Kuala Lumpur, 8 July 2015
SC Introduces Measures To Enhance Competitiveness of Fund Management Industry
New Category of Licence for Boutique Fund Management Companies

The Securities Commission Malaysia (SC) today announced liberalisation to its rules governing the fund management industry, allowing the establishment of boutique fund management companies through a more facilitative structure.

With immediate effect, parties with niche fund management expertise can be licensed as boutique fund management companies with a paid-up capital of RM500,000 as compared to RM2 million for a full-fledged fund management licence.

In line with SC’s regulatory philosophy that advocates proportionality of regulation, licensing requirements are tiered according to the size and scale of business and clientele. Boutique fund management companies can manage assets up to RM750 million with a clientele of not more than 50 sophisticated investors.

As at May 2015, total assets under management in Malaysia stood at RM662 billion from RM377 billion in 2010. Fund management industry is the fastest growing segment in the capital market, registering a compounded annual growth rate of more than 10 per cent over the last five years.

To further enhance business efficiency, the range of permissible activities for fund management companies will also be broadened to provide investment advice to clients. Marketing activities by licence holders will be liberalised. As part of a phased approach, marketing, sales and client servicing activities by fund management companies can now be undertaken by representatives registered with the SC, in addition to licensed representatives.

The SC also introduced restricted dealing licences specifically for offering of securities and over-the-counter bonds via online platforms, giving investors wider access to the capital market through innovative business models driven by technology.

The updated Licensing Handbook and Guidelines for Registered Person are available on the SC website.