Technical Note No. 2/2024 - Clarification on Recognition of Foreign Auditor Who Audits Foreign Fund
5 August 2024
Currently, pursuant to subsection 31N(1) of the Securities Commission Malaysia Act 1993 (SCMA), an auditor who audits a public interest entity or schedule fund is required to be registered or recognised by the Audit Oversight Board (AOB).
A schedule fund includes a foreign fund that is recognised by the SC by virtue of paragraph (b), Part 2, Schedule 1 of the SCMA1. As such, a foreign auditor of a foreign fund that is recognised by the SC must be recognised by the AOB (AOB Recognition Requirement).
However, the SC is cognisant that currently a foreign fund is subject to the requirements under the Guidelines for the Offering, Marketing and Distribution of Foreign Funds (OMD Guidelines) in order to be recognised by the SC. In recognising the foreign fund that is assessed and primarily regulated by the securities regulator in its home jurisdiction as provided under the OMD Guidelines, it is not the SC’s intention to impose the AOB Recognition Requirement on the auditor of the foreign fund under subsection 31N(1) of the SCMA.
As such, the AOB Recognition Requirement is not required under subsection 31N(1) of the SCMA for an auditor who audits a foreign fund recognised by the SC provided that the foreign fund complies with the OMD Guidelines and unless otherwise determined by the SC.
Paragraph (b), Part 2, Schedule 1 of the SCMA specifies a unit trust scheme approved, authorised or recognised by the SC under the Capital Markets and Services Act 2007 (CMSA) as a schedule fund.
The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.
