FAQ on Licensing
  • Electronic Licensing Application (ELA) Frequently Asked Questions

    Introduction

    ELA Frequently Asked Questions (FAQs) deals with the frequent questions posed by ELA users. This FAQ is formulated to assist ELA users concerning ELA applications. It provides guidance to users on the technical areas of ELA including accessing ELA, login, troubleshooting with ELA and other issues.

    Access to the ELA System
    1. How do I become an ELA user?
      Upon your company obtaining a CMSL, the SC will send an “Electronic Licensing Application (ELA) System – Terms and Conditions of Use and ELA User ID & Password” letter together with Acceptance of Terms and Conditions and Market Participant User ID Request form to your Executive Director. These forms should be completed and returned to the SC, to provide ELA access to the authorised persons.
    2. What is the difference between ELA administrator and ELA user?
    ELA administrator is responsible to update the company’s ELA system, managing its users, disseminating information of ELA announcements to users, amending ELA users’ profiles, reassigning sign on passwords and other administrative details on ELA use. ELA users update the information in ELA system when needed and liaise with the ELA administrator if they encounter problem in the system.
    3. I am already an ELA administrator. How do I apply for a new ELA user?
    You may mail to us the Market Participant User ID Request form and a letter of Application for a new User ID. The form is already included in the “Electronic Licensing Application (ELA) System – Terms and Conditions of Use and ELA User ID & Password” letter that was given to you after obtaining the CMSL. If you have lost the form, you may request the softcopy by emailing ELA Helpdesk.
    4. Is there any limit of requesting new User ID?
    You can request up to 5 User IDs only.
    5. Can I share my User ID with another person?
    No. The User ID cannot be used by anyone other than the person it is assigned to without the expressed prior written consent of the SC.
    6. What is the procedure if I want to change an ELA user?
    You may mail to us the Market Participant User ID Request form and a letter of application for a new User ID.
    7. I want to access to the ELA system from my office. What are the PC requirements?
    Basically you require 6 items:
    • PC with scanning device
    • Printer
    • Microsoft Words (minimum version 1997)
    • Internet connection
    • Web browser (Internet Explorer version 6.0 and above)
    • Email account for each user
    8. I only have dialup connection to connect to the Internet. Will that suffice?
    It is recommended to use Broadband, ISDN or ISP leased line for Internet connectivity. Please contact your IT personnel to ensure that Internet access is not too congested.
    9. Why do I need a scanner?
    It is recommended that you connect a scanner to the PC and to the network. The scanner is used to scan your documents, i.e. financial statements, which need to be submitted via the ELA system. Please contact your IT personnel to set up the sharing environment so that companies which have more than one ELA users can share the scanner.
    10. Why do I need an email account?
    All notifications from the ELA system will be sent to your email account that you had provided. As such, it is recommended to use your company’s email account. Please contact your IT personnel if you do not have an email account.
    11. Can I access the ELA system outside my office?
    Yes, it is accessible outside your office. To access the system, you need an Internet connection and Internet Explorer (web browser) version 6.0 and above.
    12. Can I use any web browser to access to ELA system?
    You can only use Internet Explorer version 6.0 and above to access our system. This is very important because it ensures information and forms appear correctly on your PC.
    LOGIN ISSUES
    1. I am an ELA user. I have been locked out of the ELA system and unable to login. How do I request for a new password?
    You may ask your company’s ELA Administrator for a temporary password.
    TROUBLESHOOTING
    1. I received an email from the ELA system stating that my top up has been validated but when I try to open it, a message box appears displaying the message “Can’t open this item. Your Digital ID name cannot be found by the underlying security system”. How do I fix this?
    Most likely the error message box appears due to your antivirus software and/or PC Certificate Store:
    • Antivirus System

    Check if all PCs that have access to that email can open the email. If all PCs cannot open the email, check if your antivirus software works with Exchange Server. Some antivirus software may have scanning issues for signed emails. Please refer to your IT personnel or the antivirus software vendor.

    • PC Certificate

    Check for your PC’s PC Certificate store under “Trusted Root Certificate Authorities” if “VeriSign Trust Network” is available and has not expired.

    Please refer to your IT personnel if these solutions do not solve the problem.

    2. When I print a form, the form is not displayed. Instead, an “Information Bar” window pops up displaying the message “Did you notice the Information Bar? The Information Bar alerts you when Internet Explorer blocks a popup window or file download that might not be safe. If a Web page does not display properly, look for the Information at the top of the page and click it.” What should I do?
    The “Information Bar” window pops up because your popup blocker in your Internet Explorer automatically blocks the popup window of the form. To permanently enable ELA popup windows, you have to modify the popup blocker settings. Please follow these steps:
    • Open Internet Explorer
    • Go to the menu bar and click Tools > Popup Blocker > Popup Blocker Settings
    • Under the “Address of website to allow:”, type ers.seccom.com.my/ela
    • Click Add. Under “Allowed sites:”, you can see that ers.seccom.com.my/ela is already included in the list
    • Click Close
    3. I am in the mailing list for applications updates from ELA Helpdesk but have not received any updates. What should I do?
    This could happen due to your network server problem, mailbox full or change of email. Please ensure that your server is up at all times and ensure that you have sufficient mailbox storage. Also, please notify by emailing to ELA Helpdesk if you want to change your email address.
    4. I have been trying to access to ELA system for four consecutive hours but the page just won’t open. What is happening?
    Most probably you’re having problem with your Internet connection. Please refer to your IT personnel to rectify this.
  • Setting up an Islamic Fund Management Company in Malaysia
  • Variation of Principal/Regulated Activity by CMSRL Holders
  • Undertaking of Regulated Activites by Unlicensed Foreign Capital Market Intermediaries
  • Continuing Professional Education (CPE) Programme
  • Lodgement of Auditor’s Report
  • Temporary Licence

    Introduction

    The Temporary Licence framework is to allow individuals regulated by relevant foreign regulators to carry on regulated activities in Malaysia for a short period of time (6 months). This FAQ provides clarification on the criteria, scope of permissible activities and the requirements before being allowed into Malaysia to carry out regulated activities. This FAQ is to be read in conjunction with the Capital Markets And Services Act 2007 (CMSA) and the Licensing Handbook.

    1.

    What is the rationale for the introduction of the Temporary Licence?

     

    The Temporary Licence is to provide local issuers and sophisticated investors with access to high end services which may not be readily available domestically. At the same time, the SC envisages for such arrangements to assist in the capacity building of local licensed companies, in terms of training and transfer of skills. The temporary licence framework should not be used to replace or undermine the Capital Markets Services Licence (CMSL). If the temporary licence holders foresee frequent visits to Malaysia or a longer period required to undertake regulated activities, the temporary licence holder and his employer may perhaps need to consider applying for the appropriate licences.

    2.

    Who can apply for a temporary licence?

     
    • Individuals who are not residing in Malaysia; and either;
    • Individuals working with a foreign licensed company, which has a related company present in Malaysia. The individual may apply for any of the activities the local company is licensed for. For example, advising on corporate finance, investment advice, financial planning, dealing in securities, trading in futures contracts and fund management; or
    • An employee of a foreign licensed company that does not have a related company in Malaysia, can apply for advising in corporate finance or investment advice.

    Refer to Question 9 on foreign licensed company with a related company present in Malaysia.

    3.

    I understand from the Handbook that a foreign licensed company may be considered for a temporary Capital Markets Services Licence (CMSL) or a temporary Capital Markets and Services Representative’s Licence (CMSRL) if it satisfies the conditions set out in paragraph 2.04 of the Handbook. My company is currently licensed in its home jurisdiction. Can we submit an application for a temporary CMSL for my company?

      As a matter of policy, the SC will only grant Temporary Licence to individuals and not to companies. If you are an employee of a foreign licensed company and you are coming to Malaysia on behalf of your company, you may submit an application for a Temporary Licence if you can satisfy the conditions set out in paragraph 2.04 of the Handbook. You can download the application form for a Temporary Licence here (pdf).
    4. What are the qualification requirements for an individual applying for Temporary Licence?
     

    The individual applying for a Temporary Licence must satisfy the following qualification requirements:

    • The individual is appropriately licensed, reqistered or approved in its home jurisdiction;
    • The regulation of the foreign licensed company by its home regulator is sufficiently equivalent to the regulatory framework of the SC;
    • There are effective co-operation arrangements between the home regulator and the SC. Effective co-operation arrangements include:
      • Prompt sharing of information by the relevant home regulator; and
      • Effective co-operation on supervision, investigation and enforcement.
    5. Who can the Temporary Licence holder provide their services to in Malaysia?
      Temporary Licence holders are only allowed to service institutional and sophisticated investors.
    6. Does the foreign licensed company that the applicant for temporary licence is attached with need to be registered with the Companies Commission of Malaysia (CCM) before applying for a Temporary Licence?
      This is not applicable, as the SC will not grant a temporary licence to foreign companies. However, take note that the Companies Act, 1965 requires any foreign company desiring to establish a place of business or to carry on business within Malaysia, to register itself with CCM.
    7. Can I apply for a Temporary Licence as a provisional licence while I am awaiting approval for my CMSRL?
      The Temporary Licence is not meant to be used as a provisional licence while an applicant is waiting for approval of a permanent licence. Those who intend to conduct a regulated activity on a regular basis must apply for a CMSRL through a CMSL holder and may proceed to commence business only after the CMSRL has been approved.
    8. What kind of regulated activities am I allowed to carry out under the Temporary Licence?
      If you are an employee of a foreign licensed company that has a related company present in Malaysia, you may apply to carry on the regulated activities of “advising on corporate finance”, “investment advice” or any of the other regulated activities that the local company is licensed by the SC to carry on. However, if you are an employee of a foreign licensed company that does not have a related company present in Malaysia, the type of regulated activities that you may apply for is limited to “advising on corporate finance” or “investment advice”.
    9. What do you mean by a foreign licensed company with related company present in Malaysia?
     

    A foreign licensed company with a related company present in Malaysia is one which:

    • belongs to the same group of companies which has a local subsidiary in Malaysia; and
    • this local subsidiary in Malaysia is a CMSL holder.
    10. I am an employee of a foreign licensed company which does not have a related company present in Malaysia. However, I have been appointed by a local company in Malaysia (e.g. ABC Properties Sdn Bhd) to advise on the corporate finance angle for a new infrastructure project being developed by the company. Can I apply for a Temporary Licence?
     

    Yes, you can apply. As mentioned above, since you are attached with a foreign licensed company with no related company present in Malaysia, the range of regulated activities available is limited to “advising on corporate finance” and “investment advice” as defined in Schedule 2 of the CMSA. In granting the Temporary Licence, the SC will also be assessing the following:

    • your specialised knowledge and expertise; and
    • the value proposition you bring to the project which you have been engaged for in Malaysia and how it contributes to the overall development of the capital market in Malaysia.

    In your application, you must provide the name of a local monitoring officer who is attached with the local company in Malaysia. In your case, your monitoring officer must be attached with ABC Properties Sdn Bhd (your local sponsor). More information on the role of a local monitoring officer is found in the answer to question 18.

    11. Who can be the local sponsor for the temporary licence holder?
     

    The local sponsor for the temporary licence holder may be one of the following:

    • The local licensed company, if the foreign licensed company has a related company present in Malaysia; or
    • The local client who appointed the foreign licensed company or
    • A Registered Person under Schedule 4 of the CMSA
    12. I am currently working for a Labuan based company. Can I apply for a Temporary Licence if I want to conduct business within Malaysia?
      No. The Temporary Licence is not permitted for Labuan based companies. If you want to conduct your activities in Malaysia, you will be required to hold a Capital Markets and Services Representative’s Licence (CMSRL). At the same time, your principal will also be required to hold a CMSL under the CMSA.
    13. I am currently employed with a foreign licensed company that has related company present in Malaysia. I understand from the Handbook that my sponsor is required to have at least two CMSRL holders for each of its regulated activities. Can I apply for a Temporary Licence to satisfy this requirement?
      No, only a permanent CMSRL holder can satisfy this requirement.
    14. Do I have to pass any licensing examinations before my Temporary Licence is granted by the SC?
      No. You do not need to pass any licensing examinations for the Temporary Licence.
    15. How long is my Temporary Licence valid for?
      A Temporary Licence issued by the SC is valid for a period of 3 months, with a further extension of 3 months within 24 months. The period refers to working days in Malaysia and effective from date of the first visit. This means that your Temporary Licence will expire after your working days in Malaysia has reached 3 months in total, and not 3 months from the date of approval of your Temporary Licence.
    16. Should my work assignment take more than six (6) months, can I apply for further extensions based on reasonable grounds?
      In the event that you want to carry on a regulated activity for more than six (6) months, you should apply for the appropriate licence with a Capital Markets Services Licence (CMSL) holder.
    17. Can a temporary licence holder apply for a further extension of more than 6 months?
      No. The temporary licence framework is intended for a temporary period and if the temporary licence holder requires more than 6 months, it may be appropriate to consider applying for the appropriate licence with a CMSL holder.The foreign licensed company should also not undermine the licensing framework by replacing the first holder with another person to avoid applying for a Capital Market Services Licence. The SC will note among others the number of persons applying for a temporary licence and the nature of work carried out. The SC may not approve further temporary licences for the representatives of the foreign licensed company.
    18. How will the SC monitor the activities of a Temporary Licence holder?
     

    The SC will require your activities to be monitored and reported to the SC on a half-yearly basis or as when the SC deems appropriate. For this purpose, your monitoring officer is:

    • The local subsidiary’s compliance officer (if your home employer has a related company present in Malaysia); or
    • A person who is attached with your local sponsor who is able to monitor your activities in Malaysia and reports to the SC (if your home employer has no related company present in Malaysia).
    19. What is the information that the monitoring officer is expected to provide in the half yearly reports to the SC?
      The temporary licence holders are expected to provide their details activities to the monitoring officer to enable the monitoring officer to report to the SC. The report should include details of the activities undertaken, clients and follow up action to be undertaken. The monitoring officer should also make comparison with the information submitted in the first application and identify the changes and reasons for the changes.

    20.

    How long does it take for SC to approve my application?

    Our processing time is 7 working days from the date of submission of a complete set of application.

    21.

    Does an applicant who is applying for a temporary licence require a ‘reverse inquiry’ to occur as a condition for the SC to grant the temporary licence?

    No. A reverse inquiry need not be a pre-requisite for the application of a temporary licence.Reverse inquiry occurs when a local company or individual seeks out the service of a foreign licensed company or its representative, who are outside Malaysia. In this regard, the foreign licensed company or representative performs the service outside Malaysia.

    22.

    What is the scope of permissible activities of a temporary licence holder?

    It is expected that a foreign licensed person is seeking a temporary licence to undertake a specific project or assignment. The activities in Malaysia cannot for example include marketing of products or services. Typically, these services are required on a temporary basis. In this regard, the applicant must demonstrate that he has specialised knowledge and expertise and the value proposition that the application brings to the project.

    23.

    Are Temporary Licence holders allowed to solicit, market or distribute products in Malaysia?

    No. For products to be distributed in Malaysia, it must first receive the relevant approvals from the SC. The Temporary Licence is not intended for persons to distribute products in Malaysia.

    24.

    What are the circumstances where an individual need not seek a Temporary Licence?

    With reference to paragraph 2.04 of the Licensing Handbook, if the individual is invited by a local licensed company to provide support and training for a particular product, he will not be required to hold a licence provided that:

    • The individual has an arrangement with the local licensed company;
    • All marketing activities are conducted by the CMSL holder;
    • The regulated activity is carried out by the local licensed company who takes full responsibility and accountability for any marketing or provision of investment advice for the product;
    • The individual does not distribute any of his own promotional materials to the clients of the local licensed company; and
    • The individual is appropriately licensed, registered or approved in his home jurisdiction.
  • Single Licensing Regime
  • Capital Markets and Services Act
  • Clarification on Individuals Undertaking the Activities of Distributing and Marketing of Unit Trust
    Introduction

    This FAQ provides clarification and guidance to Question 8 of the current FAQ on the Single Licensing Regime (In Reference to the Licensing Handbook). The Question prescribes that a registered person dealing in unit trust and attached to a UTMC cannot be attached to another principal.

    Following the FAQ with regard to the position of unit trust consultants, the SC has received several enquiries requesting for further clarification on the implementation of Question 8 and other issues with regard to individuals licensed for financial planning and interns attached to licensed financial planning firms.

    1. Can a Unit Trust Consultant who is attached to a UTMC, CUTA or IUTA, be allowed to distribute unit trust products of other UTMCs, CUTAs or IUTAs?
      No. A Unit Trust Consultant (UTC) is not permitted to market and distribute unit trust products other than the products of his principal, to which he is attached to.

      A UTC is only allowed to market and distribute the products of its Principal, which may be a UTMC, CUTA or a IUTA. He cannot distribute products of another UTMC at the same time.

      This is to ensure that the UTC provides dedicated advice to the investor with respect to his principal’s products.
    2. Can a Unit Trust Consultant be attached to more than one UTMC?
      No. As mentioned above, a UTC can only be attached to one UTMC and cannot distribute unit trust products directly or indirectly of other UTMCs. He should also not have other arrangements to distribute products of other UTMCs.
    3. Are employees of the IUTA, who are registered as UTCs with FIMM allowed to distribute unit trust funds independent of their employers?
      No. The employees of a IUTA who are UTCs by virtue of their responsibilities in the IUTA, cannot become a UTC and attach themselves independently with any UTMC, CUTA or IUTA.
    4. Can an individual who holds a financial planning license and is a unit trust consultant, attach himself to more than one UTMC?
      No. A UTC can only be attached to one UTMC, as its Principal. The individual, who holds a financial planning license, should distribute the unit trust products of his Principal and pursuant to a financial plan. This is consistent with the approach as described in Question 1 and 2 above.
    5. Can an individual who holds a financial planning license, who intends to become a CUTA continue to be attached to a UTMC?
      No. The Financial Planning license holder must detach himself or herself from the UTMC prior to the CUTA seeking registration with FIMM. The CUTA can be attached to several UTMCs. As mentioned in Question 1 above, the CUTA and its representatives can only distribute unit trust products pursuant to a financial plan and with respect to the products of the UTMCs that the CUTA has arrangements with.
    6. Are interns of a CUTA allowed to be registered as UTCs with FIMM either to distribute unit trust products on behalf of the CUTA or to distribute unit trust products independent of the CUTA?
      No. An intern is not allowed to become a UTC, regardless of whether it is in his or her capacity as an intern of the CUTA or independent of the CUTA. This requirement is consistent with the framework for CUTAs, which does not allow the individual licensed financial planning representative to have an arrangement with UTMCs. This also follows the principle of interns assisting the financial planners of a CUTA and must not operate to avoid the requirement for FPs of CUTAs to be detached from UTMCs.

    January 2010

  • The Capital Market and Services (Amendment) Act 2011
  • Removal of Anniversary Reporting for Authorisation of Activity and Non-Issuance of Physical Licence
  • FAQ on Capital Market Director Programme
  • FAQ on the Revision to the Guidelines for Registered Person (Registered Representative)
  • FAQ on the Revision to the Licensing Handbook
  • What actions have Securities Commission Malaysia (SC) and other authorities taken to stop the Swisscash programme from operating?
    The SC had blocked 4 websites related to Swisscash namely www.swisscash.net, www.swisscash.biz, www.swissmutualfund.biz, and www.swisscashguide.com.

    The SC had on 21 June 2007 obtained a worldwide Mareva injunction against the operators of the Swisscash internet investment scheme, preventing them from disposing their assets in and outside of Malaysia.

    The Mareva order restrains and prohibits the defendants from:
    • carrying on the business of Swisscash, 
    • targeting, soliciting and collecting funds from the public for investments in Swisscash or any other internet investment scheme, 
    • hosting or operating the Swisscash websites or operating any other such websites which solicit investments for Swisscash or any other internet investment scheme and 
    • removing from Malaysia any of their assets which are in Malaysia 
    The Mareva injunction also requires the defendants to disclose information pertaining to all their assets in and outside Malaysia, the companies they have incorporated and the bank accounts they operate.

    The SC has taken action against 3 individuals, namely Albert Lee Kee Sien (Albert), Kelvin Choo Mun Hoe (Kelvin) and Amir Bin Hassan (Amir) as well as 3 companies namely Dynamic Revolution Sdn Bhd, Swiss Mutual Fund (1948) S.A., SMF International Limited and SMF (1948) International Limited. We believe that these individuals mentioned are the operators of the scheme in Malaysia.

    On 25 September 2008, SC obtained judgment against Albert, Kelvin and their companies in the amount of USD83 million and such further amounts as may be traced for payment. The SC, with the help of other regulators and enforcement agencies has frozen the bank accounts of the defendants in various other jurisdictions. The SC is now working with overseas regulators and enforcement agencies to repatriate these funds back to Malaysia.
  • Have any monies been recovered against the perpetrators of the scheme?
    Currently some of the monies involved in the scam have been frozen and is in a stakeholder’s account in Malaysia. The rest of the defendants’ monies are currently located in various foreign bank accounts and the SC is actively working with the relevant authorities in those countries to have those monies brought back to Malaysia.
  • Are any of the monies belonging to the defendants held by the SC?
    No, the SC is not holding any of the monies belonging to the investors. Monies in Malaysia are currently being held by a stakeholder. The rest of the monies are in foreign bank accounts.
  • Where are all the overseas monies currently being held?
    The monies that the SC is aware of and have traced are in bank accounts in Singapore, Isle of Man, Jersey, Switzerland and Australia.
  • When will the SC be able to get the monies from abroad so that I can get my money back?
    The money involved in this scam is subject to several court proceedings, not all of which have been concluded. Moreover, the money involved in the scam is located in various bank accounts of the defendants who were sued by the SC. Some of these bank accounts are in countries other than Malaysia and would involve the regulatory authorities and local laws of these jurisdictions. As such, the process of repatriation of the monies to Malaysia will take time.
  • What are the efforts that are being taken by the SC to secure the monies abroad?
    The SC is currently working with overseas regulators and enforcement agencies to repatriate these funds back to Malaysia. As different jurisdictions have different laws governing the monies frozen in their jurisdictions, the repatriation of these monies would require us to follow various local laws and procedures. Some jurisdictions have initiated action to forfeit the monies in their jurisdiction. For example Australia has initiated action under its Proceeds of Crime Act 2002 and if the Australian government’s action is successful, the monies in Australia will be forfeited.
  • How will the SC know who is eligible to make claims for the money which they lost in this scheme?
    Currently the SC is collating a list of the people who have suffered loss as a result of the scheme. This is based on the complaints which we have received up to now from the affected members of the public. Additionally, we plan to place advertisements in various newspapers calling for claims to be made against the sums of money which are recovered.
  • If I had previously submitted a complaint and provided supporting documents, will I need to resubmit the information again after the SC places the advertisements calling for claims to be made?
    If you have previously made a complaint to our Investor Affairs and Complaints department and have submitted supporting documents, you will not need to do so again unless you have any additional information or documentary evidence supporting your claim.
  • Who is eligible to be compensated from the money which the SC recovers?
    We will submit a criteria to the court for its endorsement before any payment is made. The criteria will include the following: Eligible persons would be those who have sufficient proof of their principal investment and who have not been involved in the scam as recruiters and upliners. Where profits have been made from their initial investments, such profits will be deducted from the claim sum. Claimants would have to show documentary proof of their investments in the scheme. Additionally, there will be other criteria such as whether they invested in the scam despite the warnings by the authorities.
  • Who will decide on whether I get my money back?
    The criteria for eligibility as mentioned above will be submitted to the court for its approval.
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