Introduction
This FAQs is with reference to Section 69 of the Capital Markets and Services Act 2007 (CMSA) and Paragraph 6.06 of the Licensing Handbook on the variation of a Capital Markets Services Representative’s Licence (CMSRL). The CMSA allows a CMSRL holder to change principal and/or regulated activity, which would require the license holder to apply for a variation in his/her licence. The following FAQ serves as a guide to the application process.
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1. |
What are the circumstances when I need to vary my CMSRL? |
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You will need to vary your licence when there is a change in your principal or a change in your regulated activity. A change in principal is when a CMSRL holder transfers from one principal to another as a result of changing licence company. A change in regulated activities is when a CMSRL holder adds or reduces the regulated activity that he/she is currently undertaking. |
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| 2. |
How do I apply to vary my CMSRL? |
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To change your principal, the company that you intend to join needs to submit Form 9 – ‘Application for Variation of Principal by Representative’. To change you regulated activities, you will need to submit Form 8 – ‘Application for Variation of Regulated Activity for Capital Markets Services Representative’s Licence’. The applications will have to be accompanied by the relevant supporting documents, as described in Form 9 and Form 8 in the appendix of the Licensing Handbook. |
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| 3. | If I intend to vary my principal, | |
| a. | When should I submit the application? | |
You must submit your application while still at your current company i.e. before your transfer. The variation of principal will not be permitted, if the application for the variation of principal is submitted after your transfer date. If you have already transferred to your new company, you will need to apply for a new licence through Form 3 – ‘Application for New Capital Markets Services Representative’s Licence’. The application will need to be accompanied by the relevant supporting documents, as described in Form 3 in the appendix of the Licensing Handbook. Your licence must be valid at the time you apply to vary your principal. Your must not allow the licence to be ceased or expired during this time. |
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| b. | How long before the transfer should my application be submitted? | |
| You can only join the new company upon receiving approval of your variation application. In this regard, please allow sufficient time for situation of incomplete documentation in considering the SC’s approval period in (c) below. | ||
| c. | How long does it take to approve the variation application? | |
| The SC will aim to process the application within 14 days from the date of complete submission. | ||
| d. | What are the obligations of my current employer? | |
| Your current company will have to return your existing physical license when the application for variation of principal has been approved. It need not lodge or make any other application or notification to the SC. | ||
| e. | What happens, if while waiting for the approval of my variation of principal, my current company submits a notice of cessation of my licence? | |
| Your current company has to withdraw the notice of cessation immediately. If, however, your application for cessation has been accepted, you will need to submit a fresh application via Form 3 – ‘Application for New Capital Markets Services Representative’s Licence’ at your new company. The application will need to be accompanied by the relevant supporting documents, as described in Form 3 in the appendix of the Licensing Handbook. | ||
| f. | Will my current company be informed on the change of my principal? | |
| Your current company will receive an email notification once the application of variation of principle has been approved. | ||
| 4. | Apart from varying the principal, can I also vary the regulated activity in one application? | |
Yes, provided that you’ve met the necessary requirement stated in the Licensing Handbook such as the relevant SC Licensing examinations, qualification and working experience. The company that you intend to join will need to submit Form 9 – ‘Application for Variation of Principal by Representative’. You need to clearly state your current and proposed activity(ies) in the application form. The application will need to be accompanied by the relevant supporting documents, as described in Form 9 in the appendix of the Licensing Handbook. |
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| 5. | If my current regulated activity is Dealing in Securities and Trading in Futures Contract, but my new company has only Dealing in Securities, can I still do a variation of principal? | |
| Yes, but the transfer is with respect to the regulated activity of Dealing in Securities only and the regulated activity of Trading in Futures Contract is deemed ceased. | ||
| 6. | What are the fees involved? | |
| The fee to vary your CMSRL is RM150.00, of which RM50.00 is for the processing fee and RM100.00 is for the approval of the variation. | ||
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.
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1. |
What is the rationale for the introduction of the Temporary Licence? |
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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. |
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| 2. |
Who can apply for a temporary licence? |
Refer to Question 9 on foreign licensed company with a related company present in Malaysia. |
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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? |
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The individual applying for a Temporary Licence must satisfy the following qualification requirements:
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| 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? |
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A foreign licensed company with a related company present in Malaysia is one which:
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| 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? |
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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:
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. |
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| 11. | Who can be the local sponsor for the temporary licence holder? |
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The local sponsor for the temporary licence holder may be one of the following:
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| 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? |
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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:
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| 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. | |
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20. |
How long does it take for SC to approve my application? |
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Our processing time is 7 working days from the date of submission of a complete set of application. |
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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? |
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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. |
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22. |
What is the scope of permissible activities of a temporary licence holder? |
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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. |
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23. |
Are Temporary Licence holders allowed to solicit, market or distribute products in Malaysia? |
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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. |
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24. |
What are the circumstances where an individual need not seek a Temporary Licence? |
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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:
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