17 August 2021
1. | The intention of Paragraph 14 is to include as HNWEs, statutory bodies established pursuant to Federal Legislation or State Enactment whose function or mandate include investment in capital market products. |
2. | Entities such as a “joint management body” established under section 17 of the Strata Management Act 2013 may also fall within the meaning of a “statutory body” for the purposes of Paragraph 14, and thus may qualify as a HNWE. |
3. | Given that the function or mandate of a “joint management body” established under the Strata Management Act 2013 does not include investing in capital market products, such entity is specified by the SC as not qualifying to be a “statutory body” for the purposes of Paragraph 14 and should not therefore be treated as a HNWE. |
4. | The SC may, from time to time, update this Technical Note to include other types of statutory bodies that SC has determined not to be a HNWE for purposes of Paragraph 14. |
Calculation of “net personal investment” and “net joint investment” | |
1. | Paragraph 16(d) categorises as a HNWI, an individual whose total net investment portfolio (whether personally, or jointly with his or her spouse), in any capital market products exceeds RM1 million or its equivalent in foreign currencies. |
2. | In this regard, the SC wishes to clarify that the phrases “total net personal investment portfolio” and “total net joint investment portfolio” in Paragraph 16(d) refer to an individual’s total personal or total joint investments (with his / her spouse), in capital market products, less any liabilities related to such investments. Accordingly, an individual’s total net investment portfolio would be the total investments in any capital market products less any borrowings under any margin account for and/or any other borrowings taken for the capital market products in which the individual has invested. |
Source of funds for investments in capital market products | |
3. | For purposes of Paragraph 16(d), an individual must have total net investments (whether personally, or jointly with his/her spouse) in capital market products which exceeds RM1 million or its equivalent in foreign currencies in order to be deemed as a HNWI. |
4. | The SC wishes to clarify that in this regard, the source from which the funds used for such investments is immaterial as long as the individual’s total net investments in capital market products exceeds RM1 million. |
5. | Accordingly, in order to be deemed as a HNWI, an individual may invest in capital market products using, for example, the funds in his/her EPF Account 1, personal savings and/or any other source of funds as long as his/her total net investments exceeds RM1 million. Illustration 1: Illustration 2: Illustration 3:
Mohamad will not be deemed to be a HNWI notwithstanding that his total investments in capital market products exceeds RM1 million. This is because Mohamad’s total net investment portfolio in capital market products would only amount to RM900,000 (being his total investments of RM1.1 million less the RM200,000 personal bank loan). |