Investment Management and Products

Collective Investment Schemes and Private Retirement Schemes

In 2023, equity fundraisings continued to register a higher number of equity applications submitted to the SC, compared to 2022. Out of the 22 equity applications received by the SC in 2023, nine of which were for initial public offerings (IPOs), two in relation to a proposed acquisition resulting in a significant change of business direction or policy, and 11 for transfer of listings to the Main Market of Bursa Malaysia Bhd (Bursa Malaysia)

TABLE 9

Applications for collective investment schemes¹ and private retirement schemes

(ii) Applications	Considered		Approved
(ii) Applications	2023	2022	2023	2022
Authorisation of collective investment schemes Unit trust funds Exchange-traded funds Real estate investment trusts	22 22² - -	40 39³ - 1	22 22 - -	40 39 - 1
Authorisation of private retirement funds	4	16	4	16
Exemption/variation from guidelines	5	2	5	2
Other applications	20⁴	31⁵	20	30
Registration of prospectuses/disclosure documents	304	126	304	126
Registration of deeds	303	221	303	221
TOTAL	658	436	658	435

Note:
Consists of unit trust funds, exchange-traded funds, real estate investment trusts and wholesale funds.
Includes 7 funds which were also qualified as SRI funds.
Includes 6 funds which were also qualified as SRI funds.
Includes 5 applications seeking qualification as SRI funds.
Includes 20 applications seeking qualification as SRI funds.

In 2023, the SC considered 658 applications relating to collective investment schemes (CIS) and private retirement schemes (PRS), comprising applications to establish new funds, register prospectuses and disclosure documents, register deeds and other ancillary matters. This is an increase of 50.9% compared to 436 applications considered in 2022, primarily due to an increase in the registration of deeds, prospectuses and disclosure documents. The management companies of unit trust funds and exchange-traded funds, as well as PRS providers, updated these documents during the year, ahead of the end of the transitionary period for compliance with certain provisions of the relevant CIS guidelines⁸ in 2023 (Table 9).

The SC also received 44 lodgements in relation to wholesale funds under the Lodge and Launch Framework for Unlisted Capital Market Products (LOLA Framework) for sophisticated investors, compared to 45 in 2022.

TABLE 10

Service charter performance – CIS

Service	Measure	Target	Results
Authorisation of new unit trust fund	Decision issued within: 10 business days from the date of receiving the complete submission (for submission under the expedited approval process) 21 calendar days, excluding public holidays (for submission received under the standard authorisation process) subject to the management company having fully addressed all the SC’s comments	90%	99%	99%

Service

Measure

Target

Results

2023

2022

Authorisation of new unit trust fund

Decision issued within:

10 business days from the date of receiving the complete submission (for submission under the expedited approval process)
21 calendar days, excluding public holidays (for submission received under the standard authorisation process) subject to the management company having fully addressed all the SC’s comments

90%

99%

The SC had revised the Guidelines on Unit Trusts Funds in December 2021, Guidelines on Private Retirement Schemes and Guidelines on Exchange-Traded Funds in September 2022 to promote competitiveness and innovation within a balanced and proactive oversight regime.

Investment Products

TABLE 11

Structured warrants considered

Structured warrants	2023	2022
No. of eligible issuers	7	7
No. of base prospectuses registered	7	7
No. of supplementary prospectuses registered	20	22
No. of term sheets registered	1,515	1,456

In 2023, the SC registered 1,515 term sheets for the offering of structured warrants, representing a 4% increase from 1,456 term sheets registered in 2022 (Table 11). Further, one new eligible structured warrants issuer registered its first structured warrants term sheet in 2023. These developments highlight the structured warrants market’s role in Malaysia’s capital market ecosystem, offering investors a wide range of investment opportunities as investors continue to seek avenues for portfolio diversification and potential returns.

TABLE 12

Service charter performance – investment products

Service	Measure	Target	Results
Service	Measure	Target	2023	2022
Registering a base prospectus for the offering of structured warrants	Registration of base prospectus before the intended date of the base prospectus, upon receipt of a complete application at least 14 market days prior to the intended date of registration of the base prospectus	100%	100%	100%
Registering a supplementary base prospectus for the offering of structured warrants	Registration of supplementary base prospectus before the intended date of the supplementary base prospectus, upon receipt of a complete application at least three market days prior to the intended date of registration of the supplementary base prospectus		100%	100%
Registering term sheets for the offering of structured warrants	Registration of term sheet before the intended date of the term sheet, upon receipt of a complete application at least one market day prior to the intended date of registration of the term sheet		100%	100%

Mitigating Systemic Risks And Promoting Financial Stability

Enhanced Risk Governance Framework

In 2021, the SC-wide risk governance framework was enhanced as part of an overall initiative to have an effective integrated and predictive risk surveillance to maintain regulatory agility.

The structured risk governance framework integrated the wider spectrum of risks such as technology, cyber and conduct risk at the SC’s Systemic Risk Oversight Committee (SROC) and Accounting, Market and Corporate Surveillance Committee (ACMS).

Intensified surveillance

The SC continued to intensify its surveillance of systemic risk to maintain market resilience and stability. Regular SROC engagements were held to deliberate concerns emanating from various segments across the capital market. Domestic equity and bond market, foreign fund flows and trade participation continued to be monitored closely for potential stress points.

In addition, measures and economic stimulus packages introduced by the government to weather the impact of COVID-19, market trading conduct and the financial position of listed companies were among the focus areas for discussion.

Thematic assessments

The SC also conducted thematic assessments covering investors’ fund flows, the position of firms, and policy decisions to ascertain the possible impact on the capital market. In 2021, the SC reviewed and enhanced its crisis indicators on potential emerging risks in the
capital market.

The enhanced crisis indicators provided a reference point for escalation to SROC when the identified indicators and triggers materialised and ensured prompt response to manage and prevent any issues of concern that might lead to a systemic crisis.

Joint regulatory discussions

In 2021, the SC conducted frequent joint regulatory discussions with other authorities such as Bank Negara Malaysia (BNM) and Labuan Financial Services Authority (Labuan FSA) to identify systemic risk concern areas within the financial and capital markets in Malaysia.

Monitoring of various components of the capital market

The SC continued its efforts to undertake a methodological and integrated approach to ensure any potential systemic risk was being monitored, mitigated, or managed. Figure 1 highlights the findings from the following risk assessments on the various components of the capital market.