Under the Capital Markets and Services Act 2007 (CMSA), anyone wishes to carry out capital market activities (unless a registered person) is required to be appropriately licensed. The Securities Commission Malaysia (SC) is the sole licensing authority that approves licences for capital market intermediaries to be engaged in the regulated activities.
Under the CMSA single licensing regime, capital market intermediaries that are fit and proper is issued with only one licence that will enable them to carry on one or more regulated activities.
The SC is entrusted with the responsibility of ensuring an efficient and transparent licensing process and that the licensed intermediaries and its representatives are competent and proficient in providing their services the investors. Certified as an ISO 9001:2008 department, the SC’s Authorisation & Licensing Department undertakes the assessment of licence applications under its purview within the time frame stipulated in accordance with its ISO performance standards.
There are two main types of licensing applications, namely-
- New Capital Markets Services Licence (CMSL) – granted to a principal
- New Capital Markets Services Representative’s Licence (CMSRL) – granted to a representative to enable him to carry on any one or more regulated activities on behalf of his principal
The assessment process for these applications is shown above.
CMSL holders are required to submit forms via the Electronic Licensing Application (ELA) System (ELA) for:
i. Annual Reporting for Authorisation of Activity (ARAA); and
ii. Fit and Proper Compliance Report by Licensed Corporation.
All other forms need to be submitted via the ELA System for the respective applications as stated in the SC’s Licensing handbook. Access to the ELA system is provided only to licensed CMSL holders.
Licensing Application Kits are available on the SC’s website. For applications to be assessed and approved in accordance with the SC’s client charter, the submission made must be accurate, complete and meet the requirements of the Licensing Handbook. The SC monitors licencees’ continuous compliance with the provisions of the securities laws, licensing requirements and other conditions.
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Who are licensed by the SC
The SC issues 2 types of licences namely CMSL and CMSRL for the following regulated activities:
- Dealing in securities
- Dealing in derivatives
- Fund management
- Dealing in private retirement scheme*
- Advising on corporate finance
- Investment advice
- Financial planning
*Agents and employees of a holder of a CMSL for dealing in private retirement scheme will not be required to hold a CMSRL. However, they must be registered with the Federation of Investment Managers Malaysia (FIMM) and comply with any provision or guidelines issued by the SC.