 20
Total number of CMSRL holders 120

Of the total 100 CMSRL holders licensed to deal in securities, at least 30 must
be Bumiputera. Of the 60 commissioned CMSRL holders licensed to deal in
securities, at least nine must be Bumiputera. However, the Bumiputera
representative composition does not apply to the 20 CMSRL holders licensed
to deal in derivatives.

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 Chapter 4: Licensing Criteria

Employee

(38) You must at all times maintain a Bumiputera composition of at least 30%
of your employees. However, this requirement does not apply if you are a
company which deals in derivatives, a digital investment management
company, a boutique portfolio management company, an asset
management company or approved insurance and takaful brokers that deal
in private retirement scheme or undertakes clearing for securities or
derivatives.

Readiness assessment

(39) A CMSL applicant may be required to undertake a readiness assessment by

completing and submitting a readiness checklist to the SC when applying
to be licensed for a regulated activity or to add on another regulated
activity.

(40) The readiness assessment may include, but not limited to, the applicant's
risk management system, capital adequacy, system security, organisational
structure, operational manuals, information technology, policies and
procedures, internal controls and systems, and procedures for compliance
with applicable laws and regulations.

Participants of exchange

(41) In the case of a CMSL applicant intending to become a participant of the

stock exchange, the derivative exchange or the clearing house for carrying
on any of the following regulated activities:

(a) Dealing in securities as a PO;

(b) Dealing in derivatives as a TP; or

(c) Clearing for securities or derivatives as a clearing participant,

the applicant must first submit its proposal to the SC for review and, upon
obtaining SC’s clearance, engage Bursa Malaysia with the view to satisfy
the additional requirements as set out under subparagraph 4.02(43).

(42) Notwithstanding the applicant may have satisfied the additional

requirements under subparagraph 4.02(43), the SC may conduct a further
assessment to ascertain the applicant’s readiness to carry on the regulated
activity as a PO, TP or clearing participant before the SC grants the licence.

(43) The applicant must have–

(a) undergone the readiness assessment conducted by Bursa Malaysia to

become a participant of the stock exchange, the derivative exchange
or the clearing house, as the case may be; and

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 Chapter 4: Licensing Criteria

(b) obtained an approval in principle from the following:

(i) Bursa Securities to become a PO;
(ii) Bursa Derivatives to become a TP;
(iii) Bursa Malaysia Securities Clearing Sdn Bhd to become a
clearing participant; or
(iv) Bursa Malaysia Derivatives Clearing Berhad to become a
clearing participant.

4.03 Shareholder composition

(1) Except for the shareholding requirement for investment banks which is a
minimum of 30% local shareholding, there are no other specific
shareholding requirements for the other regulated activities.

(2) If you carry on the regulated activity of fund management in relation to

portfolio management, you must also satisfy the following:
(a) You must be a "related corporation" of an entity regulated by the SC
or BNM or such other entities as may be approved by SC; or
(b) If you are a company owned by individuals, two of your shareholders
whose total shareholding forms the majority (51% or more) in the
company must have the requisite track record, as follows:
(i) Each of the two shareholders must have at least 10 years of
relevant experience in the capital market; and
(ii) At least one of the two shareholders must have five years of
direct experience in fund management in relation to portfolio
management activities.

Guidance to subparagraph 4.03(2)

This requirement is a continuing obligation and must be maintained even if
there are changes to your shareholders and/or your shareholding composition.

(2A) Subparagraph 4.03(2) is not applicable if you carry on the regulated activity
of fund management in relation to portfolio management as a digital
investment management company.

(3) If you are a stockbroking company that is not an investment bank–

(a) a person who wishes to acquire more than 51% of the total paid-up
capital of a PO must be a company or corporation with shareholders'
funds of not less than RM100 million; and
(b) no individual other than a Malaysian citizen, may hold up to 10% of
the total paid-up capital of a stockbroking company. The aggregate
total participation of individuals in the share capital of the
stockbroking company shall not be more than 49% of the total paid-
up capital.

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 Chapter 4: Licensing Criteria

Notification of other changes to shareholding

(4) For changes in shareholding composition or paid-up capital that does not
result in a change of controller, the Authorisation and Licensing Department
of the SC must be notified within 14 days of the occurrence of the event.

Guidance to investment banks

Any proposed change to your shareholding will be subject to the Guidelines on
Investment Banks.

4.04 Adequacy of financial resources

(1) You must satisfy the minimum financial requirements for a regulated
activity and any other requirements specified by the SC or the rules of a
stock exchange or a futures exchange.

(2) A CMSL holder, regardless of the type of regulated activity that it carries
out, must maintain at all times the applicable minimum financial thresholds
set out in Table 1.

(3) If you carry on more than one regulated activity, you will be subject to the
highest of the minimum financial requirements.

Table 1: Minimum Financial Requirements for a CMSL Holder

Regulated Activity Minimum Financial Requirement
Dealing in securities Investment bank (IB)
• Capital funds unimpaired by losses of RM2 billion
on a banking group basis, for investment banks
that are part of banking groups; or
• Capital funds of RM500 million, for investment
banks that are not part of banking groups; and
• Regulatory capital adequacy ratios and capital
requirements as determined by BNM.

Universal broker (UB)

• Paid-up capital of RM100 million;
• Shareholders' funds of RM100 million; and
• Capital adequacy ratio of 1.2 or any other
financial requirement as determined by the SC
from time to time.

Stockbroking company (other than IB or UB)

• Paid-up capital of RM20 million;
• Shareholders' funds of RM20 million; and

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 Chapter 4: Licensing Criteria

Regulated Activity Minimum Financial Requirement

Dealing in securities • Capital adequacy ratio of 1.2 or any other
financial requirement as determined by the SC
from time to time.

Dealing in unlisted debt securities

Advising on corporate finance (acting as a
principal adviser)
• Shareholders’ funds of RM100 million.

Dealing in securities restricted to listed

securities
• Paid-up capital of RM5 million;
• Shareholders’ funds of RM5 million; and
• Any capital adequacy or other financial
requirements as determined by the SC from time
to time, depending on the scale and complexity
of the business.

Dealing in unit trust products

(a) Companies wishing to deal in unit trust products
as a principal business (for own and/or third-
party products)
• Paid-up capital of RM5 million; and
• Shareholders’ funds of RM5 million.
Note: Such companies may use a nominee system.
(b) Companies that are licensed for the regulated
activity of financial planning and wish to deal in
unit trust products
• Paid-up capital of RM50,000; and
• Shareholders' funds of RM50,000.

Dealing in securities restricted to OTC bonds

• Paid-up capital of RM5 million; and
• Shareholders’ funds of RM5 million, depending
on the scale and complexity of the business.
Dealing in Trading participant (TP)
derivatives • Paid-up capital of RM5 million; and
• Adjusted net capital: The higher of
- RM500,000; or
- 10% of aggregate margins required.

TP with trading kiosks or branch offices

• Paid-up capital of RM10 million; and
• Adjusted net capital: The higher of
- RM500,000; or
- 10% of aggregate margins required.

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 Chapter 4: Licensing Criteria

Regulated Activity Minimum Financial Requirement

Dealing in TP and offering of CFD
derivatives • Paid-up capital of RM10 million;
• Shareholders’ funds of RM10 million; and
• Adjusted net capital: The higher of
- RM500,000; or
- 10% of aggregated margins required.

Offering of CFD only

• Paid-up capital of RM10 million;
• Shareholders’ funds of RM10 million; and
• 50% total shareholders’ funds in the form of
liquid capital.
Clearing for • Paid-up capital of RM10 million;
derivatives • Shareholders’ funds unimpaired by losses of
RM10 million; and
• Adjusted net capital: The higher of
- RM500,000; or
- 10% of aggregate margins required.
Fund management Portfolio management company
• Paid-up capital of RM2 million; and
• Shareholders’ funds of RM2 million.

Digital investment management company

• Paid-up capital of RM2 million; and
• Shareholders’ funds of RM2 million.

Boutique portfolio management company

• Paid-up capital of RM500,000; and
• Shareholders’ funds of RM500,000.

Trustee-manager for business trusts

• No specific financial requirements.

REIT manager
• Shareholders’ funds of RM1 million.

Advising on • Paid-up capital of RM500,000; and

corporate finance • Net tangible asset of RM50,000.
Investment advice

Financial planning • Paid-up capital of RM50,000; and

• Net tangible asset of RM50,000.

Dealing in private • Paid-up capital of RM5 million; and

retirement schemes • Shareholders' funds of RM5 million.

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 Chapter 4: Licensing Criteria

Regulated Activity Minimum Financial Requirement

Holders of a CMSL for financial planning only
• Paid-up capital of RM50,000; and
• Shareholders’ funds of RM50,000.

Insurance and takaful brokers only

• Paid-up capital of RM750,000;
• Shareholders’ funds of RM750,000; and
• Professional indemnity insurance of RM750,000.

Note: Companies licensed for dealing in private

retirement schemes may not use a nominee system.

Illustration
If you apply for a CMSL to carry on the regulated activities of fund management
and investment advice, the following minimum financial requirements are
relevant:

For fund management in relation to portfolio management

• Paid-up capital of RM2 million; and
• Shareholders' funds of RM2 million.

For investment advice

• Paid-up capital of RM500,000; and
• Net tangible assets of RM50,000.

The highest of the minimum financial requirements will apply to you, and this
means that you must have a paid-up capital of at least RM2 million.

Once licensed, you must maintain the minimum financial requirements

throughout your licence term. Therefore, your paid-up capital and
shareholders' funds must be maintained at a minimum of RM2 million
respectively while you hold the licence.

(4) If your financial position falls below any of the applicable minimum financial
requirements, you must not continue to carry on the regulated activity
without the written consent of the SC. You must immediately notify the SC
in writing of a potential or an actual breach of the minimum financial
requirements and the corrective measures intended to be taken.

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 Chapter 4: Licensing Criteria

Clearance on loans and credit facilities

(5) If you intend to carry on the regulated activity of fund management and
are a company owned by individuals, you are required to ensure that your
shareholders, directors and licensed representatives provide the SC with a
declaration that they have satisfactorily maintained their accounts, loans
and other credit facilities extended by banks and financial institutions within
or outside Malaysia.

(6) The declaration is to be in a format specified by the SC. The SC reserves

the right to verify the information provided.

4.05 What are the requirements for a CMSRL?

General requirements

(1) You must be at least 21 years old.

(2) You must be fit and proper and satisfy yourself that none of the grounds
specified under subsection 65(1) of the CMSA apply to you.

(3) You must provide all relevant information to your principal to enable it to
undertake the necessary due diligence before supporting your application.
This is to ensure that you have satisfied the minimum requirements for
carrying on the regulated activity.

Qualification and experience requirement

(4) In assessing your competency to carry on a regulated activity, we will

consider your educational and professional background. If your academic
or professional qualification is lacking, we will consider your work
experience and previous track records.

Licensing examinations

(5) In addition to the qualification and experience requirements, you must also
pass the relevant modules of the SCLE as set out in Table 3.

Validity of the licensing examinations

(6) Your examination result is valid for two years from the date of passing each
module of the SCLE. You must ensure that your examination results are
valid at the time of your application.

(7) There are three instances in which we will not apply the general rule on
validity of the licensing examinations. These are as follows:

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 Chapter 4: Licensing Criteria

(a) You have passed the SCLE while under the employment of a CMSL
holder and remain working in the capital markets industry. You may
apply for a CMSRL without having to resit the SCLE;
(b) You have passed the SCLE while under the employment of a CMSL
holder, and you resign to take up employment outside the industry
before being licensed. If you return to the industry, you may apply
for a CMSRL without having to resit the SCLE, provided your
application is made within three years from the date you leave the
industry; and
(c) You were previously licensed and have left the industry. You may
reapply for a CMSRL to undertake the same regulated activity for
which you were previously licensed without having to resit the SCLE,
provided your application is made within three years from the date
you leave the industry.

Table 2: Minimum Qualification and Experience Requirements for a CMSRL

Applicant
Regulated Activity Minimum Qualification and Experience
Requirement
Dealing in • A degree or professional qualification from an
securities institution recognised by the Government of
Malaysia;
Dealing in
• A diploma in the relevant field of study, including
derivatives
finance, economics, accounting, or commerce from
an institution recognised by the Government of
Malaysia; or
• A diploma in other field of study recognised by the
Government of Malaysia with at least two years of
relevant experience in the capital market.

In exceptional circumstances, the SC may consider an

applicant-

• with Sijil Pelajaran Malaysia (SPM) / Malaysia

Certificate of Education or its equivalent with at least
four years of relevant experience in the capital
market; or
• without any of the above qualifications but has been
licensed for at least three years in a recognised
jurisdiction to undertake dealing in securities or
dealing in derivatives. The applicant must have at
least five years direct and relevant experience in the
capital market.

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 Chapter 4: Licensing Criteria

Regulated Activity Minimum Qualification and Experience

Requirement
Dual licence • Applicant must be a CMSRL holder for dealing in
arrangement – securities for at least two years; and
Dealing in both • Applicant must complete and pass the Certified
securities and Capital Market Professional: Dealing in Derivatives
derivatives for Dealer’s Representatives programme.
Fund management • A degree or professional qualification from an
in relation to institution recognised by the government of
portfolio Malaysia with at least two years of relevant
management experience in fund management in relation to
(including digital portfolio management activity; or
investment
• Applicants without any degree or professional
management and
qualification must have at least five years of
boutique portfolio
relevant experience in fund management in relation
management
to portfolio management activity.
company)

Fund management • No specific qualification requirements.

in relation to asset
management
Advising on • A degree or professional qualification from an
corporate finance institution recognised by the government of
Investment advice Malaysia; or
• Applicants without any degree or professional
qualification must have at least five years of
relevant experience in the regulated activity.
Financial planning Financial Planning Association of Malaysia (FPAM)
• The Certified Financial Planner (CFP) / Islamic
Financial Planner (IFP) qualification and a member
of FPAM; or

• Complete a minimum of three modules (either CFP

or IFP) as stipulated below and become an
Associate Member of FPAM;

CFP IFP
Module 1: Foundation in Module 1: Fundamentals
Financial Planning of Islamic Financial
Planning
Module 3: Investment Module 3: Islamic
Planning and Retirement Investment Planning
Planning

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 Chapter 4: Licensing Criteria

Regulated Activity Minimum Qualification and Experience

Requirement
Financial planning Module 4: Financial Module 4: Financial Plan
Plan Construction and Construction and
Professional Professional
responsibilities (attend Responsibilities (attend
the familiarisation the familiarisation
programme) programme)

OR

Malaysian Financial Planning Council (MFPC)

• The Registered Financial Planner (RFP) / Shariah
Registered Financial Planner (Shariah RFP)
qualification and an ordinary member of MFPC; or
• Complete a minimum of three modules (either RFP
or Shariah RFP) as stipulated below, obtain a
Certificate of Proficiency in Financial Planning and
become an Associate Member of MFPC;

RFP Shariah RFP

Module 1: Fundamentals Module 1: Fundamentals
of Financial Planning of Shariah Financial
Planning
RFP Shariah RFP
Module 3: Investment Module 3: Shariah
Planning Investment Planning
Module 6: Retirement Module 6: Retirement
Planning Planning

OR

Malaysia Financial Planners and Advisers Association

(MFPAA) [formerly known as Malaysian Association of
Chartered Financial Consultant (MAChFC)]
• The Chartered Financial Consultant (ChFC)
qualification and a member of the MFPAA (formerly
known as MAChFC).

Table 3: Licensing Examinations for a CMSRL Applicant

Regulated Activity Licensing Examination
Dealing in Dealing in securities
securities • Applicants must pass Modules 6 and 7 or 6 and 18
or 7 and 17 or 17 and 18 of the SCLE.

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 Chapter 4: Licensing Criteria

Regulated Activity Licensing Examination

• CFA charterholders are exempted from Module 7 of
the SCLE.
Dealing in unlisted debt securities / OTC bonds
• Applicants for a CMSRL for a dealing in securities
restricted to unlisted debt securities / OTC bonds
must be certified by FMAM.
Dealing in • Applicants must pass Modules 14 and 16 or 17 and
derivatives 18 or 14 and 17 or 16 and 18 of the SCLE.
• CFA charter holders are exempted from Module 14
of the SCLE, subject to attending the SCLE Revision
Course for Module 14.
Fund management • Applicants must pass Modules 9 and 10 of the SCLE.
in relation to • CFA charter holders are exempted from Module 10
portfolio of the SCLE.
management
(including digital
investment
management and
boutique portfolio
management)
Fund • No specific licensing examinations required.
management in
relation to asset
management
Advising on • Applicants must pass Modules 12 and 19 or 12, 19A
corporate finance and 19B of the SCLE.
• CFA charter holders are exempted from Module 12
of the SCLE.
Investment • Applicants must pass Modules 12 and 19 or 12 and
advice 19A of the SCLE.
• CFA charter holders are exempted from Module 12
of the SCLE.
Financial planning • No specific licensing examinations required.

Exemption from the licensing examinations

(8) You may apply for exemption from the relevant modules of the SCLE if you
are an individual with distinguished service, which includes having–
(a) a total of at least 20 years of work experience;
(b) spent at least 10 years in the capital market or the financial services
industry or in a regulatory body which regulates the capital market or
the financial services industry and you were directly involved in the
specific area in which you seek exemption; and

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 Chapter 4: Licensing Criteria

(c) held a senior management position during your tenure in the capital
market or the financial services industry or in the regulatory body.

Dual licence arrangements

(9) You will only be considered to carry on both dealing in securities and
dealing in derivatives if–
(a) your principal is licensed for both dealing in securities and dealing in
derivatives as allowed under the policy on permitted activities for
stockbroking companies; or
(b) the sponsoring CMSL holder carrying on dealing in derivatives is–
(i) a subsidiary of the holding company of your principal; or
(ii) a separately incorporated company held by the individual
shareholders of your principal.

(10) The sponsoring CMSL holder must be approved by the SC to enter into an
arrangement with your principal to facilitate the carrying on of dealing in
derivatives. In this case, you will be operating under a dual principal
arrangement which requires you to hold separate CMSRL for dealing in
securities and dealing in derivatives respectively.

4.06 What are the requirements for key management of a CMSL holder and
compliance officer?

General requirements

(1) If you are a candidate for a key management position or compliance officer,
you must be at least 21 years old. For purposes of clarity, "key
management" refers to the head of regulated activity, head of operations
and head of compliance.

(2) You must be fit and proper, and satisfy yourself that none of the grounds
specified under subsection 65(1) of the CMSA applies to you.

(3) The CMSL holder to whom you are employed with or attached to, must
undertake the necessary due diligence to ensure minimum requirements
are satisfied.

Prior approval

(4) You must obtain the SC's prior approval before being appointed as a key
management personnel or a compliance officer.

(5) If any key management personnel or compliance officer position becomes

vacant, the CMSL holder is expected to take the necessary steps to fill the
position within three months from the date of the vacancy.

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 Chapter 4: Licensing Criteria

Qualification and experience requirements

(6) A licensed director and head of regulated activity are required to hold a
CMSRL. Table 2 sets out the qualification and experience requirements for
obtaining a CMSRL, according to the type of regulated activity. A CMSL
holder must ensure that the candidate appointed as a licensed director or
head of regulated activity has a minimum of 10 years and eight years of
relevant experience, respectively.

If you are a CMSL holder for fund management in relation to asset

management, your director must show the relevant experience and
knowledge in the management of the specific assets invested in by the
asset manager, or in the management of a class of asset in a unit trust
scheme.

(7) The candidate for head of operations, head of compliance and compliance
officer will also be expected to possess relevant and adequate experience
in carrying out the respective functions. Table 4 sets out the minimum
qualification and experience requirements for the head of operations, head
of compliance and compliance officer.

(8) In addition to the above, a candidate is also expected to have an adequate

level of knowledge about developments in the market, products and
regulation and possess skills and technical know-how. The candidate for
licensed director and head of regulated activity must pass the relevant
modules as set out in Table 3. The candidate for head of operations, head
of compliance and compliance officer must pass the relevant modules as
set out in Table 5.

Table 4: Minimum Qualification and Experience Requirements for Key

Management and Compliance Officer
Position Minimum Qualification and Experience
Requirement
Head of A candidate must possess any of the following experience:
operations • Employed at a senior management position for a
minimum of two years by a CMSL holder carrying in
dealing in securities;
• Relevant work experience for a minimum of five years
at level of middle management of an institution in the
capital market; or
• Previously a participant of a recognised exchange.

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 Chapter 4: Licensing Criteria

Position Minimum Qualification and Experience

Requirement
Head of A candidate must possess–
compliance • a degree or professional qualification from an
institution recognised by the government of Malaysia;
and
• at least three years of direct experience as a
compliance officer in the capital market; or
• at least five years of relevant experience in the capital
market; or
• a relevant diploma from an institution recognized by
the government of Malaysia and has at least eight
years of relevant experience in the capital market.
Compliance A candidate must possess–
officer • a degree or professional qualification from an
institution recognised by the government of Malaysia
with at least three years of relevant experience in the
capital market; or
• a relevant diploma from an institution recognised by
the government of Malaysia with at least five years of
relevant experience in the capital market.
Compliance A candidate must possess–
officer for • a degree or professional qualification from an
companies that institution recognised by the government of Malaysia;
have a head of or
compliance
• a relevant diploma from an institution recognised by
the government of Malaysia with at least three years
of relevant experience in the capital market.
Head of Candidates must pass Modules 6 and 7 or 6 and 18 or 7
operations and 17 or 17 and 18 of the SCLE.

Table 5: Licensing Examinations for Key Management and Compliance Officer

Position Licensing Examination
Head of Candidates must pass Module 11 of the SCLE and the
compliance and relevant modules as determined by the regulated activities
compliance of his principal:
officer
Dealing in securities
• Modules 6 and 7 or 6 and 18 or 7 and 17 or 17 and 18
of the SCLE;
OR

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 Chapter 4: Licensing Criteria

• Attend the SCLE Revision Courses on the relevant

modules which the applicant will be responsible with
regard to compliance.

Dealing in derivatives
• Modules 14 and 16 or 17 and 18 or 14 and 17 or 16
and 18 of the SCLE;
OR
• Attend the SCLE Revision Courses on the relevant
modules which the applicant will be responsible with
regard to compliance.

Clearing for derivatives

• Complete the familiarisation programme.

Fund Management in relation to portfolio

management
• Modules 9 and 10 of the SCLE;
OR
• Attend the SCLE Revision Courses on the relevant
modules which the applicant will be responsible with
regard to compliance.

Guidance to applicants
Interview
• Where necessary, the SC may require applicants for a CMSL or CMSRL or
key management appointment to attend an interview to demonstrate
credibility and knowledge in their regulated activities.

Exemption or variation of requirement

The SC may, where it deems appropriate, allow exemption or variation from
any requirement based on the merits of the case, whether on a permanent
basis or for a specified period of time.

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 Chapter 5: Licensing Criteria for an Individual Applying for a CMSL to Carry on Financial Planning

Chapter 5

LICENSING CRITERIA FOR AN INDIVIDUAL APPLYING FOR A CMSL TO

CARRY ON FINANCIAL PLANNING

5.01 General

(1) A CMSL is issued only to a company. However, in the case of financial

planning, a CMSL may be issued to an individual who is fit and proper, as
set out in section 64 of the CMSA and complies with the following criteria
set out below.

General requirements

(2) You must be at least 21 years old.

(3) Unless otherwise approved, you must have your business registered with
the Companies Commission of Malaysia.

(4) You must at all times have net total personal assets (net worth) of at least
RM50,000 or its equivalent in foreign currencies.

(5) You must be a resident of Malaysia.

(6) You must also complete and submit a readiness checklist to us, which may
include your operational manuals, information technology, policies and
procedures, internal controls and systems and procedures for compliance
with applicable laws and regulations. We reserve the right to conduct a
readiness examination to ascertain if you are ready to commence your
business.

Qualification and experience requirements

(7) In assessing your competency, we will consider your educational and

professional background, work experience and previous track record. Table
6 sets out the minimum qualification and experience requirements for an
individual CMSL applicant.

Table 6: Minimum Qualification and Experience Requirements for Individual

CMSL Applicants for Financial Planning
Regulated Minimum Qualification and Experience Requirement
Activity
Financial Financial Planning Association of Malaysia (FPAM)
planning
• The Certified Financial Planner (CFP) / Islamic Financial
Planner (IFP) qualification and a member of FPAM; or

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 Chapter 5: Licensing Criteria for an Individual Applying for a CMSL to Carry on Financial Planning

Regulated Minimum Qualification and Experience Requirement

Activity
• Complete a minimum of three modules (either CFP or IFP)
as stipulated below and become an Associate Member of
FPAM;

CFP IFP
Module 1: Foundation in Module 1: Fundamentals of
Financial Planning Islamic Financial Planning
Module 3: Investment Module 3: Islamic
Planning and Retirement Investment Planning
Planning
Module 4: Financial Plan Module 4: Financial Plan
Construction and Construction and
Professional responsibilities Professional
(attend the familiarisation Responsibilities (attend the
programme) familiarisation programme)

OR

Malaysian Financial Planning Council (MFPC)

• The Registered Financial Planner (RFP) / Shariah
Registered Financial Planner (Shariah RFP) qualification
and an ordinary member of MFPC; or
• Complete a minimum of three modules (either RFP or
Shariah RFP) as stipulated below, obtain a Certificate of
Proficiency in Financial Planning and become an Associate
Member of MFPC;

RFP Shariah RFP

Module 1: Fundamentals of Module 1: Fundamentals of
Financial Planning Shariah Financial Planning
Module 3: Investment Module 3: Shariah
Planning Investment Planning
Module 6: Retirement Module 6: Retirement
Planning Planning

OR

Malaysia Financial Planners and Advisers Association (MFPAA)

[formerly known as Malaysian Association of Chartered
Financial Consultant (MAChFC)]
• The Chartered Financial Consultant (ChFC) qualification
and a member of the Malaysian Association of Chartered
Financial Consultant (MAChFC); and
• the applicant must have a minimum of eight years of
relevant experience in financial planning.

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 Chapter 5: Licensing Criteria for an Individual Applying for a CMSL to Carry on Financial Planning

Regulated Minimum Qualification and Experience Requirement

Activity
Guidance to applicants
• Unless specifically mentioned, the requirements set out under Chapter 4
will not apply to you.
• As an individual CMSL holder, you cannot have any licensed representative
to act on your behalf.
• If your business is carried out through a partnership, only the licensed
partner can carry on financial planning.

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 Chapter 6: Application Procedures and Fees

Chapter 6

APPLICATION PROCEDURES AND FEES

6.01 General

(1) This chapter will provide you with information on–

• forms to be used for various applications and notifications;

• application procedures;

• fees to pay for applications or notifications; and

• timelines to adhere to as licensed persons.

(2) Any person who furnishes to the SC, directly or indirectly, any statement,
information or document (collectively referred to as “representation”), by
whatever means or in any form, must ensure that the representation is not
false, misleading or contains any omission resulting in the representation
being misleading. Breach of this requirement can result in enforcement
action under the securities laws. For the avoidance of doubt, this
requirement includes any clarification or additional representation
submitted to the SC.

(3) The SC must be immediately informed of—

(a) any change or development in circumstances and information that may
impact the application subsequent to the submission of the application;
and
(b) any change or development in circumstances and information relating
to an application occurring subsequent to the SC giving its approval.

6.02 What is the Electronic Application System (EASy)?

(1) All licensing applications, except for applications for a new CMSL and
submission of Fit and Proper Compliance Report (Form 6A), are to be made
online to the SC via EASy. As licensed persons, you must familiarise
yourselves with the system. Further information on EASy can be found in
Appendix 2.

(2) When submitting an application or notification to the SC through EASy, you

must ensure that all forms are printed out and duly signed by the relevant
persons as indicated in the forms. The particulars on your printed copy
must be the same in content as that which you will submit through EASy.

(3) Application results will be released via email generated through the system,
including under circumstances where we have grounds for a refusal to grant
a licence.

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 Chapter 6: Application Procedures and Fees

(4) As a CMSL holder, you must apply to the SC for access to EASy within three
months from the date you obtain your licence. This is necessary because
specific applications and notifications to us, including the appointment of
directors, chief executives and notification of any material change to
information submitted earlier, must be made through EASy.

(5) You must maintain at all times sufficient funds (deductible balance) in your
EASy account to facilitate payments for submissions made to the SC and to
enable auto-deductions for recurring licence fees.

6.03 What is our commitment?

(1) In reviewing your licence application, the Authorisation and Licensing

Department of the SC will comply with our client charter which is ISO
9001:2015 certified.

(2) We are committed to satisfy all market participants by providing quality,

professional and excellent service through a transparent process in a timely
manner, and to strive for continuous improvement.

(3) Our client charter for processing time is as follows:

(a) Six weeks for new CMSL applications which are complete upon
submission and meet the SC’s fit and proper criteria; and
(b) Two weeks for all new CMSRL applications which are complete upon
submission and meet the SC’s fit and proper criteria.

6.04 How to apply for a new licence?

(1) Upon satisfying relevant requirements as set out in Chapter 4 or 5, you

must fill the relevant forms outlined in Table 7 to apply for a CMSL or CMSRL
to carry on any one or more regulated activities. You can refer to Appendix
3 for the list of documents which must accompany your applications.

(1A) Where necessary, the SC may request for other relevant or additional
information and materials to be submitted.

(2) CMSL applicants must submit the relevant information and all required
documents in both hard and soft copy versions (USB flash drive), together
with the fees – in the form of cheques, bank drafts or postal/money orders,
made payable to the “Securities Commission Malaysia” – to the address
stated in paragraph 8 of Appendix 2.

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 Chapter 6: Application Procedures and Fees

Table 7: Forms for New Licences

Type of Licence Forms
CMSL Form 1: Application for New Capital Markets Services
Licence
Form 1E: Application for New Capital Markets Services
Licence – Individual Appointment / Profile of Individual
Shareholder
(director / licensed director / chief executive / key
management / compliance officer / responsible person /
company secretary / representative / individual
shareholder)
CMSL Form 2: Application for New Capital Markets Services
(Individual) Licence (Individual)
CMSRL Form 3: Application for New Capital Markets Services
(only applicable Representative’s Licence
to subsequent
applications
through EASy)

(3) If you apply for a new CMSL, you must also submit at least two applications
for a CMSRL for every regulated activity you intend to carry on as a
principal.

(4) Upon receiving your application for a new CMSL, we may conduct the
necessary background checks on you, your directors, managers, and
controllers to ensure that none of the grounds for refusal of a licence as
provided for under section 64 of the CMSA applies.

(5) If you apply for a new CMSRL with an existing CMSL holder, such
application must be made via EASy through your principal, who must be
responsible for verifying your good character, reputation and competency.

(6) Upon our approval, details of your new licence will be published on the SC
website under the public register of licence holder at
www.sc.com.my/regulation/licensing/licensed-and-registered-persons.

(7) With effect from 1 January 2015, the SC no longer issues a physical licence.
All licensed persons who hold the physical licences that have been issued
prior to this date must return their physical licences to the SC upon
variation, revocation or cessation of their regulated activities.

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 Chapter 6: Application Procedures and Fees

Guidance to applicants
Before you apply for a CMSL, you must make sure that you–
• know your business and understand which regulated activity you need
to apply for to enable you to carry on your business;
• understand the obligations of a CMSL holder and have appropriate
systems and processes in place to meet them; and
• are able to support your application with any document we may
request.

You should only apply for the regulated activity that is relevant to your
business. Do not apply for a regulated activity just in case you might want to
do it in the future. If your business changes, you can apply to vary your licence
at that time. Paragraph 6.06 explains how to apply to vary your licence.

6.05 Submission of Anniversary Reporting for Authorisation of Activity

(ARAA)

(1) CMSL holders are required to submit the ARAA report to the SC within seven
business days before or on the anniversary date of their licences. The ARAA
report is represented by Forms 4 and 5.

Table 8: Forms for Anniversary Reporting

Type of Licence Form
CMSL Form 4: Anniversary Reporting for Authorisation of Activity
(CMSL)
CMSL Form 5: Anniversary Reporting for Authorisation of Activity
(Individual) (Individual)

(2) If you are an individual CMSL holder that wishes to continue to be licensed,
you must satisfy the Continuing Professional Education (CPE) requirement
before submitting your ARAA.

(3) Similarly, for a CMSRL holder that wishes to continue to be licensed, you
must satisfy the CPE requirement before the anniversary date of your
licence.

(4) A CMSL holder must ensure that its EASy account has adequate funds
before it submits ARAA through the system. The licence fees will be
deducted from the EASy account on the anniversary date of the company
and its representatives.

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6.05A Submission of Fit and Proper Compliance Report (Form 6A)

(1) All CMSL holders are also required to submit a semi-annual Form 6A on the
fit and proper standing of its licensed representatives whose anniversary
date fall due within the reporting period. Such report needs to be submitted
via the ComRep platform within seven business days from the end of the
reporting period.

6.06 How to vary a licence?

(1) If you add or reduce any regulated activity under your CMSL or CMSRL, or
you wish to change your principal, you will need to complete the relevant
form(s) set out in Table 9.

(2) Your applications to add or reduce your regulated activity and your
applications for variation of your principal, are to be submitted through
EASy.

(3) [Deleted]

Table 9: Forms for Variation of Regulated Activity and Variation of Principal

Type of Licence Form
CMSL Form 7: Application for Variation of Regulated Activity for
Capital Markets Services Licence Holder
CMSRL Form 8: Application for Variation of Regulated Activity for
Representative
Form 9: Application for Variation of Principal by
Representative

Guidance to stockbroking companies and investment banks

Your ability to add on any additional regulated activity to your CMSL is subject
to the policy on permitted activities for stockbroking companies and the
Guidelines on Investment Banks.

(4) Upon our approval, a new licence reflecting your new regulated activity or
principal will be made available on the SC’s public register of licence holder
at www.sc.com.my/regulation/licensing/licensed-and-registered-persons.
The anniversary date of the new licence will be the same as that of your
existing licence.

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Illustration
Existing licence
Type of regulated activity: Dealing in securities
• Anniversary date of licence: 1 December 2011
• Proposed additional regulated activity: Dealing in derivatives
• Application to add new regulated activity approved by the SC: 1
November 2011
New licence
Type of regulated activity: Dealing in securities and dealing in derivatives
• Anniversary date of new licence: 1 December 2011.

6.07 How much is the application and licence fee?

(1) If you are a CMSL holder that is a company, the annual licence fee payable
is–
(a) for any first regulated activity, RM2,000; and
(b) for any subsequent additional regulated activity, RM1,000 each.

If you carry on more than one regulated activity, the licence fees payable
will be the aggregate amount.

Illustration
If you are a CSML holder that conducts the following activities:
• Dealing in securities: This is the first regulated activity, therefore
the licence fee is RM2,000 per annum.

• Dealing in derivatives; and The licence fee for these two

activities is RM1,000 each per
annum.
• Advising on corporate finance,

you are required to pay RM4,000 per annum to carry on the regulated activities
above.

(2) If you are a CMSL holder that is an individual licensed to carry on financial
planning activity, the annual licence fee payable is RM1,000.

(3) If you are a CMSRL holder, the annual licence fee payable is RM200,
regardless of the number of regulated activities you carry on for your
principal.

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Illustration 1
If you are a CMSRL holder that conducts the following activities:
• Dealing in securities; and
• Dealing in derivatives

You are required to pay RM200 per annum.

Illustration 2
You are a CMSL holder that is licensed for dealing in securities. You decide to
expand your business to include a new regulated activity of dealing in
derivatives. Assume your current licence anniversary date is on 31 January
2012 and your company's application to carry on dealing in derivatives was
approved by the SC on 1 November 2011.

The computation of fees for the new regulated activity on a pro-rated basis:
= 1 November 2011 to 31 January 2012 = 3 months
= RM1000 x 3/12
= RM250

6.08 How to withdraw an application?

(1) You may withdraw an application submitted via EASy if the status is
“Review in Progress”. You will be required to provide an explanation of
withdrawal in the system. There will be no refund of application fees for all
submissions made to the SC.

(2) Similarly, for the withdrawal of applications submitted manually, your

application fees will not be refunded.

6.09 What information requires a notification to the SC after being licensed?

(1) The SC maintains a public, searchable register of current licence holders as

required under section 77 of the CMSA. After you have received your CMSL
and CMSRL, you are obliged to notify us of such information as required
under section 78 of the CMSA.

(2) There are some changes that require our prior approval while other changes
only require you notifying us after the change has taken place.

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Changes that require prior approval

(3) Changes that require our prior approval are stated in Table 10. Such
changes must be lodged through EASy (you can refer to Table 10 for type
of changes and relevant forms required).

Table 10: Changes Requiring Prior Approval

CMSL
Variation of regulated Form 7: Application for Variation of Regulated
activity Activity for Capital Markets Services Licence
Holder
Change of name Form 10: Application for Change of Entity's Name
* After obtaining the SC’s approval for the
application made under Form 10, you must
reflect the effective changes(s) in your EASy
account and submit the relevant supporting
material(s), as specified in Appendix 3, via the
system within 14 days of the change occurring.
Form 11: Application for Change of Individual’s
Business Name
* After obtaining the SC’s approval for the
application made under Form 11, you must
reflect the effective changes(s) in your EASy
account and submit the relevant supporting
material(s), as specified in Appendix 3, via the
system within 14 days of the change occurring.
Change of shareholders Form 12: Application for Change of Shareholders/
/ shareholding structure Shareholdings
which results in a * After obtaining the SC’s approval for the
change of controller application made under Form 12, you must
submit Form 13 and, if applicable, Form 32
within 14 days of the change occurring.
Application for [Deleted]
compliance officer

Application for Form 26: Application for Establishment of New

establishment of new Business or Acquisition of Shares / Interests in or
business or acquisition Outside Malaysia
of shares / interests in * After obtaining the SC’s approval for the
or outside Malaysia (for application made under Form 26, you must
capital market-based reflect the effective changes(s) in your EASy
activities) account and submit the relevant supporting
material(s), as specified in Appendix 3, via the
system within 14 days of the change occurring.

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CMSL
Application for Form 33: Application for Appointment of Licensed
appointment of– Director / Chief Executive / Key Management /
• licensed director Compliance Officer
• chief executive * After obtaining the SC’s approval for the
• head of regulated application made under Form 33, you must
activity submit Form 14 within 14 days of the change
• head of operations occurring.
• head of compliance
• compliance officer
CMSRL
Variation of regulated Form 8: Application for Variation of Regulated
activity Activity for Representative
Variation of principal Form 9: Application for Variation of Principal by
Representative

Changes that require notification

(4) As licensed persons, you must notify the SC of the particulars stated in
Table 11. This notification must be made within 14 days of the occurrence
of the event. However, in the case of your directors, you must notify us
within two business days of their appointment or reappointment or prior
to any public announcement, whichever is earlier.

(5) For any resignation of director / licensed director / chief executive / key
management / compliance officer / responsible person, the company must
inform the SC immediately via email to the Head of Authorisation and
Licensing Department followed by submission of the relevant forms.

Table 11: Changes Requiring Notification

CMSL
Change in shareholders / Form 13: Notice of Change of Shareholders /
shareholding details Shareholdings
* To be accompanied by Form 32, if applicable.
Appointment of– Form 14: Notice of Appointment of Director /
• director Licensed Director / Chief Executive / Key
• licensed director Management / Compliance Officer /
• chief executive Responsible Person / Company Secretary
• head of regulated
activity
• head of operations
• head of compliance
• compliance officer
• responsible person
• company secretary

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CMSL
Change of designation for– Form 14: Notice of Appointment of Director /
• director Licensed Director / Chief Executive / Key
• head of regulated Management / Compliance Officer /
activity Responsible Person / Company Secretary
• head of operations
• head of compliance
Change of entity’s Notice of Change in Entity’s Particulars
particulars: (Formerly Form 15: Notice of Change in
• Name of CMSL holder Company’s Particulars)
• Registered address * You must reflect the effective change(s) in
• Business address your EASy account and submit the relevant
• Correspondence supporting material(s), as specified in
address Appendix 3, via the system within 14 days of
• New branch / EAF / the change occurring.
trading kiosk
** To notify the SC by way of formal letter
• Branch / EAF / trading
within 14 days of the change occurring.
kiosk / closure
• Establishment of new
business or
acquisition of shares /
interests in or outside
Malaysia (for capital
market-based
activities)**
• Establishment of new
business or
acquisition of shares /
interests in or outside
Malaysia (for non-
capital market-based
activities)**
• Disposal of business
or shares / interests
in or outside Malaysia
including closure of
business**
Change of individual's Notice of Change in Individual's Particulars
particulars: (Formerly Form 16: Notice of Change in
• Name of CMSL Individual's Particulars)
(Individual) holder * You must reflect the effective change(s) in
• Business address your EASy account and submit the relevant
• Correspondence supporting material(s), as specified in
address Appendix 3, via the system within 14 days of
the change occurring.

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CMSL
Cessation of CMSL / CMSL Form 18: Notice of Cessation of Capital Markets
(individual) Services Licence
Form 19: Notice of Cessation of Capital Markets
Services Licence (Individual)
Cessation of director / Form 21: Notice of Cessation of Director / Chief
chief executive / key Executive / Key Management / Compliance
management / compliance Officer / Responsible Person / Company
officer / responsible Secretary
person / company
secretary
Cessation of compliance [Deleted]
officer
Change of representative's Notice of Change in Representative's Particulars
particulars: (Formerly Form 17: Notice of Change in
• Name Representative's Particulars)
• Residential address * You must reflect the effective change(s) in
• Location your EASy account and submit the relevant
• Passport number (for supporting relevant supporting material(s), as
non-Malaysian) specified in Appendix 3, via the system within
• Remuneration type 14 days of the change occurring.

Cessation of CMSRL Form 20: Notice of Cessation of Capital Markets

Services Representative's Licence
General
Place at which register of Form 22: Notice of Place at Which Register of
securities is to be kept for Securities is to be Kept
CMSL / CMSRL * Note that this form is not relevant if a licensed
person had already provided the information
in an earlier application to the SC, e.g. in
Form 1 or 3 when applying for a new licence.

Cessation / Change of Form 23: Notice of Change of Place or Cessation

place at which register of of Keeping of Register of Securities
securities is to * Note that this form is not relevant if a licensed
be kept for CMSL / CMSRL person had already provided the information
in an earlier application to the SC, e.g. in
Form 18, 19 or 20 when notifying the SC on
cessation of business or in Form 9 when
applying for variation of principal.

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6.10 What other submissions can be made through EASy?

(1) You may also lodge the auditor's report as required under section 127 of
the CMSA through EASy.

(2) We may, from time to time, add new categories of submissions to be

included under EASy.

6.11 A CMSL holder seeking for an extension of time to comply with any licensing
requirements and conditions must submit an application with accompanying
justifications and relevant supporting materials to the Head of Authorisation and
Licensing Department at least 14 days prior to the expiry of the stipulated time
frame for the SC's consideration.

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 Chapter 7: Conditions and Restrictions of Licence

Chapter 7

CONDITIONS AND RESTRICTIONS OF LICENCE

7.01 General

(1) The SC may grant a licence subject to such conditions or restrictions as it

thinks fit under section 61 of the CMSA. This chapter sets out the general
conditions or restrictions applicable to a CMSL and CMSRL granted by the
SC. A licensed person must comply with these conditions and restrictions
as long as the CMSL and the CMSRL remain valid. The SC may also impose
other conditions or restrictions on a licensed person at the time of granting
a CMSL or a CMSRL to an applicant.

(2) If a licensed person contravenes or fails to comply with any condition or

restriction, the SC is empowered under the CMSA to initiate and administer
a broad range of actions against the licensed person under Part XI of the
CMSA.

7.02 What are the conditions and restrictions in relation to a CMSL holder?

General conditions and restrictions

You must satisfy the following:

(1) Remain fit and proper at all times as set out in section 64 of the CMSA.

(2) Comply with the requirements set out in Chapter 4 or 5 (where applicable)
and 6 of this handbook.

(3) Comply with securities laws, its regulations and guidelines and any other
applicable law that may govern the business activities carried on by you.

(4) Obtain the SC's prior approval if there are any changes to your core business
which you are licensed to carry on.

(5) If you are a company, you are required to notify the SC of any change to
your shareholding, paid-up capital, any establishment of a new business or
acquisition of shares/interests in or outside Malaysia (for capital market-
based activities and non-capital market-based activities) and disposal of
business or shares/interests in or outside Malaysia within 14 days of the
change. Where a change in your shareholding, directly or indirectly results
in a change of your controller and there is a proposal for the establishment
of a new business or acquisition of shares/interests in or outside Malaysia
in relation to capital market-based activities, you require the SC's prior
approval for such change.

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(5A) A CMSL holder must notify the SC where there is an occurrence of any event
which would trigger the activation or execution of the business continuity
plan, in such form and manner as may be specified by the SC.

(6) Carry on your business for which you are licensed for efficiently, honestly
and fairly.

(7) Supervise and monitor your business to ensure compliance to securities

laws, its regulations, guidelines and relevant code of conduct. Such
supervision and monitoring should also be able to prevent and identify
breaches to securities laws, its regulations, guidelines and relevant code of
conduct.

(7A) There is no conviction against you or your director, chief executive,

manager or controller of an offence–
(a) involving bribery, fraud, dishonesty, mismanagement of a
corporation, violence or the conviction of which involved a finding
that you or he acted fraudulently or dishonestly, whether within or
outside Malaysia; or
(b) under the securities laws, corporation laws or any law outside
Malaysia relating to capital markets.

(7B) There is no–

(a) pending investigation or criminal charge against you or your director,
chief executive, manager or controller in any court of law, whether
within or outside Malaysia, for an offence involving bribery, fraud,
dishonesty, mismanagement of a corporation or violence;
(b) compound issued or any administrative action taken against you or
your director, chief executive, manager or controller, whether within
or outside Malaysia, by a regulator or law enforcement agency for
any offence involving bribery, fraud, dishonesty, mismanagement of
a corporation or violence;
(c) civil enforcement action initiated against you or your director, chief
executive, manager or controller in any court of law by a regulator or
law enforcement agency, whether within or outside Malaysia; or
(d) disqualification of your director, chief executive, manager or
controller from holding the office of a director, whether within or
outside Malaysia, under the securities laws or corporation laws.

(8) For those that are licensed prior to 1 January 2015, you are required to
surrender the existing physical licence to the SC immediately upon variation,
revocation or if you cease to carry on your licensed regulated activities.

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(9) For those that are licensed after 1 January 2015, submission of cessation
form is deemed as surrender of licence as there will not be any issuance of
physical licence effective 1 January 2015.

(10) Ensure that the carrying on of any licensed regulated activity on your behalf
is performed by persons who are appropriately licensed.

(11) Ensure that your employees, including your licensed representatives, where
applicable, comply with securities laws, its regulations and guidelines and
any other applicable law that may govern your regulated activity.

(12) Ensure that your licensed representatives are–

(a) adequately supervised in the performance of their duties;
(b) sufficiently trained for those duties before acting as a representative;
and
(c) kept abreast of developments by means of continuing training
programmes.

(13) Immediately inform the SC of any occurrence of these events:

(a) Where any of your employees has misappropriated clients' funds or
committed any act that is detrimental to the interests of your clients;
(b) Where any of your licensed representatives, where applicable, ceases
to be fit and proper to hold a CMSRL; or
(c) Where any of your licensed representatives, where applicable, fails or
ceases to perform their function.

(13A) Ensure that you retain, for a period of not less than seven years, all the
relevant records relating to the carrying on of any regulated activity that
will sufficiently explain the transactions relating to your clients, including
any advice provided.

Additional conditions and restrictions

Fund management

You must satisfy the following if you are a CMSL holder that carries on the
business of fund management:

(14) Immediately disclose to your clients–

(a) any legal or disciplinary event that is material to an evaluation of your
integrity and ability to meet contractual commitments to your clients;
and/or
(b) any material fact about your financial condition which will impair your
ability to meet your contractual commitments to your clients.

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(15) Undertake the purchase/sale of securities listed on Bursa Securities through

a CMSL holder that carries on the business of dealing in securities. However,
in the case of a purchase/sale of fixed income securities listed on Bursa
Securities, you may also do so through a licensed institution who is
authorised to deal in fixed income securities.

(16) Undertake the purchase/sale of derivatives on a derivatives exchange

through a CMSL holder that carries on the business of dealing in derivatives
who is a clearing member of Bursa Derivatives or a clearing member of a
specified exchange.

(17) Not undertake the purchase/sale of securities or derivatives which involves

or potentially involves a conflict of interest between you and the funds
under your management.

(18) Not for your own account, undertake, directly or indirectly, the
purchase/sale of securities from or to the funds under your management.

(19) Obtain the SC's prior approval for investments in assets other than
conventional and Shariah-compliant securities, derivatives, money market
instruments and deposits in conventional and Shariah-compliant deposit
accounts.

(20) [Deleted]

Financial planning

You must satisfy the following if you are an individual CMSL holder that carries
on the business of financial planning:

(21) Comply with the requirements of the Continuing Professional Education in

accordance with the format specified by the SC.

7.03 What are the conditions and restrictions in relation to a CMSRL holder?

General conditions and restrictions

You must satisfy the following:

(1) Remain fit and proper at all times as set out in section 65 of the CMSA.

(2) Comply with the requirements in Chapter 4 of this handbook.

(3) Comply with securities laws, its regulations and guidelines and any other
applicable law that may govern the business activities carried on by you.

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(4) Not allow any unlicensed person to perform any of your licensed regulated
activities on your behalf.

(5) Ensure that you carry on your licensed regulated activity efficiently,
honestly and fairly.

(6) Comply with the requirement of the Continuing Professional Education

(CPE) by obtaining 20 CPE points a year, in accordance with the format
specified by the SC.

(7) For those that are licensed prior to 1 January 2015, you are required to
surrender the existing physical licence to the SC immediately upon
variation, revocation or if you cease to carry on your licensed regulated
activities.

(7A) There is no conviction against you of an offence–

(a) involving bribery, fraud, dishonesty, mismanagement of a
corporation, violence or the conviction of which involved a finding
that you acted fraudulently or dishonestly, whether within or outside
Malaysia; or
(b) under the securities laws, corporation laws or any law outside
Malaysia relating to capital markets.

(7B) There is no–

(a) pending investigation or criminal charge against you in any court of
law, whether within or outside Malaysia, for an offence involving
bribery, fraud, dishonesty, mismanagement of a corporation or
violence;
(b) compound issued or any administrative action taken against you,
whether within or outside Malaysia, by a regulator or law enforcement
agency for any offence involving bribery, fraud, dishonesty,
mismanagement of a corporation or violence;
(c) civil enforcement action initiated against you in any court of law by a
regulator or law enforcement agency, whether within or outside
Malaysia; or
(d) disqualification from holding the office of a director, whether within
or outside Malaysia, under the securities laws or corporation laws.

(8) Those that are licensed after 1 January 2015, submission of cessation form
is deemed as surrender of licence as there will not be any issuance of
physical licence affective 1 January 2015.

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 Chapter 7: Conditions and Restrictions of Licence

7.04 Permitted activities

General conditions and restrictions

Advising on corporate finance

A CMSL holder for advising on corporate finance is allowed to carry out placement
activities in the Leading Entrepreneur Accelerator Programme (LEAP) Market of
Bursa Securities, subject to the conditions set out in this paragraph.

(1) Eligibility criteria:

(a) Only a CMSL holder that is an adviser is allowed to carry out such
placement activities;
(b) The CMSL holder can only undertake placement activities in relation
to a corporate proposal to which it is an adviser; and
(c) Only a CMSRL holder of such CMSL holder referred to in
subparagraphs 7.04(1)(a) and 7.04(1)(b) is allowed to carry out such
placement activities.

(2) The placement activities in the LEAP Market must comply with the following
requirements:
(a) The placement activities are limited to the LEAP Market only; and
(b) The placement activities must not include provision of underwriting
services.

(3) Obligations of the CMSL holder in undertaking placement activities:

(a) The CMSL holder must notify the SC of their registration with Bursa
Securities as an adviser for the LEAP Market prior to carrying out the
placement activities;
(b) The CMSL holder is responsible and accountable for the conduct of
its CMSRL holders; and
(c) The CMSL holder must establish proper policies and controls on the
placement activities carried out.

(4) The undertaking of placement activities permitted under this paragraph

does not extend to the provision of underwriting services in the LEAP
Market.

Financial planning

(5) Subject to the conditions set out under this paragraph, a CMSRL holder for
financial planning is allowed to provide specific advice on the following
capital market products pursuant to a financial plan:

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 Chapter 7: Conditions and Restrictions of Licence

(a) permissible funds;

(b) equities, debentures or warrants listed on Bursa Securities; and
(c) unlisted corporate bonds or sukuk.

(6) For the purpose of this paragraph, unless otherwise provided–

“permissible funds” means the following funds authorised or approved by

the SC, and made available or offered in Malaysia:
(a) unit trust funds;
(b) private retirement schemes;
(c) wholesale funds;
(d) listed real estate investment trusts;
(e) exchange-traded funds; and
(f) any collective investment scheme from the participating countries
under the ASEAN Framework for Cross-Border Offering of Collective
Investment Schemes (ASEAN CIS Framework);

“specific advice” means providing advice which identifies the specific type
of capital market product which the investor should purchase or sell as
opposed to merely providing general portfolio allocation.

(7) A CMSRL holder for financial planning must not provide specific advice on–
(a) equities, debentures or warrants listed on Bursa Securities unless he
has passed Module 7 of the SCLE; or
(b) unlisted corporate bonds or sukuk unless he has attained the Investor
Protection Professional Certification (IPPC)7, jointly awarded by FMAM
and the Asian Institute of Chartered Bankers (AICB).

(8) A CMSRL holder for financial planning who wishes to provide a specific
advice for the capital market products listed under subparagraph 7.04(5),
must undertake a suitability assessment on the client in accordance with
subparagraphs 7.04(9)-(24), before providing the advice.

(9) A suitability assessment enables the CMSRL holder for financial planning to
form a reasonable basis for the specific advice given to the client. In this
regard the CMSRL holder for financial planning must–
(a) take all practicable measures to ascertain that the information collected
in respect of the client’s investment objectives, financial situation and
particular needs are accurate and complete; and

7
Those who have attained the Pasaran Kewangan Malaysia Certificate (PKMC) qualification will be eligible for this
additional offering.

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 Chapter 7: Conditions and Restrictions of Licence

(b) give due consideration and conduct a review of the subject matter of
the advice as may be reasonable in the circumstances.

(10) A CMSRL holder for financial planning need not conduct suitability
assessment if–
(a) the client is a high-net-worth entity that has opted out from being
subjected to a suitability assessment;
(b) a client tops up his investment in the same permissible fund with the
same CMSRL holder for financial planning who has previously
conducted a suitability assessment on the client; or
(c) the CMSRL holder for financial planning has conducted a suitability
assessment on the client and advised to the client a range of products
that takes into account the client’s risk profile and the client then seeks
to invest in a product which is within the same type of products that
has been advised.

(11) Where subparagraph 7.04(10)(c) applies, the CMSRL holder for financial
planning must have in place a process which would enable the client to
acknowledge that there has been no material change in the information
obtained from the previous suitability assessment.

Suitability assessment processes

(12) A suitability assessment exercise comprises the following stages:

Stage 1 Gathering information pertaining to a client

Stage 2 Analysing information gathered

Stage 3 Matching a suitable product to meet a client’s risk

profile and needs

Stage 4 Making a recommendation

Stage 1: Information to be gathered for suitability assessment

(13) Central to the suitability assessment conducted by the CMSRL holder for
financial planning is the gathering of necessary information pertaining to a
client.

(14) Prior to gathering the client’s information, the CMSRL holder for financial
planning must inform the client that any misleading, inaccurate or
incomplete information provided by the client will affect the outcome of the
advice given and that he will not be held liable for the advice given.

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(15) Information gathered from a client can be categorised into the following
three categories:

Category of Outcome
Information
(a) Know-Your-Client The CMSRL holder for financial planning must
gather sufficient information which would enable
him to have sufficient background information on
the client.

This information may include, among other

things, the client’s age, annual income and
number of dependents.

(b) Client’s Risk The CMSRL holder for financial planning must
Profile and gather sufficient information on the client’s
Needs investment objectives, financial situation, risk
profile and current portfolio.

By gathering this information, the CMSRL holder

for financial planning should be able to determine
the client’s risk profile and needs.

(c) Client’s The CMSRL holder for financial planning must

Investment gather sufficient information on the client’s
Knowledge educational qualification, training, work
experience and investment experience.

The client’s knowledge and experience should

demonstrate that he has sufficient understanding
of the features and risk associated with the
product recommended.

The CMSRL holder for financial planning should be

comfortable with a client’s level of knowledge.

The required level of knowledge or experience

possessed by the client should correspond to the
complexity of the product.

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Stage 2: Analysing Information Gathered

(16) Upon gathering the information specified under subparagraph 7.04(15)

above, the CMSRL holder for financial planning should analyse the
information to determine whether the client understands the risks
associated with the investment and has the capability to withstand such
risks.

Stages 3 and 4: Matching and Making a Recommendation

(17) The CMSRL holder for financial planning can only provide specific advice
for capital market products listed under subparagraph 7.04(5) to the client
upon assessing the information gathered under subparagraph 7.04(16).
The CMSRL holder for financial planning’s advice provided can be –
(a) that the product is suitable for the client as it matches the risk profile
and needs of the client; or
(b) that the product is not suitable for the client as it does not match the
risk profile and needs of the client.

(18) In the event the CMSRL holder for financial planning is unable to identify a
suitable product for the client, he must inform the client immediately.

Documentation and Record-Keeping

(19) The CMSRL holder for financial planning must record all the information
gathered during the suitability assessment exercise and any updates to
such information.

(20) Any advice made should be recorded and a copy of the advice should be
provided to the client.

(21) The advice made must set out the reasons for the advice.

(22) The advice provided by a CMSRL holder for financial planning must be
signed by the CMSRL holder for financial planning and the client.

(23) The CMSRL holder for financial planning must obtain a written
acknowledgement from the client that−
(a) all information disclosed by the client is true, complete and accurate;
and
(b) the client has understood the features and risks of the product having
obtained the explanation from the CMSRL holder for financial planning.

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 Chapter 7: Conditions and Restrictions of Licence

(24) As the case may be, the CMSRL holder for financial planning must also
obtain from the client a written acknowledgement where the client−
(a) declines to provide information requested by the CMSRL holder for
financial planning; or
(b) decides to purchase another capital market product that is not advised
by the CMSRL holder for financial planning.

(25) Notification process for CMSRL holder for financial planning intending to
provide specific advice under subparagraph 7.04(7):
(a) The principal being the CMSL holder must notify the SC of the name
and details of their existing CMSRL holders who intend to provide
specific advice as permitted above by downloading and completing
the Notice of Scope Expansion for Eligible Financial Planners form,
which is available on the SC website;
(b) All forms must be submitted by the principal, alongside the necessary
supporting document(s), via email to FPPlus@seccom.com.my prior
to the commencement date of the additional service offering(s); and
(c) In the case of an application for a new representative’s licence for
financial planning, the CMSRL applicant must append proof of their
qualification to carry out the new additional service of providing
specific advice to their submission of Form 3: Application for New
Capital Markets Services Representative’s Licence via EASy. They
must also include the following, as the case may be, in the “Proposed
Position & Description of Duties” field of their Form 3:
(i) Advising on equities, debentures or warrants listed on Bursa
Securities; or
(ii) Advising on unlisted corporate bonds or sukuk.

(26) A CMSL holder for financial planning is permitted to engage a CMSL holder
for dealing in securities or fund management in relation to portfolio
management, which would then carry out the investment as per the
investment allocation or specific advice made pursuant to a financial plan,
provided the following conditions are satisfied:
(a) the client’s written consent must have been obtained prior to the
CMSL holder for financial planning engaging the identified CMSL
holder;
(b) the identified CMSL holder must on board the client as its own client;
(c) the CMSL holder for financial planning does not handle any client’s
monies; and
(d) the CMSL holder for financial planning must disclose to the client, all
fees and charges payable to the CMSL holder for financial planning
relating to the collaboration, including any trailer fees (in formula or
percentage form).

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

Chapter 7A

REQUIREMENTS FOR SUBMISSION OF PROPOSALS AND SPECIFIC

PROPOSALS

7A.01 General

(1) In addition to the licensing requirements imposed on holders of a CMSL

and a CMSRL for advising on corporate finance, this chapter sets out the
requirements to be complied with by CMSL and CMSRL holders for the
submission of proposals and specific proposals to the SC.

(2) The requirements in this chapter also apply to the registered persons
referred to in the Third Column of Part 1, Item 2 of Schedule 4 of the CMSA
for the regulated activity of advising on corporate finance in relation to
submission of proposals and specific proposals to the SC.

(3) This chapter replaces the requirements in the Principal Adviser Guidelines
and the requirements set out are in addition and not in derogation to other
requirements imposed by the securities laws and/or any guidelines issued
by the SC.

7A.02 Definitions

(1) For the purposes of this chapter, all words shall have the same meaning as
defined in the CMSA and paragraph 1.06 of this handbook unless otherwise
stated below–

closed-end fund (CEF) means a public limited company

incorporated in Malaysia and engaged wholly
in the business of investing its funds in
securities for the purposes of–
(a) spreading investment risks; and
(b) managing a portfolio of investments,

to gain revenue and profit for the benefit and

on behalf of its shareholders.

collective investment refers collectively to a unit trust fund, private

scheme (CIS) retirement scheme, REIT, ETF, CEF and
business trust.

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

corporate bonds means debentures as defined in the CMSA

but do not include–
(a) structured products; and
(b) debentures issued by the Federal
Government, any State Government or
BNM.

direct corporate finance means experience in advising others on any of

experience the following corporate proposals in
Malaysia, Australia, Hong Kong, Singapore
or the United Kingdom:
(a) Initial public offering;
(b) Mergers and acquisitions involving listed
companies;
(c) Fundraising exercises through the capital
market by listed companies; or
(d) Restructuring exercises involving listed
companies.

In Malaysia, the types of corporate proposals

above exclude those relating to listed
companies on the LEAP Market of Bursa
Securities.

exchange-traded fund has the same meaning assigned to it in the

(ETF) Guidelines on Exchange-Traded Funds.

infrastructure project means a company whose core business is

company building and operating a project that creates
the basic physical structures or foundations
for the delivery of essential public goods and
services, which are necessary for the
economic development of a state, territory or
country, such as the construction and
operation of roads, bridges, tunnels,
railways, mass transit systems, seaports,
airports, water and sewage systems,
sewerage systems, power plants, gas supply
systems and telecommunication systems.

principal adviser (PA) means an entity referred to in First Column

of Table 12.

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

proposal refers to any proposal submitted to, deposited

or registered with the SC under Part VI and
Part IIIA of the CMSA.

qualified person (QP) means an individual who fulfils the

requirements set out in this chapter.

recognised principal means an entity that fulfils the requirements

adviser (RPA) set out in this chapter.

significant change in the has the same meaning assigned to it in the

business direction or Equity Guidelines;
policy of a listed
corporation

specific proposal means a proposal in respect of–

(a) an application for the listing and
quotation of securities on the Main
Market of Bursa Securities under section
212 of the CMSA, except for applications
relating to corporate bonds and sukuk
and listing of units of an ETF;
(b) registration of prospectus under section
232 of the CMSA, except for
prospectuses relating to corporate
bonds and sukuk, listing of units of an
ETF, unlisted CIS and structured
warrants;

(c) transfer of listing;

(d) an acquisition or disposal of assets,
which results in a significant change in
the business direction or policy of a listed
corporation whose shares are listed on
the Main Market of Bursa Securities,
except where such disposal of assets is
not part of any other proposal that
requires approval from the SC; or
(e) an acquisition or disposal of assets,
which results in a significant change in
the business direction or policy of a
corporation whose shares are listed on
the ACE Market of Bursa Securities that
is carried out in conjunction with (c).

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

structured product has the same meaning assigned to it in the

Guidelines on Unlisted Capital Market
Products under the Lodge and Launch
Framework.

structured warrants has the same meaning assigned to it in the

Issuer Eligibility Guidelines – Structured
Warrants.

Sukuk means certificates of equal value evidencing

undivided ownership or investment in the
assets using Shariah principles and concepts
endorsed by the Shariah Advisory Council of
the SC but do not include sukuk issued by
the Federal Government, any State
Government or BNM.

take-overs and mergers means take-overs, mergers and compulsory

acquisitions under Division 2 Part VI of the
CMSA.

unit trust fund has the same meaning assigned to it in the

Guidelines on Unit Trust Funds.

7A.03 Eligibility to act as a principal adviser

(1) The First Column of Table 12 list out the entities that are PAs, while the
Second Column specifies the types of proposal that a PA can submit to the
SC.

Table 12: Principal Advisers and Types of Proposal (Other Than Specific Proposal)
First Column Second Column
Principal Adviser Type of Proposal (Other than
Specific Proposal)
Investment bank and universal All proposals.
broker

1+1 broker All proposals, except for proposal relating

to corporate bonds, structured products
and Islamic securities.

KAF Investment Bank Berhad Proposal relating to–

(a) issue of securities; and
(b) take-overs and mergers.

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

First Column Second Column

Principal Adviser Type of Proposal (Other than
Specific Proposal)
Licensed bank Proposal relating to–
(a) corporate bonds and sukuk, except
for those issued by Malaysian-
incorporated public companies or
foreign corporations that are:
(i) capable of being converted
into equity; or
(ii) issued together with warrants;
(b) structured warrants; and
(c) structured products.
Islamic bank Proposal relating to–
(a) issue of securities; and
(b) take-overs and mergers.

Special scheme broker Proposal relating to–

(a) equity securities of listed or unlisted
foreign issuers to sophisticated
investors; and
(b) structured warrants.

Bank Pembangunan Malaysia Proposal relating to listing or otherwise of

Berhad infrastructure project companies as may
be specified by the SC.

(2) Notwithstanding subparagraph 7A.03(1), a PA may submit a proposal to

the SC relating to take-overs and mergers subject to additional
requirements in guidelines issued by the SC relating to take-overs and
mergers.

7A.04 Requirements for submission of specific proposals to the SC

(1) Only an RPA can submit a specific proposal to the SC. A PA that intends to
be an RPA shall seek recognition of the SC in accordance with the provisions
herein.

(2) An RPA refers to a PA (other than a licensed bank and a special scheme
broker) listed in Table 12 that has–
(a) written policies and control procedures relating to the submission of
specific proposals;

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

(b) at least one employee that satisfies the criteria to be a QP, as set out
in subparagraph 7A.04(3); and
(c) been granted recognition pursuant to subparagraph 7A.04(7).

(3) A QP appointed must be an individual who–

(a) is a CMSRL holder or an ERP hired on a full-time basis for the
regulated activity of advising on corporate finance;
(b) has at least seven years of direct corporate finance experience in the
nine years preceding his appointment;
(c) has, in the five years immediately preceding his appointment,
completed one of the following:
(i) an initial public offering on the Main Market or the ACE Market
of Bursa Securities;
(ii) an acquisition or disposal of assets, which results in a significant
change in the business direction or policy of a listed corporation
whose shares are listed on the Main Market of Bursa Securities,
except where such disposal of assets is not part of any other
proposal that requires approval from the SC; or
(iii) an acquisition or disposal of assets, which results in a significant
change in the business direction or policy of a corporation
whose shares are listed on the ACE Market of Bursa Securities
that is carried out in conjunction with a transfer of listing;
(d) has no conviction against him of an offence–
(i) involving bribery, fraud, dishonesty, mismanagement of a
corporation, violence or the conviction of which involved a
finding that he acted fraudulently or dishonestly, whether
within or outside Malaysia; or
(ii) under the securities laws, corporation laws or any law outside
Malaysia relating to capital markets;
(e) has no–
(i) pending investigation or criminal charge against him in any
court of law, for an offence involving bribery, fraud, dishonesty,
mismanagement of a corporation or violence, whether within or
outside Malaysia;
(ii) compound issued or any administrative action taken against
him, by a regulator or law enforcement agency for any offence
involving bribery, fraud, dishonesty, mismanagement of a
corporation or violence, whether within or outside Malaysia;
(iii) civil enforcement action initiated against him in any court of
law, by a regulator or law enforcement agency, whether within
or outside Malaysia; or

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

(iv) disqualification from holding the office of a director, under the

securities laws, corporation laws or any law outside Malaysia
relating to capital markets, whether within or outside Malaysia;
and
(f) has no disciplinary proceedings or actions against him by any
regulatory, supervisory or professional body.
Guidance to subparagraph 7A.04(3)(b)
A QP is required to have a cumulative direct corporate finance experience of
seven years in the nine years preceding the appointment. Such experience
need not be continuous. An example is illustrated below where a person had
intervals at different periods of time in the nine years prior to his appointment.
His direct corporate finance experience of seven years is therefore not
continuous. However, his appointment as a QP will still be acceptable to the
SC given he has gained seven years of direct corporate finance experience
collectively over the immediate past nine-year period prior to his appointment.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Direct CF Break Direct CF Break Appointment
Experience Experience

Application for recognition

(4) An application for recognition must be made in the form and manner
specified by the SC. The SC may also require further documents and
information as the SC considers necessary for the purposes of assessing
the application. All applications must be accompanied with the prescribed
application fee.

(5) An applicant must immediately notify the SC’s Head of Equities Department
upon becoming aware of changes to any information or documents
submitted to the SC.

(6) The SC may, at any point in time after receiving an application for
recognition or notification of changes, conduct inquiries or require an
applicant to furnish additional information or documents as the SC
considers necessary.

Grant or refusal to grant a recognition

(7) The SC may, in relation to an application for recognition made under

subparagraph 7A.04(4), grant or refuse to grant a recognition.

(8) The SC may impose any conditions or restrictions on the recognition

granted to the applicant as the SC considers necessary.

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

(9) Without prejudice to subparagraph 7A.04(8), the SC may at any point in

time vary the conditions or restrictions imposed or impose additional
conditions or restrictions on an RPA as the SC considers necessary.

(10) The SC may refuse to grant a recognition under subparagraph 7A.04(7),

if–
(a) the application has not been made in accordance with the
requirements in this chapter;
(b) the applicant has failed to comply with any securities laws or
guidelines issued by the SC;
(c) the applicant has furnished any statement or information to the SC
that is false or misleading or of which there is a material omission; or
(d) the SC has reason to believe that granting the recognition to the
applicant would be detrimental to public interest or integrity of the
market.

Register of recognised principal advisers

(11) Upon recognition, the name and particulars of the RPA and its QP, which
may include any conditions or restrictions imposed, shall be admitted into
the register of RPAs on the SC website.

(12) Upon withdrawal of a recognition granted pursuant to subparagraph

7A.04(13), the SC may remove an RPA from the register of RPAs
permanently or for such period as the SC determines.

Withdrawal of recognition granted

(13) The SC may withdraw a recognition granted under subparagraph 7A.04(7)

if–
(a) an RPA or any of its QP has breached or failed to comply with any
securities laws, guidelines issued by the SC, conditions or restrictions
imposed by the SC;
(b) any information or document furnished to the SC is false or
misleading or from which there is a material omission; or
(c) the SC has reason to believe the continued recognition of the RPA
would be detrimental to public interest or integrity of the market.

Continuing obligation

(14) In the event an RPA knows or becomes aware of any of the following
events, the RPA must inform the SC immediately via email to the Head of
Equities Department. The events would include where a QP attached to the
RPA–

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 Chapter 7A: Requirements for Submission of Proposals and Specific Proposals

(a) ceases or discontinues his employment (whether terminated, laid-off

or retired); and
(b) fails to comply with the criteria set out in subparagraphs 7A.04(3)(d),
7A.04(3)(e) and/or 7A.04(3)(f).

(15) An RPA is required to submit an annual declaration within seven business

days from 1 January of each year (reporting year) affirming that the QP
appointed has–
(a) at least seven years of direct corporate finance experience in the nine
years immediately preceding the reporting year;
(b) in the five years immediately preceding the reporting year completed
one of the following:
(i) an initial public offering on the Main Market or the ACE Market
of Bursa Securities;
(ii) an acquisition or disposal of assets, which results in a significant
change in the business direction or policy of a listed corporation
whose shares are listed on the Main Market of Bursa Securities,
except where such disposal of assets is not part of any other
proposal that requires approval from the SC; or
(iii) an acquisition or disposal of assets, which results in a significant
change in the business direction or policy of a corporation
whose shares are listed on the ACE Market of Bursa Securities
that is carried out in conjunction with a transfer of listing; and
(c) complied with subparagraphs 7A.04(3)(d), 7A.04(3)(e) and
7A.04(3)(f).

7A.05 Contact

(1) For any enquiries in relation to this chapter, you may contact:
Corporate Finance and Investments
Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Tel: +603-6204 8000
(Attention: Equities Department)

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 Chapter 8: Continuing Professional Education (CPE) Requirement

Chapter 8

CONTINUING PROFESSIONAL EDUCATION (CPE) REQUIREMENT

8.01 General

(1) This chapter provides for CPE requirement that CMSRL holders and ERPs
need to comply with. This chapter is applicable to CMSL holders, CMSRL
holders, registered persons and ERPs.

(2) CPE is a mandatory programme for capital markets professionals to

consistently update or refresh their technical knowledge, enhance
behavioural competencies as well as to instil ethical standards as expected
in this handbook and the Guidelines on Investor Protection (IP Guidelines)
jointly issued by the SC and BNM.

(3) This chapter sets out–

(a) the two categories of CMSRL holders and ERPs based on the years of
experience in the capital markets industry to determine their eligibility
of learning modes and activities;
(b) points allocation for each learning activity;
(c) the procedures involved in obtaining the points for each activity; and
(d) the reporting requirement.

(4) The CMSL holders and registered persons are responsible for determining
the training needs of the CMSRL holders and ERPs respectively, monitoring
their CPE compliance and providing the necessary attestation on the fitness
and probity of the CMSRL holders and ERPs. CMSRL holders and ERPs are
also equally responsible to determine their own training needs, professional
development and fulfilment of the CPE requirement.

(5) All CMSRL holders and ERPs must obtain 20 CPE points in a year on or
before the anniversary date of their licence or cycle period as required in
order to continue carrying out the relevant regulated activity.

8.02 Mode of learning and point allocation

(1) CPE is aligned with the Industry Competency Framework for the
professional development of CMSRL holders and ERPs. As each individual
requires different learning intervention, the CPE framework also takes into
account an individual’s number of years of experience in the capital markets
industry.

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 Chapter 8: Continuing Professional Education (CPE) Requirement

(2) This chapter provide for two categories of CMSRL holders and ERPs:
• Category 1: Individuals with less than 10 years of experience in the
capital markets industry; and
• Category 2: Individuals with experience of 10 years or more in the
capital markets industry.

(3) In order to accumulate CPE points, the CMSRL holders and ERPs may
choose to participate in any mode of learning under the categories of
‘active learning’, ‘development of others’ or ‘self-directed learning’
based on their eligibility.

(4) The details of the activities under each learning category and CPE point
allocation are summarised below:

Activity CPE Point Maximum

Allocation Allocation
(per anniversary
or cycle period)

A. Active Learning Mode

1. Attending CPE-approved course
Physical:
• Minimum 3 hours, up to 6 hours 5 points
• 6 hours or more 10 points
Unlimited
Structured online:
• Less than 3 hours 5 points
• 3 hours or more 10 points
2. Obtaining CPE-recognised qualification or academic certification
• Upon successful completion/passing of 10 points
each course module per
term/semester (ongoing basis)
Unlimited
• Upon obtaining professional 20 points
qualification or academic certification
(one-off)
B. Development of Others Learning Mode
1. Speaking or lecturing on capital markets-related topics or
subjects
• Less than 3 hours 5 points
Unlimited
• 3 hours or more 10 points
2. Publication of books, articles or interviews
Book
• Published 10 points
Unlimited
• For subsequent updates 5 points

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Activity CPE Point Maximum

Allocation Allocation
(per anniversary
or cycle period)

Article or interview
• For every publication 5 points

3. Serving in CPE-approved industry associations, bodies or

committees
• Chairman / President / Vice Chairman 10 points
/ Vice President
10 points
• Secretary / Treasurer / Committee 5 points
Member / Sub-Committee Member
4. Acting as an industry resource person
• Serving as the SC’s expert witness / 20 points
subject matter expert
• Participating in industry dialogue / 5 points
working group / consultation / focus
Unlimited
group / taskforce (per engagement)
• Participating as member delegate in 5 points
domestic or international industry
roadshow (per event)
• Conducting structured coaching and 10 points 10 points
mentoring (once within each
anniversary period)
C. Self-Directed Learning Mode
1. General learning, e.g. reading capital 5 points
markets related materials such as books,
journals, magazines and online
publication (per purchase/subscription)
2. Completion of non-structured online 5 points
learning such as podcasts, e-books, e-
5 points
journals, the SIDC’s Capital Market
Competency Management System
(CMS), or other similar learning relating
to capital markets, soft skills,
behavioural, technical and leadership
(per online learning session)

(5) CMSRL holders and ERPs are not allowed to carry forward any excess of
CPE points to the next anniversary or cycle period. Similar position is also
reiterated for the ERPs in the IP Guidelines.

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 Chapter 8: Continuing Professional Education (CPE) Requirement

8.03 Active learning mode

Eligibility

(1) ‘Active Learning’ refers to any form of proactive learning arising from
participative or interactive process between the learners and the
instructors.

(2) The two types of activities under this learning mode are:
(a) Attending CPE-approved course; and
(b) Obtaining CPE-recognised professional qualification or academic
certification.

(3) Both Category 1 and 2 of CMSRL holders and ERPs are eligible to collect
full CPE points solely from these activities.

Attending CPE-approved courses

(4) CMSRL holders and ERPs may obtain CPE points by attending and
completing programmes that promote leadership or soft skills, including
behavioural skills, capital market related technical competencies, physically
or via structured online course with either a local CPE-approved training
provider or an established overseas training.

(5) Structured online course refers to online course with assessments (e.g.
evaluation or test results) and where there is sufficient record to
demonstrate fulfilment and duration of the course.

(6) Established overseas provider refers to an institution or professional body

recognised or approved as training provider for the purpose of continuous
learning and professional development of licensed and registered persons
by the relevant capital markets regulator in their respective jurisdictions.

(7) No additional points will be granted for attending and completing the same
CPE-approved course within the same anniversary or cycle period.

(8) All courses (domestic and overseas) including structured online courses
have to be approved by the SIDC.

(9) However, for physical or structured online courses offered by established

overseas training providers, CMSRL holders and ERPs may be granted CPE
points post attendance.

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Obtaining CPE-recognised professional qualification or academic

certification

(10) All certification programmes as listed on the SC’s website, are CPE-
recognised. CPE points will be awarded to CMSRL holders or ERPs based
on the conferment date of the said qualification and point allocation is only
valid during the anniversary or cycle period.

(11) All qualifications obtained prior to licensing as CMSRL holder or registration

as ERP will not be eligible for CPE points.

8.04 Development of others learning mode

Eligibility

(1) ‘Development of others’ refers to the learning process that involves the
sharing of knowledge and expertise of one person for the benefit of others.

(2) The eligibility under this learning mode is as follows:

Eligibility
No. Activity
Category 1 Category 2
1. Speaking or lecturing on capital √ √
markets related topics or subjects
2. Publication of book, article or interview √ √
3. Serving in CPE-approved industry √ √
associations, bodies or committees
4. Acting as industry resource person:
(a) Serving as the SC’s expert witness / √ √
subject matter expert
(b) Participating in industry dialogue / √ √
working group / consultation / (by invitation
focus group / taskforce only)

(c) Participating as member delegate in √ √

domestic or international industry (by invitation
roadshow only)

(d) Conducting structured coaching and X √

mentoring

(3) Depending on the eligibility, CMSRL holders and ERPs may collect full CPE
points solely from these activities except for serving in CPE-approved
industry associations, bodies or committees and conducting structured
coaching and mentoring where there is a maximum of 10 CPE points
capped per anniversary or cycle period.

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Speaking or lecturing on capital markets-related topics or subjects

(4) This category excludes speaking or lecturing engagements which are within
or form part of the CMSRL holders’ or ERPs’ job duties and responsibilities.
For example, a presentation made for the benefit of a client’s specific
investment would not be eligible for any CPE points.

(5) No additional CPE points will be granted for speaking or lecturing on a same
topic, subject, programme title or outline within the same anniversary or
cycle period.

Publication of books, articles or interviews

(6) This category includes publication of a book, an article and an interview in

any form of media, but excludes materials produced within or forming part
of the CMSRL holders’ and ERPs’ job duties and responsibilities (e.g. reports
commissioned for the benefit a client’s specific investment would not be
eligible for any CPE points).

(7) Additional CPE points would not be awarded for republication of the same
material or using different publishers.

Serving in CPE-approved industry associations, bodies or committees

(8) CMSRL holders and ERPs will only be entitled to claim the relevant CPE
points for participation as an office bearer of approved industry associations
and committees as provided on the SC website.

(9) The tenure as an office bearer must be valid during the CMSRL holder’s
anniversary or the ERP’s cycle period respectively.

(10) A CMSRL holder and an ERP may obtain a maximum of 10 CPE points only
from his capacity as an office bearer. No additional points will be granted
for serving in multiple committees within the same industry associations,
bodies or committees within the same anniversary or cycle period.

Acting as an industry resource person

(11) Resource person refers to CMSRL holders or ERPs who have been selected,
appointed or nominated to provide expertise or industry insights on policy
formulation or promote awareness on capital markets.

(12) The following are the eligibility requirements:

(a) Serving as the SC’s expert witness / subject matter expert

(i) For the purpose of claiming CPE points for this activity, the
CMSRL holder or ERP must be appointed and served as an expert
witness for the SC within the anniversary or cycle period.

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(b) Participating in industry dialogue / working group /

consultation / focus group / taskforce
(i) CPE points are only awarded for participating in industry dialogue
events of a certain stature, where the objectives and initiatives
of the events are duly recognised by the SC, the SIDC, Bursa
Malaysia, BNM or relevant professional bodies.
(ii) No additional points will be granted for participating in the same
industry dialogue event conducted in multiple sessions.

(c) Participation as member delegate in domestic or

international industry roadshow
(i) Industry roadshow must reflect the following:
• Promotion of capital markets awareness and investor
protection; and
• A national-led agenda or initiative.
(ii) No additional points will be granted for participating in the
same industry roadshow conducted in multiple sessions.

(d) Conducting structured coaching and mentoring

(i) The framework, including the template applicable for a
structured coaching and mentoring exercise, must be common
across the organisation levels as identified by its Human
Resources Department and form part of the CMSRL holder’s or
ERP’s key performance indicator or job goal.
(ii) Only CMSRL holders and ERPs under Category 2 may obtain CPE
points from this activity, up to a maximum of 10 points. However,
no additional points will be granted for conducting multiple
structured coaching and mentoring sessions, irrespective of the
number of mentees and topic coverage, within the same
anniversary or cycle period.

8.05 Self-directed learning mode

Eligibility

(1) ‘Self-directed learning’ refers to unaccompanied, own initiative learning

activities.

(2) The two types of activities under this learning mode are:
• General learning - reading capital markets related materials; and
• Completion of non-structured online learning.

(3) Both Category 1 and 2 of CMSRL holders and ERPs are eligible to collect a
maximum of 5 CPE points only from each of these activities for each
anniversary or cycle period.

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8.06 Procedures for claiming CPE points

(1) All CPE-approved courses, both domestic and overseas, as well as

structured online courses require the approval from the CPE Secretariat.

(2) For all learning activities other than attending CPE-approved courses,
CMSRL holders or ERPs must submit the supporting evidence to their
respective CMSL holders or registered persons for verification prior to
reporting via the ComRep platform.

(3) Table 13 sets out the procedures or supporting documents required for
claiming CPE points.

Table 13: Procedures or Supporting Documents Required for Claiming CPE Points

No. Activity Procedure or Supporting Document

1. Attending CPE- • CMSRL holders or ERPs must register for CPE-
approved courses approved course listed in the CPE Training
Calendar organised or conducted by the
relevant CPE-approved training providers.
• CMSRL holders or ERPs must inform the
training provider that they are subject to the
CPE requirement and provide their CMSRL or
ERP number to the training provider.
• In respect of physical or structured online
courses offered by established overseas
training providers, CMSRL holders and ERPs
must apply directly to the CPE Secretariat and
submit:
(a) the course outline or content which
includes the duration of the course; and
(b) a copy of the certificate or confirmation of
attendance from the course organiser or
training provider.

2. Obtaining CPE- A certified true copy of the examination transcript

recognised for each successful completion of course, module,
qualification or level or paper, as the case may be, per term or
academic semester.
certification

3. Speaking or The confirmation letter from the respective

lecturing on organiser, the outline of the programme or
capital markets presentation and any other documents deemed
related topics or necessary.
subjects

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No. Activity Procedure or Supporting Document

4. Publication of A copy of the published materials and where
Book, Article or necessary, a confirmation letter from the relevant
Interview publisher verifying the authorship of the CMSRL
holder or the ERP. Details that should be included
in the letter are:
(a) Name of publication;
(b) Date of publication;
(c) Name of publisher; and
(d) International Standard Book Number (ISBN),
where relevant.

5. Serving in CPE- The letter of appointment from the respective

approved industry associations, bodies or committees.
industry
associations,
bodies or
committees
6. Acting as an • If serving as the SC’s expert witness or
industry resource subject matter expert, a confirmation letter
person from the SC.
• If participating in an industry dialogue,
working group, consultation, focus
group or taskforce and participation as
member delegate in domestic or
international industry roadshow, a copy
of the invitation or appointment letter or
attendance confirmation from the organiser
offering or conducting the activities pursuant
to subparagraphs 8.04(12)(b) and
8.04(12)(c).
• If conducting structured coaching and
mentoring, a letter of endorsement from the
CMSRL holders’ or ERP’s respective Human
Resources Department on the details of the
structured coaching and mentoring activities.

7. Self-directed • For general learning, a copy of the purchase

learning receipt as proof of purchase or subscription of
relevant materials.
• For completion of non-structured online
learning, a copy of the certificate of
completion of non-structured online learning.

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 Chapter 8: Continuing Professional Education (CPE) Requirement

8.07 Compliance reporting

Submission of Fit and Proper Compliance Report (Form 6A)

(1) All CMSL holders and registered persons are required to submit the semi-
annual Fit and Proper Compliance Report (Form 6A) on the fit and proper
standing of their CMSRL holders and ERPs whose licence anniversary date or
cycle period fall due within the reporting period. Such report shall be submitted
via the ComRep platform within seven business days from the end of the
reporting period.

Contact

(2) The CPE Secretariat can be contacted at:

CPE Secretariat
Securities Industry Development Corporation
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Tel: +603-6204 8000 / 8536 Email: cpe@sidc.com.my

(3) The Authorisation and Licensing Department can be contacted at:

Authorisation and Licensing Department
Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Tel: +603-6204 8000 Fax: +603-6201 5282

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 Chapter 9: Treatment of Existing Licence Holders

Chapter 9

TREATMENT OF EXISTING LICENCE HOLDERS

[This chapter has been deleted]

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 Chapter 10: Outsourcing Arrangement by CMSL Holders

Chapter 10

OUTSOURCING ARRANGEMENT BY CMSL HOLDERS

10.01 General

(1) This chapter sets out the requirements for outsourcing processes, services
or activities by CMSL holders to service providers. CMSL holders must select
an appropriate and efficient service provider as well as to monitor the
outsourcing arrangements on a continuous basis to ensure that it does not
lead to business disruption and negative consequences to the CMSL
holder’s clients.

(2) This chapter replaces the Guidelines on Outsourcing for Capital Market
Intermediaries.

(3) This chapter does not apply to investment banks, unless otherwise
stipulated in any laws, regulations or guidelines as may be amended or
issued from time to time by the SC.

(4) Except for functions set out under subparagraph 10.02(2), all functions of
the CMSL holder can be outsourced subject to the requirements of this
chapter.

10.02 Material Outsourcing Arrangement

(1) The outsourcing of the following functions by a CMSL holder are considered
as material outsourcing arrangement and can be outsourced to the
following service providers:
(a) Internal audit function to its group or an external auditor;
(b) Compliance function to its group;
(c) Risk management function to its group;
(d) Clearing and settlement to any service provider;
(e) Fund accounting to any service provider;
(f) Fund valuation to any service provider;
(g) The maintenance of register of unit holders to any service provider;
and
(h) Any other function of the CMSL holder that the SC may determine.

(2) A CMSL holder is not allowed to outsource any back office function that
involves–
(a) the decision-making functions of the CMSL holder; or
(b) any interaction or direct contact with the clients of the CMSL holder.

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(3) Other than the material functions set out in subparagraph 10.02(1), other
outsourcing arrangements will also be considered as material outsourcing
arrangement in the following circumstances:
(a) There may be a financial, reputational or operational impact on the
CMSL holder in the event of a default or failure of the service provider;
(b) The CMSL holder’s services or support rendered to its clients may be
potentially impacted by the outsourcing arrangement;
(c) The CMSL holder’s ability and capacity to comply with regulatory
requirements may be impacted by the outsourcing arrangement; and
(d) If the appointed service provider may not be able to perform the
outsourced function, there is a degree of difficulty and time required
for the CMSL holder to select an alternative service provider or to
bring the outsourced function in-house.

(4) Internal audit, compliance and risk management functions cannot be sub-
contracted.

(5) A CMSL holder must notify the SC within 14 days upon signing the service
level agreement for any material outsourcing arrangement in
accordance with the notification requirements in this chapter.

(6) A CMSL holder that is also a PO or TP must concurrently forward a copy of

the notification in subparagraph 10.02(5) to the stock exchange or
derivatives exchange as the case may be.

(7) Where the compliance function is outsourced to the group level, a CMSL
holder must ensure that the group appoints at least one registered
compliance officer to perform the compliance function.

(8) Where a service provider or a sub-contractor is located outside Malaysia,

the CMSL holder must–
(a) analyse the economic, legal and political conditions of the country
that the service provider and the sub-contractor are operating from,
which may impact the undertaking of any outsourced functions;
(b) refrain from outsourcing to jurisdictions where the SC, the stock
exchange, derivatives exchange or their agents is/are hindered from
having prompt access to information;
(c) commit to retrieve information readily available from the service
provider and the sub-contractor should the SC, the derivative
exchange, stock exchange or their agents request for such
information; and
(d) inform the SC, the derivatives exchange or stock exchange if any
foreign authority were to seek access to its clients’ information.

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10.03 Responsibilities and oversight over service providers or sub-

contractors

(1) The Board of the CMSL holder remains accountable for all outsourced
functions.

(2) The Board of the CMSL holder and the CMSL holder shall be responsible to
establish effective policies and procedures for its outsourcing arrangement
including a monitoring framework to monitor the service delivery,
performance reliability and processing capacity of the service provider
which should, among others, include periodic review and update the service
level agreement and hold regular meetings to discuss performance of the
service provider, sub-contractor and regulatory matters. A CMSL holder
must also ensure that the service provider has adequate policies and
procedures to monitor the conduct of the appointed sub-contractor.

(3) A CMSL holder must perform an assessment on a service provider on a

periodic basis, as part of its monitoring mechanism under subparagraph
10.03(1) and submit a report of the assessment to its board of directors
and senior management. This assessment should be performed by the
CMSL holder’s internal audit or external auditor or compliance officer and
the report should be submitted to the SC as and when requested. However,
if the assessment is on a service provider providing an outsourced
compliance function, the assessment must be performed by the CMSL
holder’s internal audit or external auditor only. This assessment should take
into account the service provider’s policies and procedures in monitoring
conduct of the sub-contractor and any new material risk arising from the
outsourcing arrangement and strategies for managing such risk.

10.04 Notification to the SC

(1) The information required in the notification form for material

outsourcing arrangements is set out under Appendix 5 of this handbook
and a template of the notification form can be found at www.sc.com.my.

(2) A letter of undertaking is also required from the service provider or sub-
contractor stating that the SC, stock exchange, derivative exchange and
their agents will have access to all information, records and documents
relating to the material outsourced arrangement(s). The letter of
undertaking must be attached to the notification form.

(3) A CMSL holder must notify the SC of any variation or termination of the
service level agreement and sub-contracting agreement in relation to any
material outsourcing arrangement signed by the service provider or any
adverse development arising in such material outsourcing arrangement that
could significantly affect the CMSL holder, within 14 days from the
occurrence of the event.

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 Chapter 10: Outsourcing Arrangement by CMSL Holders

(4) A CMSL holder must also notify the SC of any adverse development arising
in the outsourcing arrangement of any outsourced function that could
significantly affect the CMSL holder, within 14 days from the occurrence
of the event.

(5) A CMSL holder that is also a PO or TP must concurrently forward a copy of

the notification form and/or any variation or termination of service level
agreement and sub-contracting agreement or any adverse development as
mentioned in subparagraphs 10.04(1) and 10.04(3) and 10.04(4), to the
stock exchange or derivative exchange as the case may be.

10.05 Contact

(1) For any enquiries in relation to this chapter, you may contact:
Intermediary and Fund Supervision
Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Tel: +603-6204 8000
(Attention: Supervision Department)

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 Chapter 11: Trading Representative

Chapter 11

TRADING REPRESENTATIVE

11.01 General

(1) A participating organisation (PO) is permitted to have a Trading

Representative (TR) as a registered person under section 76 of the CMSA
to carry out permitted activities as specified in this chapter.

(2) An application by an individual to be registered with the SC as a TR must

be made through a PO.

(3) This chapter sets out the following:

(a) Qualifying criteria for an individual to be registered with the SC as a
TR;
(b) Activities that may be carried out by a TR; and
(c) Duties of the PO for which the TR acts for.

(4) The board of directors of a PO shall be ultimately responsible and held

accountable for the acts of the PO’s TR.

11.02 Permitted activities and obligations of a trading representative

(1) A TR must only act on behalf of one PO at all times.

(2) [Deleted]

(3) A TR is only permitted to accept clients’ orders (order taking) and execute
securities trades.

(4) In carrying out the above activities, a TR must not induce, or attempt to
induce, any client to enter into, or to make or offer to any client to enter
into, any transaction or trade.

(5) A TR must continuously comply with the fit and proper criteria as set out
under Schedule 1 of this handbook.

11.03 Registration

(1) The SC may register an individual applicant provided the following

requirements are satisfied:
(a) The applicant must be at least 21 years old;
(b) The applicant satisfy fit and proper criteria as set out under Schedule
1 of this handbook; and

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 Chapter 11: Trading Representative

(c) The applicant has completed the Familiarisation Programme for

Trading Representative 1 (FPTR 1) and passed the required
assessment.

11.04 Entry requirements

(1) The applicant must satisfy the following minimum qualification and
experience requirement as set out below:
(a) Degree or professional qualification from an institution recognised by
the Government of Malaysia;
(b) Diploma from an institution recognised by the Government of Malaysia;
or
(c) Sijil Pelajaran Malaysia (SPM) or an equivalent qualification recognised
by the Government of Malaysia, provided that the applicant has at least
three years prior experience as a trading clerk registered with Bursa
Securities.

11.05 Procedures for registration

(1) An applicant must have his application made through a PO which he is

acting for.

(2) The PO must submit to the SC the relevant form, the documents specified
in Schedule 2 of this handbook and pay the fees as may be prescribed by
the SC.

(3) The PO may be required to furnish any other information or documents

as may be required by the SC for the purposes of the application.

11.06 Duties of the principal

Pre-registration

(1) A PO, through whom the application is made, must-

(a) conduct proper screening of the applicant to ensure that the
applicant has satisfied the entry requirements and the fit and proper
criteria as set out in Schedule 1 of this handbook before the
application is submitted to the SC; and
(b) satisfy itself that any information or document that is furnished by an
applicant is not false or misleading, including conducting due diligence
checks.

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 Chapter 11: Trading Representative

Post-registration

(2) A principal must conduct ongoing supervision over its TR and ensure that
they satisfy the training requirement as specified in this chapter.

(3) The principal must ensure that the ratio of 1 licensed dealer’s representative
(DR):3 TRs is maintained. However, the SC may allow a variation of ratio
from the current 1 DR:3 TRs to 1 DR:10 TRs subject to the following
conditions:
(a) The TR is recruited directly by the PO;
(b) The TR is placed under the direct supervision of the PO and there is
a clear supervision arrangement in place; and
(c) Clear accountability has been assigned within the PO for oversight of
the TR.

11.07 Refusal of registration

(1) The SC may refuse an application for registration where the applicant failed
to meet the following grounds:
(a) Non-compliance of any of the requirements as specified in the
handbook;
(b) The SC has reason to believe that the applicant may not be able to
act in the best interest of the clients of the principal having regard
to his reputation, character, financial integrity and reliability;
(c) The SC is not satisfied as to the record of past performance or
expertise of the applicant having regard to the nature of the duties
which he may perform as a TR;
(d) The SC has reason to believe that the applicant will not carry out the
regulated activity efficiently, honestly or fairly;
(e) There are other circumstances which are likely to lead to the improper
conduct of business by, or reflect discredit on the manner of
conducting the business of, the applicant or any person associated
with him for the purpose of his business; or
(f) The SC is of the opinion that it would be contrary to the interests of
the public to register such applicant.

11.08 Procedures for cessation

(1) Where a TR ceases to act on behalf of a PO, the PO must submit the
relevant form to the SC and such person shall cease to be a TR. In the
event he wishes to act for a new PO, the new PO must submit a fresh
application to the SC to register him as a TR.

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11.09 Deregistration

(2) The SC may deregister a TR where—

(a) the T R or the PO does not comply with any of the requirements as
specified under this handbook;
(b) any of the grounds under paragraph 11.07 applies; or
(c) the TR contravenes any conditions or restrictions imposed on the
registration.

(2) The SC will not exercise its power to deregister without first giving the
affected person an opportunity to be heard.

11.10 Reporting requirement

(1) On the PO’s anniversary date of licence, it must submit an annual report
to the SC containing—
(a) a declaration to the SC that all its TRs are in compliance with the fit
and proper requirements;
(b) an update on training undertaken by each of the TR, including any
specific training and development activities carried out for the TR;
(c) details of complaints received against any of its TR, if any; and
(d) the outcome of its supervision and findings against any of its TR, if
any.

11.11 Training requirements for trading representative

(1) A PO must ensure that its TR undergoes training from time to time to
increase his knowledge and technical know-how and keep abreast with the
current development in the industry.

(2) The PO must—

(a) ensure that a TR attends five days of training every year;
(b) ensure that the training attended by its TR is relevant to his
functions; and
(c) maintain a training register to log in training days completed by each
TR.

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 Chapter 12: Recognition Under the ASEAN Capital Market Forum (ACMF) Initiative

Chapter 12

RECOGNITION UNDER THE ASEAN CAPITAL MARKET FORUM (ACMF)

INITIATIVE
RECOGNISED REPRESENTATIVE UNDER THE AMCF PASS
PROFESSIONAL MOBILITY FRAMEWORK

12.01 General

(1) An eligible professional from a Recognised ACMF Member Country, who

wishes to undertake capital market activities as specified in this chapter,
must be attached to a CMSL holder and must also be registered with the
SC under subsection 76(2) of the CMSA as a Recognised Representative
(RR).

(2) This chapter sets out the following:

(a) Eligibility criteria for an individual to be registered with the SC as an
RR;
(b) Permitted activities that may be carried out by an RR;
(c) Procedures for registration;
(d) Duties of the CMSL holder to which the RR is attached; and
(e) Obligations of the RR.

12.02 Eligibility criteria

(1) An individual who is licensed, registered, approved or authorised by the

Home Regulator in a Recognised ACMF Member Country to—
(a) undertake, including but not limited to, the activity of investment
advice; and
(b) satisfy fit and proper criteria as set out under Schedule 1 of this
handbook.

12.03 Permitted activities

(1) An RR is permitted to perform the following activities:

(a) Giving general investment advice on ASEAN capital market products
as specified in this chapter; and
(b) Issuing or promulgating research analysis or research reports on
ASEAN capital market products as specified in this chapter.

(2) Notwithstanding subparagraph 12.03(1), the scope of permitted activities

will also be subject to any limitations imposed by the licence, registration,
approval or authorisation granted by the Home Regulator of the RR.

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Illustrations
1. Dealer’s Representative / Fund Manager

You are allowed to provide investment advice to your clients that is solely
incidental to the main regulated activity for which you are licensed,
registered, approved or authorised and your Home Regulator does not
permit you to issue or promulgate research analysis or research reports.
Your permitted activity as an RR will be limited to giving general investment
advice and you are not permitted to issue or promulgate research analysis
or research reports as specified in this chapter.

2. Research Analyst

You are licensed, registered, approved or authorised by your Home

Regulator where you are allowed to issue or promulgate research analysis
or research reports and provide investment advice to your clients.
Your permitted activity as an RR will be giving general investment advice
including issuing and promulgating research analysis or research reports as
specified in this chapter.

(3) An RR is not permitted to perform the following activities:

(a) Giving specific advice to investors by considering the investor’s
investment objective, financial situation and particular needs; and
(b) Soliciting for sales of capital market products.

(4) The scope of capital market products captured under this chapter is limited
to the following products from ASEAN countries:
(a) Listed securities;
(b) Bonds; and
(c) Units of a collective investment scheme, including units of a real
estate investment trust and units of an infrastructure trust.

12.04 Registration

(1) An application by an eligible professional to be registered with the SC as an

RR must be made through a CMSL holder.

(2) The CMSL holder must submit to the SC all relevant documentation
specified in the application form and any other information as may be
prescribed or requested by the SC.

(3) The CMSL holder may be required to furnish any other information or
documents as may be required by the SC for the purposes of the application.

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(4) In the event the eligible professional wishes to be attached with multiple
CMSL holders, each CMSL holder which the eligible professional wishes to
be attached must submit a separate application to the SC for registration
as an RR.

(5) The SC may impose other conditions or restrictions on an RR or the CMSL

holder at the time of granting an approval for the registration.

(6) Notwithstanding subparagraph 12.04(5), the SC may at any time, where it

deems necessary, vary the conditions or restrictions imposed upon the
grant of the approval while the registration status remains valid.

12.05 Validity of registration

(1) The registration of an RR will be valid for a period of two years unless the
registration is withdrawn or a deregistration is effected prior to the expiry
of this period.

(2) The registration of the RR is conditional upon the RR remaining licensed,

registered, approved or authorised by the Home Regulator. In the event the
licence, registration, approval or authorisation status becomes invalid, a
submission to the SC by the CMSL holder must be made to deregister the
RR immediately.

(3) An RR who wishes to continue to carry out the regulated activity in Malaysia
after the expiry of the two-year validity period must apply for the renewal
of registration to the SC for its approval.

12.06 Duties of the principal

Pre-registration

(1) A CMSL holder that submits an application to register an eligible

professional as its RR must—
(a) conduct screening of the applicant to ensure that the applicant has
satisfied the eligibility and the fit and proper criteria as set out in this
handbook;
(b) satisfy itself that information or document that is furnished by the
eligible professional for the appointment and registration as an RR is
not false or misleading, including ensuring that the necessary due
diligence is conducted; and
(c) has the requisite policies, procedures and controls to monitor the
activities and the conduct of its RR.

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Post-registration

(2) A CMSL holder is accountable and responsible for monitoring the conduct
of its RR and must satisfy the following conditions:
(a) Comply with the reporting requirements set out by the SC;
(b) Have proper compliance and oversight framework in place to ensure
the RR only undertakes activities that is permitted under this
registration; and
(c) Immediately notify the SC of the occurrence of any of the following
events:
(i) The RR has committed any act that is detrimental to the interest
of clients;
(ii) The RR has ceased to be fit and proper;
(iii) The RR fails or ceases to perform the activity for which it has
been registered; or
(iv) The CMSL holder has received any complaints or has adverse
findings against its RR.

12.07 Obligations of a recognised representative

(1) An RR must at all times satisfy the following conditions:

(a) Remain licensed or registered or approved or authorised by the Home
Regulator in the Recognised ACMF Member Country to carry out
investment advice;
(b) Remain fit and proper at all times;
(c) Comply with the relevant requirements stipulated in this handbook;
(d) Comply with the securities laws, regulations and guidelines and any
other applicable law that may govern the activities carried out by the
RR in Malaysia; and
(e) Keep the CMSL holder informed of any actions taken against him by
the Home Regulator or if the RR fails to comply with the eligibility
criteria and fit and proper requirements.

12.08 Refusal of registration

(1) The SC may refuse an application for registration, if the applicant fails to
meet the eligibility criteria, fit and proper requirements or any other
applicable requirements under the securities laws or relevant SC guidelines.

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12.09 Procedures for cessation

(1) Where an RR ceases to act on behalf of a CMSL holder, the CMSL holder
must submit the relevant form to the SC within 14 days from the effective
cessation date. In the event the eligible professional wishes to act as an RR
for another CMSL holder, the other CMSL holder must submit a fresh application
to the SC for registration of the eligible professional as an RR.

12.10 Withdrawal of registration

(1) The SC may withdraw a registration granted if the SC is satisfied that the
RR or the CMSL holder to which the RR is attached has failed to comply
with or has breached:
(a) Any terms or conditions imposed by the SC;
(b) Any requirements as set out in this handbook or direction issued by
the SC; or
(c) Any other requirements under the securities laws or relevant SC
guidelines.

12.11 Reporting requirement

(1) On the anniversary date of the CMSL holder, the CMSL holder to which
the RR is attached must submit an annual report to the SC which contains
the following:
(a) A declaration that all its RRs are in compliance with the fit and proper
requirements;
(b) A declaration that all its RRs remain licensed, registered, approved or
authorised by the Home Regulator in a Recognised ACMF Member
Country to undertake the regulated activity of investment advice;
(c) Details of complaints received against any of its RR, if any; and
(d) The outcome of its supervision and findings against any of its RR, if
any.

CROSS-BORDER PUBLICATION OF RESEARCH REPORTS

12.12 General

(1) Pursuant to the Memorandum of Understanding on the Cross-Border

Publication of Research Report under the ASEAN Capital Market
Professional Mobility Framework, licensed investment advisers from a
Recognised ACMF Member Country would be able to issue and promulgate
research reports to other Recognised ACMF Member Countries.

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12.13 Conditions for cross-border publication of research reports

(1) For the purpose of issuing and promulgating research reports, the foreign
licensed investment adviser is allowed to carry out the regulated activity of
investment advice provided that the following conditions are satisfied:

(a) The foreign licensed firm is registered with the SC and the foreign
research report is made available through–
(i) a CMSL holder; or
(ii) any electronic or physical platform, as may be allowed by the
SC.

Both (i) and (ii) shall be collectively known as a Hosting Platform;

(b) The foreign research report has been produced by a person licensed,
registered, approved or authorised to issue or promulgate a research
report in his home jurisdiction (Authorised Person) and was made
available to the comparable class of investors in the home jurisdiction,
as the class of investors for which the research report will be made
available in Malaysia. The Authorised Person and the foreign licensed
firm which the Authorised Person is attached to are responsible for
the contents of the research report;

(c) The foreign licensed firm had given its consent to the Hosting
Platform for the research report to be made available to investors in
Malaysia;

(d) The research report is to be made available by the Hosting Platform

in its entirety, without the Hosting Platform exercising any editorial
control, translating or modifying the report. The Hosting Platform will
act purely as a conduit in making available the research report to
investors; and

(e) The research report must include a disclaimer stating that it is

produced by the Authorised Person on behalf of the foreign licensed
firm which the Authorised Person is attached to, and such Authorised
Person and foreign licensed firm are subject to supervision by the
regulator of its home jurisdiction.

12.14 Registration

(1) A foreign licensed firm who wishes to issue and promulgate its research
reports through a Hosting Platform in Malaysia must submit an application
for registration with the SC.

(2) The application to the SC must include all relevant documents as specified
in the application form and any other information as may be requested by
the SC.

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(3) In the event that the foreign licensed firm wishes to issue and promulgate
its research report through multiple Hosting Platforms in Malaysia, the
foreign licensed firm must submit a separate application for each Hosting
Platform.

(4) The SC may impose other conditions or restrictions on the foreign licensed
firm at the time of granting an approval for registration.

(5) Notwithstanding subparagraph 12.14(4), the SC may at any time, where it

deems necessary, vary the conditions or restrictions imposed upon the grant
of the approval while the registration status remains valid.

(6) The issuer of the research report is deemed registered under subsection
76(2) of the CMSA after five business days of its completed submission,
unless the application for registration is otherwise rejected by the SC.

12.15 Rejection of registration

(1) The SC may reject an application for registration, if the applicant fails to
meet the eligibility criteria or any other applicable requirements under the
securities laws or relevant SC guidelines.

12.16 Procedures for cessation

(1) Where a Hosting Platform ceases to act on behalf of a registered foreign

licensed firm, the foreign licensed firm must submit the relevant form to
the SC within 14 days from the effective cessation date. The Hosting
Platform is also required to notify the SC within 14 days of such cessation.

12.17 Withdrawal of registration

(1) The SC may withdraw a registration granted if the SC is satisfied that the
registered foreign licensed firm or the Hosting Platform has failed to
comply with or has breached–
(a) any terms or conditions imposed by the SC;
(b) any requirements as set out in this handbook or direction issued by
the SC; or
(c) any other requirements under the securities laws or relevant SC
guidelines.

12.18 Ongoing obligations

(1) A registered foreign licensed firm and its Hosting Platform are required to
comply with applicable Malaysian laws, regulations and guidelines at all
times.

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Appendix 1

POLICY ON PERMITTED ACTIVITIES FOR STOCKBROKING COMPANIES

Introduction

A stockbroking company is authorised to carry on the business of dealing in securities.

Additional activities that may be carried out by a stockbroking company are listed in the
schedule below, according to the different type of entity.

Prior to undertaking the additional activities, a stockbroking company shall comply with
all applicable requirements stipulated in the CMSA, the licensing handbook, relevant
guidelines or any other condition imposed by the SC and the rules of the relevant stock
exchange.

Column 1 Column 2 Column 3

Entity Activity Condition Attached
1. Investment Dealing in Nil
banks derivatives
Dealing in debt All types of activities in the primary and secondary
securities market.
Fund Provided that the dedicated fund management
management personnel shall not engage in proprietary trading.
Unit trust • Permitted to undertake activities pertaining to
unit trust funds without having to set up a
separate management company subject to
obtaining the SC's approval under section 289
of the CMSA, and compliance with the
Guidelines on Unit Trust Funds.
• Permitted to engage in the business of
managing investment portfolios/funds and the
business of marketing and distributing unit trust
funds, either of its own or those of other
management companies, subject to compliance
with all relevant requirements of the Guidelines
on Unit Trust Funds.
Investment Nil
advice
Advising on • For categories of persons permitted to submit
corporate finance applications for corporate proposals to the SC,
refer to the relevant SC guidelines.
• For eligibility to submit corporate proposals and
the types of proposals that can be submitted to
the SC, refer to Chapter 7A of this handbook.
Financial planning Nil

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Column 1 Column 2 Column 3

Entity Activity Condition Attached
1. Investment Dealing in private Nil
banks retirement
schemes
Branching and • Permitted to establish branches and electronic
electronic access access facilities (EAFs) in the manner stipulated
facility in the Guidelines on the Establishment and
Location of a Branch Office by Universal Brokers
and Eligible Non-universal Brokers; Practice
Note 1 – Flexibilities Granted to Stockbroking
Companies in Relation to Branch Offices and
Branching Policy; and Guidelines on the
Establishment of Electronic Access Facilities by
Universal Brokers and Eligible Non-universal
Brokers.
• Allowed unrestricted branching. Those
intending to set up new branches shall be
subject to a readiness assessment or audit to
the satisfaction of the stock exchange and prior
approval of the SC.
Structured Permitted to issue and/or undertake all activities
products pertaining to structured products subject to
compliance with the Guidelines on Unlisted
Capital Market Products under the Lodge and
Launch Framework.
Structured Permitted to issue and/or undertake all activities
warrants pertaining to structured warrants, subject to
compliance with the Issuer Eligibility Guidelines –
Structured Warrants and the Prospectus
Guidelines.
2. Universal Dealing in Nil
brokers derivatives
Dealing in debt All types of activities in the primary and secondary
securities market.
Fund Provided that the dedicated fund management
management personnel shall not engage in proprietary trading.
Unit trust • Permitted to undertake activities pertaining to
unit trust funds without having to set up a
separate management company subject to
obtaining the SC's approval under section 289
of the CMSA, and compliance with the
Guidelines on Unit Trust Funds.
• Permitted to engage in the business of
managing investment portfolios/funds and the

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Column 1 Column 2 Column 3

Entity Activity Condition Attached
2. Universal business of marketing and distributing unit trust
brokers funds, either of its own or those of other
management companies, subject to compliance
with all relevant requirements of the Guidelines
on Unit Trust Funds.
Investment Nil
advice
Advising on • For categories of persons permitted to submit
corporate finance applications for corporate proposals to the SC,
refer to the relevant SC guidelines.
• For eligibility to submit corporate proposals and
the types of proposals that can be submitted to
the SC, refer to Chapter 7A of this handbook.
Financial planning Nil
Dealing in private Nil
retirement
schemes
Access to money Permitted to access the interbank market to
market for undertake borrowing or lending of funds, subject
universal brokers to compliance with the Guidelines on Access to
Interbank Market by Universal Brokers as may be
amended by BNM and/or prudential standards as
may be prescribed from time to time.
Branching and • Permitted to establish branches and electronic
electronic access access facilities (EAFs) in the manner stipulated
facility in the Guidelines on the Establishment and
Branching and Location of a Branch Office by Universal Brokers
electronic access and Eligible Non-universal Brokers; Practice
facility Note 1 – Flexibilities Granted to Stockbroking
Companies in Relation to Branch Offices and
Branching Policy; and Guidelines on the
Establishment of Electronic Access Facilities by
Universal Brokers and Eligible Non-universal
Brokers.
• Allowed unrestricted branching. Those
intending to set up new branches shall be
subject to a readiness assessment or audit to
the satisfaction of the stock exchange and prior
approval of the SC.
Structured Permitted to issue and/or undertake all activities
products pertaining to structured products subject to
compliance with the Guidelines on Unlisted

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Column 1 Column 2 Column 3

Entity Activity Condition Attached
2. Universal Capital Market Products under the Lodge and
brokers Launch Framework.
Structured Permitted to issue and/or undertake all activities
warrants pertaining to structured warrants, subject to
compliance with the Issuer Eligibility Guidelines –
Structured Warrants and the Prospectus
Guidelines.

3. Special Dealing in Nil

scheme derivatives
brokers Dealing in debt Permitted to deal in unlisted debt securities
securities subject to the requirements as specified in the
rules of the stock exchange.
Investment Nil
advice
Advising on • For categories of persons permitted to submit
corporate finance applications for corporate proposals to the SC,
refer to the relevant SC guidelines.
• For eligibility to submit corporate proposals and
the types of proposals that can be submitted to
the SC, refer to Chapter 7A of this handbook.
Financial planning Nil
Dealing in private Nil
retirement
schemes
Structured Permitted to issue and/or undertake all activities
products pertaining to structured products subject to
compliance with the Guidelines on Unlisted
Capital Market Products under the Lodge and
Launch Framework.
Structured Permitted to issue and/or undertake all activities
warrants pertaining to structured warrants, subject to
compliance with the Issuer Eligibility Guidelines –
Structured Warrants and the Prospectus
Guidelines.
4. 1+1 brokers Dealing in Nil
derivatives
Dealing in debt Permitted to deal in unlisted debt securities
securities subject to the requirements as specified in the
rules of the stock exchange.

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Column 1 Column 2 Column 3

Entity Activity Condition Attached
4. 1+1 brokers Investment Nil
advice
Advising on • For categories of persons permitted to submit
corporate finance applications for corporate proposals to the SC,
refer to the relevant SC guidelines.
• For eligibility to submit corporate proposals and
the types of proposals that can be submitted to
the SC, refer to Chapter 7A of this handbook.
Financial planning Nil
Dealing in private Nil
retirement
schemes
Branching and • Permitted to establish branches and electronic
electronic access access facilities (EAFs) in the manner stipulated
facility in the Guidelines on the Establishment and
Location of a Branch Office by Universal Brokers
and Eligible Non-Universal Brokers; Practice
Note 1 - Flexibilities Granted to Stockbroking
Companies in Relation to Branch Offices and
Branching Policy; and Guidelines on the
Establishment of Electronic Access Facilities by
Universal Brokers and Eligible Non-universal
Brokers.
• Allowed unrestricted branching. Those
intending to set up new branches shall be
subject to a readiness assessment or audit to
the satisfaction of the stock exchange and prior
approval of the SC.
Structured Permitted to issue and/or undertake all activities
products pertaining to structured products, subject to
compliance with the Guidelines on Unlisted
Capital Market Products under the Lodge and
Launch Framework.
Structured Permitted to issue and/or undertake all activities
warrants pertaining to structured warrants, subject to
compliance with the Issuer Eligibility Guidelines –
Structured Warrants and the Prospectus
Guidelines.
5. Stockbroking Dealing in debt Permitted to deal in unlisted debt securities
company that securities subject to the requirements as specified in the
has not rules of the stock exchange.

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 Appendix 1: Policy Permitted Activities for Stockbroking Companies

Column 1 Column 2 Column 3

Entity Activity Condition Attached
complied with Investment Nil
the Policy advice
Framework Advising on Advisory only
for corporate finance
Stockbroking
Financial planning Nil
Industry
Consolidation Dealing in private Nil
retirement
schemes

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 Appendix 2: Electronic Application System (EASy)

Appendix 2

ELECTRONIC APPLICATION SYSTEM (EASy)

1. All CMSL holders, must, within three months of being licensed, apply to the SC for
access to EASy. The CMSL holders will be required to sign the Acceptance of Terms
and Conditions, evidencing the principal's agreement to be bound by the Terms
and Conditions of Use of EASy. All CMSL holders and their authorised users8 will
thereupon comply with the Terms and Conditions of Use of EASy at all times,
including any amendments, variations or modifications thereto. The Terms and
Conditions of Use of EASy are available at https://easy.seccom.com.my:8282.

2. The list of applications or submissions that can be made via EASy is available on–
(a) the SC website at www.sc.com.my; and
(b) the EASy website at https://easy.seccom.com.my:8282.

3. The original signed version of all EASy submissions together with relevant
supporting materials must be kept by the CMSL holder and/or the relevant person
at the business address or the principal address or a designated place approved
by the SC at all times for as long as the person is licensed or is in the employment
of the CMSL holder, and for a period of seven years after the person leaves the
principal.

4. For this purpose, the SC reserves the right to conduct an examination at the
business address or principal address of the applicant or at the designated place
to ascertain that this requirement is being complied with.

File upload specifications

5. Any supporting document for submission to the SC through EASy shall not exceed
10MB and should be in a format specified in EASy.

Unavailability of EASy

6. If EASy is unavailable for more than five consecutive days, either due to an
electrical power failure, a natural disaster, an emergency or any other event which
is beyond the control of the SC, applicants may manually submit applications or
notifications to the SC.

7. For manual submissions, all duly completed forms and relevant supporting
documents must be submitted in both hard and soft copy versions (USB flash
drive). The SC may, through its website or via the mass media, inform the public
of measures put in place for accepting such submissions until the system resumes
normal operation.

8
Persons authorised by the CMSL holder to access or establish a connection to EASy.
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 Appendix 2: Electronic Application System (EASy)

8. Under such circumstances, all applications or notifications are to be submitted with

the required fees to the SC at:

Authorisation and Licensing Department

Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur

9. A CMSL holder and its directors are ultimately responsible for all information,
including its supporting materials, submitted via EASy through the use of the
principal's account. As such, the CMSL holder is expected to have in place the
necessary policies and procedures to ensure that the information submitted via
EASy whether on its behalf, or on behalf of its representatives and/or key
personnel, are true and correct.

1 0 . For further enquiries on EASy or assistance on submissions, applicants may contact

the Helpdesk at +603-6204 8977 or e-mail EASyHelp@seccom.com.my.

11. An applicant must ensure that all information, including the supporting materials,
submitted via EASy is true and correct.

General

1 2 . Where necessary, the SC may require other relevant or additional information and
materials to be submitted.

1 3 . All licensed persons must comply with the requirements of EASy at all times, in
addition to all relevant provisions in the laws and the conditions for each type of
regulated activity.

1 4 . The SC may, where appropriate, allow any exemption and variation from the
requirements of EASy, based on the merits of the case, whether on a permanent
basis or for a specified period of time.

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 Appendix 3: Supporting Documents

Appendix 3

SUPPORTING DOCUMENTS

FORM 1: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE

No. Description
1. Processing fee of RM50.00
(Company cheque, bank draft, money order or postal order made payable to
"Securities Commission Malaysia" or "Suruhanjaya Sekuriti Malaysia")
2. A comprehensive and detailed proposal, which should generally include, but not
limited to, the following:
(a) Corporate profile;
(b) Board composition, management and organisation structure;
(c) Profile of individuals, comprising directors, proposed licensed director, CMSRL
applicants, key personnel, company secretary, and responsible person (where
applicable);
(d) Value proposition;
(e) Compliance with licensing requirements;
(f) Business plan for the next five years, detailing, among others, the
opportunities identified, market analysis, target market, objectives, strategies,
and execution plan; and
(g) Financial projection (a profit and loss forecast), with basis for each assumption.
3. Description of the applicant’s overall ownership and corporate structure in the form
of a tree diagram depicting the following details:
(a) Shareholding structure;
(b) Group structure depicting related, subsidiary and associate companies; and
(c) Percentage of shareholdings of each shareholder.
4. Profile of the applicant’s corporate shareholders – from immediate to ultimate
(where applicable)
5. Profile of the applicant’s individual shareholders
6. Details of any of the applicant's related, subsidiary and associate companies, which
are or were involved in any regulated activity in Malaysia or elsewhere and their
licence / registration status
7. Constitution / Memorandum and Articles of Association*
8. Certificate of incorporation under section 17 of the Companies Act 2016*
9. Lodgement under section 68 of the Companies Act 2016: Annual Return**
(if not applicable, submit the lodgement under section 14 of the Companies Act
2016: Application for Registration of a Company)
10. Lodgement under section 46 of the Companies Act 2016: Notification of Change
in the Registered Address**
11. Company profile from the Companies Commission of Malaysia, containing such
details as corporate information, summary of share capital, directors/officers,
shareholders/members, company charges, and financial information**
12. Lodgement under section 28 of the Companies Act 2016: Application for Change
of Name* (if applicable)
13. Lodgement under section 105 of the Companies Act 2016: Instrument of Transfer
of Shares*

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 Appendix 3: Supporting Documents

No. Description
14. Latest audited financial statements
15. Latest management accounts
(if the audited financial statements are more than three months old as at the
submission date)
16. Director’s report on the financial standing, affairs, current assets and contingent
liabilities of the company
(for the period between the first day of the new financial year and a date within
14 days before the date of submission)
17. List of employees indicating the Bumiputera / non-Bumiputera / foreign status,
the employment status and position
18. Applicant's operational and compliance manual describing in detail–
(a) reporting principles and procedures;
(b) internal audit procedures;
(c) procedures for compliance with the securities laws; and
(d) risk management policies, which the applicant has adopted or proposes to
adopt for its proposed business.
19. Declaration on the physical layout of business to avoid conflict of interest

Additional supporting details for the application for dealing in securities and/or dealing
in derivatives
20. Participation / Membership certificate of approval in principle for admission from
the exchange
21. A duly completed form for the application of compliance officer (at least one)

Additional supporting details for the application for fund management in relation to
portfolio management
22. Company's portfolio management system manual
23. Details of the funds projected to be managed in the next five years
24. Letter of acceptance from the proposed custodian
25. A completed self-assessment readiness checklist specified by the SC
26. A duly completed form for the application of compliance officer (at least one)

Additional supporting details for the application for fund management in relation to
portfolio management lodged by a company owned by individuals
27. Declaration on loans and credit facilities, pursuant to subparagraph 4.04(5) of the
Licensing Handbook

Additional supporting details for the application for dealing in unit trust products dealing
in private retirement schemes, investment advice, advising on corporate finance, and/or
financial planning
28. A completed self-assessment readiness checklist as specified by the SC

Others
29. Other relevant documents
* To be certified as a true copy by a notary public / solicitor / company secretary
** To be certified as a true copy by the Companies Commission of Malaysia

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 Appendix 3: Supporting Documents

FORM 1A: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE

(to be completed by director / key management / company secretary)
[Deleted]

FORM 1B: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE

(to be completed by director / key management who is also a proposed representative)
[Deleted]

FORM 1C: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE

(to be completed by the first two proposed representatives)
[Deleted]

FORM 1E: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE –

INDIVIDUAL APPOINTMENT / PROFILE OF INDIVIDUAL SHAREHOLDER
(director / licensed director / chief executive / key management / compliance officer /
responsible person / company secretary / representative / individual shareholder)
No. Description
1. Processing fee of RM50.00
(Company cheque, bank draft, money order or postal order made payable to
"Securities Commission Malaysia" or "Suruhanjaya Sekuriti Malaysia") (for Capital
Markets Services Representative’s Licence applicant only)
2. A copy of the individual's NRIC* (for Malaysian citizen) or passport(s)* (for non-
Malaysian citizen)
(must be crossed out with the remark "For The SC Use Only")
3. A recent passport size colour photograph
4. A copy of the individual's relevant academic certificates* (not applicable to individual
shareholder)
5. A copy of the relevant industry examination results / professional certificates and
membership* (for Capital Markets Services Representative’s Licence applicant)
6. A copy of the relevant industry examination results / proof of completion of the SC
licensing examination revision courses for the relevant modules / professional
certificates and membership* (for proposed compliance officer)
7. Detailed key performance indicators (KPIs) for the chief executive position
8. Justification for the appointment of chief executive / licensed director
9. Detailed curriculum vitae / professional profile of the individual shareholder
(must be consistent with the information provided in this form)
10. Bankruptcy search result from the Malaysian Department of Insolvency or, if outside
Malaysia, the competent authority (no more than 31 days old as at the date of
submission)
No. Description
11. Details of securities sold/purchased by the applicant for his/her own account during
the last 12 months immediately preceding the date of this submission
12. A copy of the individual's work permit* (for non-Malaysian citizen)
13. Other relevant documents, including the justification for appointment of chief
executive / licensed director, where applicable
* To be certified as a true copy by a notary public / solicitor / company secretary

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 Appendix 3: Supporting Documents

FORM 2: APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE

(INDIVIDUAL)
No. Description
1. Processing fee of RM50.00
(Company cheque, bank draft, money order or postal order made payable to
"Securities Commission Malaysia" or "Suruhanjaya Sekuriti Malaysia")
2. A copy of the individual's NRIC* (for Malaysian citizen) or passport(s)* (for non-
Malaysian citizen)
(must be crossed out with the remark "For the SC Use Only")
3. A recent passport size colour photograph
4. A copy of the individual's relevant academic certificates*
5. A copy of the relevant industry examination results / professional certificates and
membership*
6. Bankruptcy search result from the Malaysian Department of Insolvency or, if outside
Malaysia, the competent authority (no more than 31 days old as at the date of
submission)
7. A comprehensive and detailed proposal, which should generally include, but not
limited to, the following:
(a) Profile of individual;
(b) Value proposition;
(c) Compliance with licensing requirements;
(d) Business plan for the next five years, detailing, among others, the opportunities
identified, market analysis, target market, objectives, strategies, and execution
plan; and
(e) Financial projection (a profit and loss forecast), with basis for each assumption.
8. Details of any individual's related parties, which are or were involved in any
regulated activity in Malaysia or elsewhere and their licence and registration status
9. A copy of registration of business with the Companies Commission of Malaysia*
10. A detailed statement of the individual's current assets and contingent liabilities
signed by the applicant and verified by an approved auditor
11. Individual's operational and compliance manual describing in detail–
(a) reporting principles and procedures;
(b) internal audit procedures;
(c) procedures for compliances with the securities laws; and
(d) risk management policies which the applicant has adopted or proposes to adopt
for its proposed business.
12. Declaration on the physical layout of business to avoid conflict of interest
13. A completed self-assessment readiness checklist as specified by the SC
14. Details of securities sold/purchased by the applicant for his/her own account during
the last 12 months immediately preceding the date of this submission
15. A copy of the individual's work permit (for non-Malaysian citizen)
16. Other relevant documents
* To be certified as a true copy by a notary public / solicitor / company secretary

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 Appendix 3: Supporting Documents

FORM 3: APPLICATION FOR NEW CAPITAL MARKETS SERVICES

REPRESENTATIVE’S LICENCE
No. Description
1. Declaration from the company attesting to the fit and proper standing of the
CMSRL applicant, in accordance with section 65 of the CMSA
2. A copy of the individual’s NRIC (for Malaysian citizen) or passport(s) (for non-
Malaysian citizen)
(must be crossed out with the remark "For the SC Use Only")
3. A recent passport size colour photograph
4. A copy of the individual’s relevant academic certificates
5. A copy of the relevant industry examination results / professional certificates and
membership
6. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)
7. Details of securities sold/purchased by the applicant for his/her own account
during the last 12 months immediately preceding the date of this submission
8. A copy of the individual's work permit (for non-Malaysian citizen)
9. Other relevant documents

FORM 4: ANNUAL REPORTING FOR AUTHORISATION ACTIVITY FOR CAPITAL

MARKETS SERVICES LICENCE
No. Description
1. Lodgement under section 68 of the Companies Act 2016: Annual Return
2. Company profile from the Companies Commission of Malaysia, containing such
details as corporate information, summary of share capital, directors / officers,
shareholders / members, company charges, and financial information
3. Director’s report on the financial standing, affairs, current assets and contingent
liabilities of the company
(for the period between the first day of the new financial year and a date within
14 days before the date of submission)
4. Latest management accounts
(if the audited financial statements are more than three months old as at the
anniversary date)
5. List of employees indicating the Bumiputera / non-Bumiputera / foreign status, the
employment status and position
6. Latest organisational structure
7. Performance review
Additional supporting details for registered representatives
8. Annual reporting on the trading representatives, consisting of the following:
(a) A declaration to the SC that all its trading representatives are in compliance
with the fit and proper requirements;
(b) An update on training undertaken by each of the trading representatives,
including any specific training and development activities carried out for the
trading representatives;

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 Appendix 3: Supporting Documents

No. Description
(c) Details of complaints received against any of its trading representatives (if
any); and
(d) the outcome of its supervision and the findings against its trading
representatives (if any)

Annual reporting on the Recognised Representatives (RRs), consisting of the

following:
(a) A declaration to the SC that all its RRs are in compliance with the fit and proper
requirements;
(b) A declaration that all its RRs remain licensed, registered, approved or
authorised by the Home Regulator in a Recognised ACMF Member Country to
undertake the regulated activity of investment advice;
(c) Details of complaints received against any of its RRs (if any); and
(d) The outcome of its supervision and findings against any of its RRs (if any)

Additional supporting details for the regulated activity of Islamic fund management
9. For companies carrying out Islamic fund management activities, a written
disclosure and declaration that the Islamic fund management business is carried
out in accordance with Shariah principles (in line with paragraph 9 of the SC’s
Guidelines on Islamic Fund Management)

Others
10. Other relevant documents

FORM 5: ANNIVERSARY REPORTING FOR AUTHORISATION ACTIVITY FOR

CAPITAL MARKETS SERVICES LICENCE (INDIVIDUAL)
No. Description
1. A detailed statement of the individual’s current assets and liabilities signed by the
individual and verified by an external auditor
2. Details of securities sold/purchased by the individual for his/her own account since
the last anniversary date stated in the specified form
3. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)
4. Other relevant documents

FORM 6A: FIT AND PROPER COMPLIANCE REPORT

[Deleted as submission of the report is made via the ComRep platform]

FORM 7: APPLICATION FOR VARIATION OF REGULATED ACTIVITY FOR

CAPITAL MARKETS SERVICES LICENCE HOLDER
No. Description
1. A comprehensive and detailed proposal, which should generally include, but not
limited to, the following:
(a) reasons for conducting the regulated activity;

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 Appendix 3: Supporting Documents

No. Description
(b) outline and summary of the regulated activity as a whole, including an
overview and business targets at the end of three years. This includes
products and services offered and a description of the delivery channels;
(c) how the regulated activity fits within its corporate structure, group global
strategy and global operations;
(d) reasons why the company believes the business plan will be successful,
stating key assumptions, and supported by feasibility and market studies.
This may include:
(i) analysis of proposed regulated activity against the corresponding
operating environment, including target markets, competitors, threats
and opportunities, and plans to address them;
(ii) strength of financial resources to support the business, including sources
of initial and future capital;
(iii) ability and plans to manage associated operational and business risks;
(iv) availability of human capital, expertise and knowledge, including names
and credentials of key experts;
(v) supporting technology, systems and processes;
(vi) supporting research and development initiatives; and
(vii) track record and experience of the company specifically pertaining to
identified areas in the business plan;
(e) pro-forma financial statements (base case), including balance sheet and
income statement for the first three years of operations. Major asset,
liability, income and expense categories should be identified, including a
description of off-balance sheet activities. Identify and discuss key
assumptions underlying the calculations;
(f) sensitivity analysis showing the results of changes in key assumptions on
the base case business plan under a worst case scenario and discuss the
changes in assumptions;
(g) contingency plans to address worst case or other adverse scenarios;
(h) source of initial and future capital provided for in the base case and other
scenarios in the form of a capital plan and funding policies;
(i) projected staff complement and roles, and an organisation chart showing
reporting lines for senior positions and key over the three-year period.
This may include planned training, education and knowledge-sharing
initiatives;
(j) major risk areas and the policies and control procedures to monitor risk
tolerance and risk managements. This may include market, operational,
technology, legal, regulatory and strategic risks; and
(k) description of any material outsourcing arrangement anticipated by the
company.
2. Latest management accounts
(if the audited financial statements are more than three months old as at the
anniversary date)
3. List of employees indicating the Bumiputera / non-Bumiputera / foreign status, the
employment status and position

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 Appendix 3: Supporting Documents

No. Description
4. Applicant’s operational and compliance manual describing in detail, including–
(a) reporting principles and procedures;
(b) internal audit procedures;
(c) procedures for compliances with the securities laws; and
(d) risk management policies which the applicant has adopted or proposes to
adopt for its proposed business
5. Declaration on the physical layout of the business to avoid conflict of interest
Additional supporting details for the application for dealing in securities and/or dealing
in derivatives
6. Participation / Membership certificate of approval in principle for admission from
the exchange
7. A duly completed form for the application of compliance officer (at least one)

Additional supporting details for the application for fund management in relation to
portfolio management
8. Company’s portfolio management system manual
9. Details of the funds projected to be managed in the next five years
10. Letter of acceptance from the proposed custodian
11. Experience of related companies in relation to fund management
12. A completed self-assessment readiness checklist specified by the SC
13. A duly completed form for the application of compliance officer (at least one)

Additional supporting details for the application for fund management in relation to
portfolio management lodged by a company owned by individuals
14. Declaration on loans and credit facilities, pursuant to subparagraph 4.04(5) of the
Licensing Handbook

Additional supporting details for the application for dealing in unit trust products, dealing
in private retirement schemes, investment advice, advising on corporate finance, and/or
financial planning
15. A completed self-assessment readiness checklist specified by the SC

Others
16. Other relevant documents

FORM 8: APPLICATION FOR VARIATION OF REGULATED ACTIVITY FOR

REPRESENTATIVE
No. Description
1. A copy of the individual's relevant academic certificate(s) attained after the
representative’s licence was granted
2. A copy of the relevant industry examination results / professional certificates and
membership
3. Other relevant documents

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 Appendix 3: Supporting Documents

FORM 9: APPLICATION FOR VARIATION OF PRINCIPAL BY REPRESENTATIVE

No. Description
1. Declaration from the company attesting to the fit and proper standing of the
CMSRL holder applicant, in accordance with section 65 of the CMSA
2. A copy of the approval letter of transfer from the exchange
3. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)

Supporting details for variation of regulated activity

4. A copy of the individual’s relevant academic certificates
5. A copy of the relevant industry examination results / professional certificates and
membership

Others
6. Other relevant documents, e.g. a copy of the order of annulment from the High
Court or a copy of the letter of discharge by the Malaysian Department of
Insolvency or, if outside Malaysia, the competent authority

FORM 10: APPLICATION FOR CHANGE OF ENTITY'S NAME

No. Description
1. Evidence of the approval of the Companies Commission of Malaysia for the name
reservation
2. Other relevant documents

FORM 11: APPLICATION FOR CHANGE OF INDIVIDUAL'S BUSINESS NAME

No. Description
1. Evidence of the approval of the Companies Commission of Malaysia for the name
reservation
2. Other relevant documents

FORM 12: APPLICATION FOR CHANGE OF SHAREHOLDERS /

SHAREHOLDINGS
No. Description
1. Describe your overall ownership structure before and after the proposed change
in the form of a tree diagram depicting the following details:
(a) Shareholding structure; and
(b) Percentage of shareholdings of each shareholder.
2. Detailed write-up, which covers, among others—
(a) purchase consideration, source of funding, and other transaction details; and
(b) elaboration on how it may impact board composition, management, strategic
direction, operations, reporting structure, and staff composition of the CMSL
holder.
3. Other relevant documents

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 Appendix 3: Supporting Documents

FORM 13: NOTICE OF CHANGE OF SHAREHOLDERS / SHAREHOLDINGS

No. Description
1. Describe your overall ownership structure before and after the change in the form
of a tree diagram depicting the following details:
(a) Shareholding structure; and
(b) Percentage of shareholdings of each shareholder.
2. Detailed write-up, which covers, among others—
(a) purchase consideration, source of funding, and other transaction details; and
(b) elaboration on how it may impact board composition, management, strategic
direction, operations, reporting structure, and staff composition of the CMSL
holder.
3. Lodgement under section 68 of the Companies Act 2016: Annual Return
4. Lodgement under section 105 of the Companies Act 2016: Instrument of Transfer
of Shares
5. Other relevant documents

FORM 14: NOTICE OF APPOINTMENT OF DIRECTOR / LICENSED DIRECTOR /

CHIEF EXECUTIVE / KEY MANAGEMENT / COMPLIANCE OFFICER /
RESPONSIBLE PERSON / COMPANY SECRETARY
No. Description
1. A copy of the individual's NRIC (for Malaysian citizen) or passport(s) (for non-
Malaysian citizen)
(must be crossed out with the remark "For the SC Use Only")
2. A recent passport size colour photograph
3. A copy of the individual's relevant academic certificates
4. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)
5. Details of securities sold/purchased by the appointee for his/her own account
during the last 12 months immediately preceding the date of this submission
6. A copy of the individual's work permit (for non-Malaysian citizen)
7. Company information from the Companies Commission of Malaysia, containing
details of directors / officers
8. Other relevant documents

NOTICE OF CHANGE IN ENTITY’S PARTICULARS

[Formerly Form 15: Notice of Change in Company’s Particulars]
No. Description
Supporting details for change in name
1. Lodgement under section 28 of the Companies Act 2016: Application for Change
of Name

Supporting details for change in registered address

2. Lodgement under section 46 of the Companies Act 2016: Notification of Change
in the Registered Address

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 Appendix 3: Supporting Documents

Supporting details for change in business address

3. Declaration on the physical layout of the business to avoid conflict of interest

Supporting details for a new branch and/or branch closure (for dealing in securities
and/or dealing in derivatives); establishment of new business or acquisition of shares /
interests in or outside Malaysia (for capital market-based and non-capital market-based
activities), and disposal of business or shares / interests in or outside Malaysia, including
closure of business
4. A copy of the letter of approval from the relevant authority / regulatory or
supervisory body
5. Evidence of the approval of the board of directors and/or shareholders (where
applicable)

Others
6. Other relevant documents

NOTICE OF CHANGE IN INDIVIDUAL'S PARTICULARS

[Formerly Form 16: Notice of Change in Individual’s Particulars]
No. Description
Supporting details for change in name
1. A copy of the approval letter from the National Registration Department

Supporting details for change in business name and/or business address

2. A copy of the approval letter from the Companies Commission of Malaysia

Others
3. Other relevant documents

NOTICE OF CHANGE IN REPRESENTATIVE'S PARTICULARS

[Formerly Form 17: Notice of Change in Representative’s Particulars]
No. Description
Supporting details for change in name
1. A copy of the approval letter from the National Registration Department

Supporting details for change in passport

2. A copy of the passport

Supporting details for change in remuneration type

3. A copy of the approval letter from the company

Others
4. Other relevant documents

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 Appendix 3: Supporting Documents

FORM 18: NOTICE OF CESSATION OF CAPITAL MARKETS SERVICES LICENCE

No. Description
1. Relevant documents, including a copy of the written confirmation by the licence
holder that the cessation has been performed in accordance with section 81 of the
CMSA, and any other information as may be required by the SC
(the physical licence, if applicable, shall be returned to the SC upon cessation)
2. Other relevant documents

FORM 19: NOTICE OF CESSATION OF CAPITAL MARKETS SERVICES LICENCE

(INDIVIDUAL)
No. Description
1. Relevant documents, including a copy of the written confirmation by the licence
holder that the cessation has been performed in accordance with section 81 of the
CMSA, and any other information as may be required by the SC
(the physical licence, if applicable, shall be returned to the SC upon cessation)
2. Other relevant documents

FORM 20: NOTICE OF CESSATION OF CAPITAL MARKETS SERVICES

REPRESENTATIVE'S LICENCE
No. Description
1. A copy of the representative's resignation / termination letter or relevant document
(the physical licence, if applicable, shall be returned to the SC upon cessation)
2. Other relevant documents

FORM 21: NOTICE OF CESSATION FOR DIRECTOR / CHIEF EXECUTIVE / KEY

MANAGEMENT / COMPLIANCE OFFICER / RESPONSIBLE PERSON / COMPANY
SECRETARY
No. Description
1. Lodgement under section 58 of the Companies Act 2016: Notification of change in
the Register of Directors, Managers and Secretaries
2. A copy of the individual’s resignation / termination letter
3. A copy of the acceptance letter from the exchange
4. Other relevant documents

FORM 22: NOTICE OF PLACE AT WHICH REGISTER OF SECURITIES IS TO BE

KEPT
No. Description
1. Any relevant document(s)

FORM 23: NOTICE OF CHANGE OF PLACE OR CESSATION OF KEEPING OF

REGISTER OF SECURITIES
No. Description
1. Any relevant document(s)

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 Appendix 3: Supporting Documents

FORM 24: APPLICATION FOR COMPLIANCE OFFICER

[Deleted]

FORM 25: NOTICE OF CESSATION FOR COMPLIANCE OFFICER

[Deleted]

FORM 26: APPLICATION FOR ESTABLISHMENT OF A NEW BUSINESS OR

ACQUISITION OF SHARES / INTERESTS IN OR OUTSIDE MALAYSIA
No. Description
1. A copy of the letter of approval from the relevant authority / regulatory or
supervisory body
2. Evidence of the approval of the board of directors and/or shareholders (where
applicable)
3. Other relevant documents

FORM 27: APPLICATION FOR APPOINTMENT OF CHIEF EXECUTIVE / KEY

MANAGEMENT
[Deleted]

FORM 32: PROFILE OF INDIVIDUAL SHAREHOLDER OF CAPITAL MARKETS

SERVICES LICENCE HOLDER
No. Description
1. A copy of the individual’s NRIC* (for Malaysian citizen) or passport(s)* (for non-
Malaysian citizen)
(must be crossed out with the remark “For the SC Use Only”)
2. A recent passport size colour photograph
3. Detailed curriculum vitae / professional profile of the individual
(must be consistent with the information provided in this form)
4. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)
5. A copy of the individual's work permit* (for non-Malaysian citizen)
6. Other relevant documents
* To be certified as a true copy by a notary public / solicitor / company secretary

FORM 33: APPLICATION FOR APPOINTMENT OF LICENSED DIRECTOR /

CHIEF EXECUTIVE / KEY MANAGEMENT / COMPLIANCE OFFICER
No. Description
1. A copy of the individual's NRIC (for Malaysian citizen) or passport(s) (for non-
Malaysian citizen)
(must be crossed out with the remark “For the SC Use Only”)
2. A recent passport size colour photograph
3. A copy of the individual’s relevant academic certificates

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 Appendix 3: Supporting Documents

No. Description
4. A copy of the relevant industry examination results / proof of completion of the
SC Licensing Examination revision courses for the relevant modules / professional
certificates and membership (for compliance officer only)
5. Detailed key performance indicators (KPIs) for the chief executive position
6. Justification for the appointment of chief executive / licensed director
7. Bankruptcy search result from the Malaysian Department of Insolvency or, if
outside Malaysia, the competent authority (no more than 31 days old as at the
date of submission)
8. Details of securities sold/purchased by the applicant for his/her own account
during the last 12 months immediately preceding the date of this submission
9. A copy of the individual's work permit (for non-Malaysian citizen)
10. Other relevant documents

FORM 34: AUDITOR’S REPORT

No. Description
1. Auditor’s report

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 Appendix 4: Fees

Appendix 4

FEES

1. Application and licence fees in respect of the grant and variation of a Capital Markets
Services Licence and a Capital Markets Services Representative's Licence

Capital Markets Services Licence

Activity Fee Payable (RM)
1. Application for a– 50
(a) licence; or
(b) variation of a licence.
2. Submission of anniversary reporting 50
3. Licence fee payable by a licence holder which is a
company, for a period of 12 months or any part thereof
for-
(a) any first regulated activity; 2,000
(b) each subsequent regulated activity. 1,000
4. Licence fee payable by a licence holder which is an 1,000
individual for a period of 12 months or any part thereof for
a regulated activity.
5. Approval of an application for a variation of a licence. 100

Capital Markets Services Representative's Licence

Activity Fee Payable (RM)
1. Application for a- 50
(a) licence; or
(b) variation of a licence.
2. [Deleted] [Deleted]
3. Licence fee payable by a licence holder for a period of 12 200
months or any part thereof, for any number of regulated
activities.
4. Approval of an application for variation of a licence. 100

1A. Fees payable in respect of registration of a person as a trading representative

Activity Fee Payable (RM)

1. Application for registration 50
2. Approval of an application for registration 200
3. Anniversary of registration payable for a period of 12 200
months or any part thereof

2. Other fees

Matter Fee Payable (RM)

1. Lodgement or deposit of documents 20
2. A certified copy of an electronic licence 50
3. Lodgement of any other applications to the SC where no 50
fees are specifically provided

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 Appendix 5: Notification Form on Material Outsourcing Arrangements

Appendix 5

NOTIFICATION FORM FOR MATERIAL OUTSOURCING ARRANGEMENTS

No. Description
1. A notification form signed by either the chief executive or executive director
(please refer to the template at www.sc.com.my) which sets out the following:
(a) A brief description of the material outsourced functions; and
(b) A brief explanation on the rationale to outsource to service provider or
sub-contractor outside Malaysia and explanation on why the particular
function could not be undertaken domestically (if applicable).

2. The notification form and, if applicable, the letter of undertaking from the service
provider(s) or sub-contractor(s) should be directed to:

Intermediary and Fund Supervision

Securities Commission Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
(Attention: Supervision Department)

Copied to (where applicable):

Participants Supervision Division
Regulation
Bursa Malaysia Berhad
2nd Floor Exchange Square
Bukit Kewangan
50200 Kuala Lumpur

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 Schedule 1: Fit and Proper Criteria for Trading Representative and Recognised Representative

Schedule 1

FIT AND PROPER CRITERIA FOR TRADING REPRESENTATIVE AND

RECOGNISED REPRESENTATIVE

The applicant must satisfy the following criteria:

(a) The application for registration was made in accordance with this handbook;

(b) The applicant has not failed to comply with any other requirements of the Act or
any guidelines made under the Act;

(c) Any information or document furnished to the SC is not false or misleading or

from which there is a material omission;

(d) The applicant is not an undischarged bankrupt whether within or outside Malaysia;

(e) No execution against the applicant in respect of a judgement debt has been
returned unsatisfied in whole or in part;

(f) The applicant has not, whether within or outside Malaysia, entered into a
compromise or scheme of arrangement with his creditors, being a compromise or
scheme of arrangement that is still in operation;

(g) The applicant has not—

(i) been charged for any offence in any court of law;
(ii) had any civil action initiated against him in any court of law;
(iii) been convicted, whether within or outside Malaysia, of an offence involving
fraud or other dishonesty or violence or the conviction of which involved a
finding that he acted fraudulently or dishonestly;
(iv) been convicted of an offence under the securities laws or any law outside
Malaysia relating to capital market;
(v) contravened any provision made by or under any written law whether within
or outside Malaysia appearing to the SC to be enacted for protecting
members of the public against financial loss due to dishonesty,
incompetence or malpractice by persons concerned in the provision of
financial services or the management of companies or against financial loss
due to the conduct of discharged or undischarged bankrupts;
(vi) engaged in any business practice appearing to the SC to be deceitful or
oppressive or otherwise improper (whether unlawful or not) or which
otherwise reflects discredit on his method of conducting business; or
(vii) engaged in or has been associated with any other business practices or
otherwise conducted himself in such a way that cast doubt on his
competence and soundness of judgment;

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 Schedule 1: Fit and Proper Criteria for Trading Representative and Recognised Representative

(h) The applicant has satisfied the educational or other qualification or experience
having regard to the nature of the duties he is to perform in connection with being
registered as a trading representative or Recognised Representative;

(i) The applicant is able to act in the best interest of the clients of a CMSL holder
having regard to the applicant’s reputation, character, financial integrity and
reliability;

(j) The SC or the principal is satisfied as to the record of past performance or

expertise of the applicant having regard to the nature of the duties which he may
perform in connection with the activity;

(k) There are no other circumstances which are likely to lead to the improper conduct
of business by, or reflect discredit on the manner of conducting the business of,
the applicant or any person employed by or associated with him for the purpose
of his activities as a trading representative or Recognised Representative;

(l) The applicant will carry on the activities as a trading representative or Recognised
Representative efficiently, honestly or fairly; and

(m) That it would not be contrary to the interest of the public that the applicant be
registered as a trading representative or Recognised Representative.

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 Schedule 2: Checklist for Application for Registration of a Trading Representative

Schedule 2

CHECKLIST FOR APPLICATION FOR REGISTRATION OF A TRADING

REPRESENTATIVE

No. Description
1. Application form for registration of trading representative
2. Evidence that applicant has completed the Familiarisation Programme for
Trading Representative 1 (FPTR 1) and passed the required assessment
3. The principal’s supervision and training framework for the trading
representative
4. Declaration that applicant is fit and proper in accordance with Schedule 1 of
the Licensing Handbook*
5. Bankruptcy search result from the Malaysian Department of Insolvency
6. Letter from the employer confirming that there is no conflict of interest arising
from the appointment of the trading representative with a PO (if applicable)
7. Any other information or document as may be required to be submitted to the
SC such as work permit (if applicable)
8. Fee
(i) Processing fee for registration – RM50
(ii) Upon approval of registration – RM200

* Signed by the applicant and co-signed by the licensed director. In the absence of a
licensed director, the declaration may be signed by a director, the chief executive or
an authorised signatory.

135