CLIENT ASSET REPORT FOR FUND MANAGEMENT COMPANIES
1. What is the objective of the Client Asset Report?
As part of the SC’s enhancement of client asset protection measures, `Auditor’s Report on Client Assets‘ (Client Asset Report) is to report fund management companies’ compliance to client asset requirements as stipulated in the Capital Markets and Services Act 2007 and the Guidelines on Compliance Function for Fund Management Companies.
2. What is the scope of the Client Asset Report?
The scope of the Client Asset Report is for mandates with custodial requirements only. Therefore, the Client Asset Report is not required to cover the collective investment schemes (e.g. unit trust funds) that the fund management companies managed.
3. Who is permitted to prepare and issue the Client Asset Report and what is the format of reporting?
The Client Asset Report is to be prepared and issued by an external auditor who will conduct `Agreed-Upon Procedures‘ over its client asset protection measures. A sample report has been disseminated to all fund management companies via the Electronic Licensing Application (ELA).
4. Can the statutory auditor be the same auditor issuing the Client Asset Report?
The auditor for the Client Asset Report can be the same as the statutory auditor since this `Agreed upon Procedures‘ should be performed concurrently with the annual audit of the fund management companies’ financial statements.
5. Can the auditors modify the Client Asset Report?
Auditors are not allowed to modify the report as it is based on the Malaysian Approved Standards on Related Services, ISRS 4400 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information. The auditors are required to address all the procedures and the auditors are to report accordingly if it is not applicable,. The auditors may include an attachment together with the report for additional clarification.
6. Can the fund management company’s Internal Auditor issue the Client Asset Report?
No, the Client Asset Report must be issued by an external auditor.
7. When must the Client Asset Report be submitted to the SC?
The Client Asset Report is to be submitted annually, and three months after the fund management company’s financial year end. For example, companies with 31 December financial year end will need to submit to the SC by 31 March in the following year.
8. Who do the fund management companies submit the Client Asset Report to?
Head of Investment Management Supervision
Compliance and Examination
Securities Commission Malaysia
No 3, Persiaran Bukit Kiara
50490, Kuala Lumpur
Updated 3 December 2013