2.01 What is a CMSL and a CMSRL?
2.02 What are regulated activities?
2.08 In what situation is a licence not required?
3.01 What is the status of registered persons under the CMSA?
3.02 Who is a registered person?
3.03 Who is responsible for supervising registered persons?
4.05 What are the requirements for a CMSRL?
4.06 What are the requirements for key management of a CMSL holder and compliance officer?
6.02 What is the electronic licensing application system?
6.03 What is our commitment?
6.04 How to apply for a new licence?
6.06 How to vary a licence?
6.07 How much is the application and licence fee?
6.08 How to withdraw an application?
6.09 What information requires notification to the SC after being licensed?
6.10 What other submissions can be made through ELA?
What are the conditions and restrictions in relation to a CMSL holder?
What are the conditions and restrictions in relation to a CMSRL holder?
How to collect CPE points?
What is the CPE-ITI requirement?
What is the time frame given to comply with the CPE-ITI requirement?
How does ITI relate to the CPE requirement?
How will the CMSA treat existing licensed persons?
restrictions on the date the CMSA takes effect?
What happens to licensing applications made before 28 September 2007?
granted under SIA or FIA?
(c) the application procedures.5 . Under this new regime. This will mean less cost and paperwork for capital market intermediaries who carry on more than one regulated activity.03 The Capital Markets and Services Act 2007 (CMSA) repeals the Securities Industry Act 1983 (SIA) and the Futures Industry Act 1993 (FIA).02 1. (f) Guidelines for Futures Trading Advisers and Futures Trading Adviser's Representatives Under the FIA. and (d) ongoing obligations imposed on licensed persons. (b) the criteria to be met for applying and varying a licence. 1. (e) Guidelines for Futures Fund Managers and Futures Fund Manager's Representatives Under the FIA. (g) Guidelines for Submission Through the Electronic Licensing Application System. a capital market intermediary will only need one licence to carry on the business in any one or more regulated activities.Introduction Chapter 1 INTRODUCTION 1. (b) Guidelines for Fund Managers and Fund Manager's Representatives Under the SIA. This handbook sets out– (a) the single licensing regime under the CMSA. (d) Guidelines for Futures Brokers and Futures Broker's Representatives Under the FIA. and (h) Guidelines on Permitted Activities for Stockbroking Companies. including conditions and restrictions attached to a licence. (c) Guidelines for Investment Advisers and Investment Representatives Under the SIA. This handbook will replace the following guidelines: (a) Guidelines for Dealers and Dealer's Representatives Under the SIA. The CMSA which takes effect on 28 September 2007 introduces a single licensing regime for capital market intermediaries.01 1.
CMSL means Capital Markets Services Licence. not less than 15% of the votes attached to the voting shares in the CMSL holder. or control the exercise of. CMSRL means Capital Markets Representative's Licence. and 2.e.04 Acronyms and Definitions For the purposes of this handbook: Back office function means any administrative or operational function other than a regulated activity as specified under Schedule 2 of the CMSA BNM means Bank Negara Malaysia. chief executive. CMSR means the Capital Regulations 2007. (b) has the power to appoint or cause to be appointed a majority of the directors of the CMSL holder. means the principal executive officer of the corporation for the time being. Business Trust has the same meaning as provided for under section 2(1) of the CMSA Chief Executive Officer has the same meaning as defined by the CMSA i. Unless otherwise defined. compliance officer means the principal person responsible for compliance function Markets Services Services has the same meaning as defined under section 60(7) of the CMSA. in relation to a corporation. all words used have the same meaning as defined by the CMSA. 1. by whatever name called and whether or not he is a director. This handbook is issued pursuant to section 377 of the CMSA and has the effect of a guideline issued by the Securities Commission Malaysia (SC). which means a person who– controller (a) is entitled to exercise. including administrative actions against licensed persons. The SC can institute an action against any person contravening the requirements specified in this handbook.Licensing Handbook Note that: 1. or (c) 1-6 has the power to make or cause to be .
Introduction made. management company as defined by the CMSA non-participating organisation (nonPO) means a holder of a CMSL for the regulated activity of dealing in securities but is not a participating organisation of the stock exchange. under the immediate authority of a director or chief executive of the body corporate.7 . which is. group means the CMSL holder's direct or ultimate holding company or any of its related corporations investment bank (IB) means an entity that holds a CMSL pursuant to section 58 of the CMSA for the regulated activity of dealing in securities and a merchant bank licence pursuant to section 5 of the Banking and Financial Institutions Act 1989. risk management. exercises managerial functions or is responsible for maintaining accounts or other records of the body corporate. outsourced functions means back office. compliance functions and any other function that may be determined by the SC. in relation to a body corporate. derivatives exchange has the same meaning as provided for under section 2(1) of the CMSA. internal audit. external auditor means an auditor who is not the current statutory auditor appointed by the CMSL holder. and duly established pursuant to the Guidelines on Investment Bank issued jointly by BNM and the SC. means a person who is appointed by the body corporate to manage any part of its business and includes an employee of the body corporate (other than the chief executive) who. and to give effect to such decisions or cause them to give effect to. decisions in respect of the business or administration of such CMSL holder. manager has the same meaning as provided in section 60(8) of the CMSA. 1.
real estate investment trusts (REIT) or "property trust fund" means unit trust scheme that invests or proposes to invest primarily in income-generating real estate service provider sophisticated investors means persons falling within paragraph 9. stock exchange sub-contracting 1-8 means an entity within the group or an external entity to which the CMSL holder has outsourced the outsourced functions and includes any subsequent service provider(s) to whom the initial service provider or any subsequent service provider has further contracted the outsourced functions. participating organization (PO) means any person who carries on the business of dealing in securities and is recognised as a participating organisation by the rules of the stock exchange and the terms "participant" and "participantship" shall be construed accordingly. has the same meaning as provided for under section 2(1) of the CMSA. 10 or 11 of Schedule 6 of the CMSA. special scheme fund manager means a holder of a CMSL for the regulated activity of fund management established pursuant to the Application for Establishment o f Foreign Fund Management Companies Under the Special Scheme. policy on permitted activities for stockbroking companies means the Policy on Permitted Activities for Stockbroking Companies as set out under Appendix 1 of this handbook. stockbroking company means a holder of a CMSL for the regulated activity of dealing in securities and is registered as a participating organisation under the rules of the stock exchange and the terms "stockbroker" or "broker" shall be construed accordingly. special scheme broker means a foreign stockbroking company established pursuant to the Application for Establishment o f Foreign Stockbroking Companies Under the Special Scheme. means the act of further contracting any outsourced functions or a sub-component of .Licensing Handbook outsourcing arrangement means any arrangement for the outsourcing of outsourced functions between a CMSL holder and a service provider or a sub-contractor.
universal broker (UB) means a stockbroking company that has merged with or acquired at least three other stockbroking companies and has satisfied all the conditions and requirements stipulated by the SC under the Policy Framework for Stockbroking Industry Consolidation. taken-over. 1.9 . amalgamated or merged with at least one other stockbroking company. trading participant shall have the same meaning as provided by the rules of the futures exchange. 1+1 broker means a stockbroking company that has complied with the Policy Framework for Stockbroking Industry Consolidation and has acquired.Introduction that function to another service provider.
In this instance. and whether there are inherent conflicts arising from simultaneously carrying on the activities. it is unlikely that you will be allowed to carry on dealing in securities and advising on corporate finance. if you wish to carry on the regulated activity of financial planning. be required to sit for any additional licensing examination for your dealing activities. Note 3 If your activity of corporate finance also involves assisting your principal in its underwriting arrangements. You will not. For example. i. advising on corporate finance and dealing in securities. if you are an employee of an investment bank licensed to carry on the full range of regulated activities. you will need to be licensed for the two regulated activities. and • Capital Markets Services Representative's Licence (CMSRL) which entitles an individual to carry on any one or more regulated activities on behalf of his principal. Note 2 The combination of activities that a representative is allowed to carry on depends on the nature of the activities. both at the same time. Only a holder of a CMSL or a CMSRL can carry on any of the regulated activities that the CMSL or CMSRL permits.01 What is a CMSL and a CMSRL? (1) (2) The CMSA provides for two types of licences: • Capital Markets Services Licence (CMSL) which entitles an institution to carry on the business in any one or more regulated activities. 2-10 . Note to representatives: Note 1 You can only carry on regulated activities that your principal is licensed to carry on.e. including dealing in securities and advising on corporate finance activities. however.Licensing Handbook Chapter 2 LICENCES UNDER THE CMSA 2. then your principal must be licensed to carry on that activity. For example. your dealing capability will be restricted to the underwriting arrangements that relates to the transaction which you had provided corporate finance advice on.
both CMSLs and CMSRLs will continue to have obligations on the anniversary of their licenses. • Dealing in private retirement schemes.Licences Under the CMSA Obligations on anniversary of licence (3) The licence of CMSL and CMSRL holders is valid in perpetuity. 2. • Advising on corporate finance. and • Financial planning. However. • advising on corporate finance. In this case. • Fund management. • dealing in derivatives. The licence issued under the CMSA will set out the specific regulated activities that you can conduct. • fund management. and • financial planning. Illustration 1 An investment bank applies to the SC for approval to carry on the full range of regulated activities under the CMSA. • Investment advice. • dealing in private retirement schemes. • investment advice. • Dealing in derivatives. 2-11 . the licence will indicate that the investment bank is allowed to carry on all the following regulated activities: • Dealing in securities.02 What are regulated activities? (1) (2) There are seven types of regulated activities under the CMSA. The list of regulated activities is set out in Schedule 2 of the CMSA. They are– • dealing in securities.
Such principal is required to be a member of or registered with a body approved by the SC. . including: (a) Unit trust management companies.unit trust products (2) If you carry on the business of dealing in unit trust products only. you will be granted a CMSL for dealing in securities. Dealing in securities . including equities. (b) A CMSL holder licensed for fund management who also wishes to deal in unit trust products.general (1) If you carry on the business of dealing in securities. i.e. a restricted CMSL for dealing in securities that permits you to deal in unit trust products only. You may deal in all securities. In this case. the licence will indicate that the broker is allowed to carry on all the following regulated activities: • Dealing in securities. • Dealing in derivatives. (c) A CMSL holder licensed for financial planning distributing unit trust products. which is the Federation of Investment Managers Malaysia (FIMM). unit trust products and any other structured product. debentures.Licensing Handbook Illustration 2 A 1+1 broker applies to the SC for approval to carry on the range of regulated activities allowed under the policy on permitted activities for stockbroking companies. • Investment advice. • Dealing in private retirement schemes. • Advising on corporate finance. and (d) (4) 2-12 Any other person as the SC deems appropriate.03 Licences for dealing in securities Dealing in securities . 2. (3) The requirement to obtain a CMSL for dealing in unit trust products is only applicable to a principal who deals in unit trust products. and • Financial planning. you will be granted a CMSL for dealing in unit trust products.
(b) Unit trust management companies. Licences for Dealing in private retirement schemes (1) The requirement to obtain a CMSL for dealing in private retirement schemes is only applicable to a principal who deals in private retirement schemes. (e) A CMSL holder licensed for dealing in securities. which is the Federation of Investment Managers Malaysia (FIMM). (h) An approved Insurance Broker under Section 11 of the FSA 2013 to carry on insurance broking business or approved Takaful Broker under Section 11 of the Islamic FSA 2013 to carry on takaful broking business. you will be granted a CMSRL for dealing in unlisted debt securities. (c) A CMSL holder licensed for fund management.04 If your principal holds a CMSL for dealing in securities and you only deal in unlisted debt securities on behalf of your principal. and (j) Any other person as the SC deems appropriate. (2) (i) Financial advisers licensed under the Insurance Act 1996. However. (f) A CMSL holder licensed for dealing in securities restricted to unit trusts.unlisted debt securities (6) 2. (g) An insurance company licensed under the Financial Services Act (FSA) 2013. including: (a) An approved private retirement scheme provider under the CMSA.Licences Under the CMSA Agents and employees of a holder o f a CMSL for dealing in unit trust products (5) Agents and employees of a holder of a CMSL for dealing in unit trust products only will not be required to hold a CMSRL. provided you are certified by Persatuan Pasaran Kewangan Malaysia (PPKM). 2-13 . Such principal is required to be a member of or registered with a body approved by the SC. Dealing in securities . (d) A CMSL holder licensed for financial planning distributing private retirement schemes. they must comply with the provisions of Chapter 3 on Registered Persons and any other guidelines issued by the SC.
must be a subsidiary of the following: a company involved in the financial services industry in Malaysia.e.Licensing Handbook Agents and employees of a holder of a CMSL for dealing in private retirement scheme or of a Registered Person dealing in private retirement schemes (3) 2. i.07 Agents and employees of a holder of a CMSL for dealing in private retirement schemes or of a Registered Person dealing in private retirement schemes only will not be required to hold a CMSRL. Licences for Fund management in relation to asset management (1) If you carry on the business of a trustee manager only. they must be registered with FIMM and comply with the provisions of Chapter 3 on Registered Persons and any other relevant guidelines issued by the SC. (c) a property-investment holding company. a restricted CMSL for fund management to manage a portfolio of securities or derivatives or a combination of both. you will be granted a fund management in relation to portfolio management licence only. except where the management company is licensed by the SC. (b) In the SC's opinion. If you carry on the business of fund management in relation to portfolio management only. a restricted CMSL for fund management to manage business trust only. the regulation of the foreign intermediary by its home regulator is sufficiently equivalent to the regulation of the SC. (2) If you carry on the business of a REIT manager only. you will be granted a fund management in relation to asset management licence restricted to real estate investment trusts only. (b) a property-development company. (3) The requirement to obtain a fund management in relation to asset management licence restricted to real estate investment trusts is only applicable to a principal who deals in REITs.e. Effective co-operation arrangements will provide for– (c) 2-14 (a) . registered or approved in its home jurisdiction. and There are effective co-operation arrangements between the home regulator and the SC.05 Licences for Fund management in relation to portfolio management (1) 2.06 2.e. i. i. However. or (d) any other person as the SC deems appropriate Temporary licence for foreign intermediaries (1) A foreign intermediary may be considered for a temporary CMSRL provided the foreign intermediary satisfies the following conditions: (a) That the foreign intermediary is appropriately licensed. a restricted CMSL for fund management to manage REITs only. you will be granted a fund management in relation to asset management licence restricted to business trust only.
he will not be required to hold a licence provided that(a) the foreign intermediary has an arrangement or understanding with the (b) all marketing activities are conducted by the CMSL holder. (d) the foreign intermediary does not distribute any of his own promotional materials to the clients of the CMSL holder. We may grant a temporary licence for a total maximum period of six months within a 24-month period. Product support by foreign intermediaries If a foreign intermediary is invited by a CMSL holder to provide support and training for a particular product. (c) intermediation is carried out by the CMSL holder who takes full responsibility and accountability for any marketing or provision of investment advice for the product. the foreign intermediary's home regulatory regime must continue to be sufficiently equivalent to our own regime. The temporary CMSRL granted to the foreign intermediary is subjected to the following conditions: (a) The regulated activities carried out in Malaysia must only be provided to sophisticated investors.Licences Under the CMSA (2) (i) prompt sharing of information by the relevant home regulator. and (ii) effective co-operation on supervision. CMSL holder. 2-15 . registered or approved in his home jurisdiction. registered or approved under its home regulatory regime. (b) The regulated activities carried out in Malaysia must comply with the requirements of the foreign intermediary's home regulatory regime. and (d) In the SC's opinion. (c) Throughout the duration of its licence the foreign intermediary must remain licensed. The 24-month period will commence on the date of issue of the first temporary licence. The foreign intermediary must submit a fresh application for a further three-month period if more time is required to complete the work assignment. investigation and enforcement. (3) The tenure of the temporary CMSRL granted to the foreign intermediary will be for a maximum period of three months. (4) Applications for a temporary CMSRL licence must be made in the form and manner as specified by the SC. (e) the foreign intermediary is appropriately licensed.
2-16 . These situations are set out in Schedule 3 (Specified Persons) and Schedule 4 (Registered Persons) of the CMSA.Licensing Handbook 2. It is important that these activities are carried on within the parameters set out in Schedule 3 and Schedule 4 by Specified Persons and Registered Persons respectively. or where such activities are being performed solely for the benefit of a related corporation or restricted to the activities provided for in Schedule 4.08 In what situation is a licence not required? (1) In a limited number of situations. such as being solely incidental to the carrying on of the practice of their profession. persons or entities may engage in a regulated activity without having to hold a licence.
such as credit rating agencies and bond pricing agencies.02 What is the status of registered persons under the CMSA? (1) Registered persons are allowed to carry out certain regulated activities without having to apply for a CMSL. (c) Individuals registered with a body approved by the SC. (b) Individuals registered with a recognised self-regulatory organisation. be required to comply with certain integral investor protection and conflict management provisions in the CMSA in ensuring that minimum standards of conduct are observed. • licensed Islamic banks. Who is a registered person? (1) Section 76 of the CMSA sets out the following to be registered persons: (a) Persons set out in Parts 1 and 2 of Schedule 4 of the CMSA. (2) Registered persons also include unit trust agents who are registered with the Federation of Investment Managers of Malaysia (FIMM) which is deemed to be a body approved by the SC. • licensed merchant banks. • licensed insurance companies. • registered takaful operators. . • Bank Kerjasama Rakyat Malaysia Berhad. • licensed discount houses. however. and (d) Persons who are registered with the SC. The scope of regulated activities which may be carried out by registered persons are set out in the Second Column of Schedule 4.Licensing Handbook Chapter 3 REGISTERED PERSONS 3. These persons include the financial institutions set out in Schedule 4 of the CMSA and other entities. • licensed finance companies. Financial institutions who are registered persons (2) 3-17 Persons set out in Part 1 of Schedule 4 of the CMSA are– • licensed banks. Financial institutions engaging in regulated activities will.01 3.
3-18 . and (d) Pengurusan Danaharta Nasional Bhd and all its subsidiaries prescribed under subsection 60(2) of the Pengurusan Danaharta Nasional Berhad Act 1998. Other registered persons (4) Registered persons other than financial institution who are described in Part 2 of Schedule 4 are– (a) any venture capital corporation and venture capital management corporation registered under the SC's Guidelines for the Registration o f Venture Capital Corporations and Venture Capital Management Corporations. Such agents and employees are.e. however. (b) any credit rating agency registered under the SC's Guidelines on Registration of Credit Rating Agencies. Individuals registered with a body approved by the SC Agents and employees o f a holder o f a CMSL for dealing in unit trust products (5) Agents and employees who deal in unit trust products on behalf of a holder of CMSL for dealing in unit trust products will not be required to hold a CMSRL.(3) • Bank Simpanan Nasional Berhad. (6) Further. an investment bank (which is licensed merchant bank that also holds a CMSL to carry on the business of dealing in securities) is not a registered person for purposes of the CMSA. (c) any bond pricing agency registered under the SC's Guidelines on the Registration o f Bond Pricing Agencies. required to be registered with a body approved by SC. • Bank Pembangunan. For clarification. these agents and employees must pass the examinations for persons dealing in unit trusts (PDUT) or any other qualification recognised by the FIMM and approved by the SC in order to carry on their dealing in unit trust products. and • KAF Investment Bank Berhad. This is because an investment bank may be licensed as a CMSL holder for all seven regulated activities. i. the FIMM. .
FIMM. (8) Further. 3.Licensing Handbook Agents and employees of a holder o f a CMSL for dealing in private retirement schemes (7) Agents and employees who deal in private retirement schemes on behalf of a holder of CMSL for dealing in private retirement schemes will not be required to hold a CMSRL. 3-19 . 92. required to be registered with a body approved by SC. In supervising such financial institutions. BNM and the SC will co-ordinate to ensure that similar standards and requirements are applied to the financial institutions and the employees with regard to the regulated activities that the financial institutions carry on. 93 and 97 of the CMSA and any regulation or guideline made pursuant to these sections.03 Who is responsible for supervising registered persons? Financial institutions (1) BNM is responsible for supervising this category of registered persons in terms of ensuring that– (a) this category of registered persons complies with the integral investor protection provisions in sections 91. Note to registered persons: Except for the category of registered persons in section 76(1)(b) of the CMSA.e. i. these agents and employees must pass the examinations for persons dealing in private retirement schemes or any other qualification recognized by FiMM and approved by the SC in order to carry out their dealing in private retirement schemes. Such agents and employees are however. Note to financial institutions: The CMSA provides a one-year transitional period from 28 September 2007 for financial institutions to comply with the relevant requirements in the CMSA. and (b) individuals employed by this category of registered persons are fit and proper and that the registered persons maintain a register of these individuals. you do not need to apply for registration with the SC as your registered person status is provided for by operation of law.
or (b) specified in Part 2 of Schedule 4 of the CMSA. (3) The SC may withdraw a registration which has been accorded to a person– (a) who has been registered with the SC. 3-20 . if it is necessary for the protection of investors or public interest or for the maintenance of an orderly market.Other registered persons (2) The SC is responsible for supervising all categories of registered persons other than financial institutions.
transference of skills and efficiency and quality of capital market services. and • Requirements relating to representatives' competencies. • Your shareholding composition.01 Fit and proper (1) Persons who apply to be licensed under the CMSA must be fit and proper. or e) the degree and significance of participation of Malaysians in the capital market. we refer to the following criteria: • Your organisational requirements. as the case may be. 4-21 . the SC is also guided by relevant policies and guidelines. 4. d) ability in developing strategic or nascent sectors in the capital market. b) the risk posed on the systemic stability of the capital market including activities and conduct that will likely impact the orderly functioning of the capital market. c) contribution towards attracting investments.Licensing Criteria Chapter 4 LICENSING CRITERIA 1 2 In authorising any person wishing to undertake capital market activities . enhancing market linkages and promoting vibrancy in the capital market. Authorising includes grant of license. In determining the best interest of Malaysia. the Securities Commission Malaysia will give regard to any one or more of the following: a) the area of specialization and level of expertise that can be offered to the capital market including the effect on productivity. (2) 1 2 Every CMSL applicant will be required to submit its business model and scope of activities that it plans to carry on. the Securities Commission Malaysia will not grant authorisation unless the application is in the best interest of Malaysia. • The adequacy of your financial resources. In assessing if you are fit and proper. registration or approval. such as the policy on permitted activities for stockbroking companies and the Guidelines on Investment Banks. as set out in section 64 and 65 of the CMSA. Capital market activity means any type of regulated activity or capital market services as defined under the Capital Markets and Services Act 2007. In assessing a licence application.
• Fund Management. • Dealing in derivatives. However. • Necessary IT systems and infrastructure.02 Organisational requirements Incorporation (1) If you want to carry on any of the following regulated activities. • Risk management policies and processes. which includes the following: • An organisational structure with clear lines of responsibility and authority. if you want to carry on the regulated activity of financial planning. • Dealing in derivatives. . you may do so either as a company. and • Fund management.Licensing Handbook What are the requirements for a CMSL? 4. If you are a sole proprietor or in a partnership. • Dealing in private retirement schemes. Organisational competence (3) 4-22 As a CMSL applicant. you must ensure that your business is properly established. you will be granted a CMSL but you will not be allowed to have any licensed representative acting on your behalf. you must be a company incorporated in Malaysia: (2) • Dealing in securities. sole proprietorship or partnership. • Advising on corporate finance. and • Investment advice. and • Policies and procedures to ensure compliance with applicable laws and regulations. • Policies and processes on conflict management and the monitoring of unethical conduct and market abuse. • Adequate internal control systems. Member of an alternative dispute resolution body CMSL holders who carry on one or more of the following regulated activities are required to be a member of an alternative dispute resolution body that is approved by the SC under the Capital Markets and Services (Dispute Resolution) Regulations 2010: • Dealing in securities.
Notification on disposal of business or shares/interests in or outside Malaysia (7) A CMSL must notify the SC within 14 days of disposing of a business or shares/interests in or outside Malaysia. chief executive officers. and (b) control procedures in place to monitor any conflict of interest. Fit and proper requirements for directors. In many cases.Licensing Criteria (4) In situations where you want to carry on more than one regulated activity. Prior approval for establishment of new business or acquisition of shares/interests in or outside Malaysia (5) A CMSL must obtain the SC's prior approval when establishing a new business or acquiring shares/interests in or outside Malaysia in relation to capital market-based activities. chief executive officers. managers and controllers of a CMSL applicant General requirements Your directors. (9) Controller has the same meaning as defined under section 60(7) of the CMSA. which means a person who– 4-23 . Prior approval for change in controller (8) You must obtain the SC's prior approval in circumstances where any proposed change to your shareholding will result in a change in your controller. unethical conduct and market abuse. (l) and (m) of the CMSA applies to any of them. managers and controllers must be fit and proper. You must monitor and supervise the activities of your representatives to ensure that they are complying with all requirements of the securities laws. there may be a number of possible ways for you to comply with these obligations. They must also be competent and properly trained to carry on the regulated activity on your behalf and continue to be so. Note to applicants: Your conflict management procedures must be appropriate to the nature. (i). As a CMSL applicant. you must demonstrate that you have– (a) the requisite system and procedures to monitor all relevant activities within your organisation. you must ensure that none of the grounds specified in paragraphs 64(1) (h). Notification on establishment of new business or acquisition of shares/interests in or outside Malaysia (6) A CMSL must notify the SC within 14 days of establishing a new business or acquiring shares/interests in or outside Malaysia in relation to non-capital market-based activities. scale and complexity of your business.
The CEO must act honestly and exercise due skill and diligence and be suitably qualified to assume the position. Prior approval for the appointment of chief executive officers (10) All CMSL holders. However. or control the exercise of. or (c) has the power to make or cause to be made. However. this requirement is not mandatory. you must undertake the necessary due diligence to ensure that the candidate is fit and proper.Licensing Handbook (a) is entitled to exercise. and to give effect to such decisions or cause them to be given effect to. (13) You are required to notify the SC in writing on the appointment or reappointment of a director within two working days of the appointment or reappointment. whichever is earlier. Process flow for the appointment of directors (12) You can appoint directors without prior approval of the SC. The requirement for appointing a licensed director for a regulated activity is to ensure that a person with board representation will be able to provide direction and feedback to the board on issues relating to the carrying on of the regulated activity. (14) We will carry out a post-appointment assessment of directors of a CMSL holder. as well as supervising representatives with respect to such an activity. (11) The CEO is expected to demonstrate the capability and competence to lead the company. N Note to investment banks: Y You will also need to comply with the Guidelines on Investment Banks for the appointment of your directors and chief executive officers. Requirement of a licensed director (15) You must have at least one director with a minimum of 1 0 years' relevant experience in the licensed regulated activity. or prior to any public announcement. 4-24 . your director need not hold a CMSRL. (16) If you are licensed for dealing in unit trust products or dealing in private retirement schemes. (b) has the power to appoint or cause to be appointed a majority of the directors of the CMSL holder. not less than 1 5 % of the votes attached to the voting shares in the CMSL holder. but he must be registered with the FIMM and have a minimum of 1 0 years' relevant experience. before appointing a director. if you are an investment bank. including investment banks should seek the SC's prior approval for the appointment of its CEO. If our assessment reveals that a director is not fit and proper. decisions in respect of the business or administration of such CMSL holder. we may direct you to remove the person from the post. and suitably qualified to assume the position. The director must hold a CMSRL for the regulated activity.
The head must hold a CMSRL and have sufficient authority to supervise the business of the licensed regulated activity. 4-25 . This person must carry out the compliance function pertaining to the securities laws. you must have a head of operations and this person must not be involved in dealing in securities. Your director must show the relevant experience and knowledge in the management of the specific assets invested in by the asset manager. This is to avoid potential conflicts of interest. Requirement for Head o f Operations (23) If you are licensed to carry on the regulated activity of dealing in securities and you are a participating organisation (PO) of the stock exchange. then in addition to the requirement of a licensed director. Requirement for Compliance Officer (24) If you are licensed to carry on the regulated activity of dealing in securities and you are a PO. dealing in derivatives or fund management in relation to portfolio management. you must also have a person with a minimum of eight years of relevant experience to head each additional regulated activity. deal in derivatives or manage funds. He must not deal in securities. Requirement of a head of regulated activity (20) If you are licensed to carry on more than one type of regulated activity. you are required to have a compliance officer.Licensing Criteria (17) If you are licensed for both dealing in unit trust products and dealing in private retirement schemes. or in the management of a class of asset in a unit trust scheme. provided he is fit and proper. This is to avoid any conflict of interest that may arise if such a person deals in securities. (21) An individual can be appointed to be the head of more than one regulated activity. (19) If you are licensed for fund management in relation to asset management. and there is no conflict in him performing such functions. your director must hold a CMSRL for the regulated activity of fund management in relation to asset management restricted to business trust or REITs. (18) If you are licensed for financial planning and for dealing in private retirement schemes. your director must hold a CMSRL for the regulated activity of financial planning and must be registered with FIMM for dealing in private retirement schemes and also have a minimum of 10 years' relevant experience. you can appoint one director who must be registered with FiMM for dealing in private retirement schemes as well as for dealing in unit trust products and also have a minimum of 10 years' experience in the capital market. The requirement for appointing a head for each regulated activity is to ensure that a person with the necessary skills and expertise will provide guidance and supervision to the representatives carrying on that particular regulated activity. (22) If you are an investment bank where it is not mandatory to have a licensed director. regulations and guidelines and any other applicable law governing the regulated activities. a head is required for each regulated activity.
Note to applicants: You must always have adequate and competent personnel for conducting your business efficiently. regulations and guidelines. Bumiputera directors. The specific requirements applicable to a CMSL holder operating as an investment bank are set out in the Guidelines on Investment Banks. (26) Where the regulated activities are carried on through a group of companies. head of operations. compliance officer and head of compliance. you must have at least two individuals who are registered with FIMM.Licensing Handbook Requirement for Head o f Compliance (25) If you are licensed to carry on the regulated activity of dealing in securities and you are an investment bank or a universal broker. If you are licensed for dealing in unit trust products and/or dealing in private retirement schemes. you must ensure that individuals appointed to these positions satisfy the requirements of paragraph 4. representatives and employees composition (30) The composition of your board of directors. However. • a special scheme fund manager. Therefore. representative and employee composition do not apply to an investment bank. Requirement for two CMSRL holders (27) You must have at least two CMSRL holders for each regulated activity. The head of compliance is responsible for overall supervision of compliance with securities laws. you must take immediate steps to recruit a new candidate. and any other applicable law governing the regulated activities. this requirement does not apply if you are – • a special scheme broker. and there is no conflict in him performing such activities. and with the integrity and professional skills appropriate to the nature and scale of your activities. the function of the head of compliance can be centralised. you are required to have a head of compliance. including an Islamic fund management company. (28) A CMSRL holder may be licensed for more than one regulated activity. including a special scheme broker promoting investments from the Middle East. or . provided he is fit and proper. This person must not be involved in dealing in securities.06. the following requirements regarding the Bumiputera director. Director (31) 4-26 You must at all times have a Bumiputera director on your board. If the number of CMSRL holders falls below the minimum requirement of two. representatives and employees must be in accordance with the national policy of Malaysia. (29) Given the importance of the positions of head of regulated activity. honestly and fairly.
at least nine must be Bumiputera. However. or  an approved Insurance Broker under Section 11 of the Financial Services Act (FSA) 2013 that deals in PRS scheme or approved Takaful broker under Section 11 of the Islamic FSA that deals in PRS scheme. you must maintain a minimum of 1 5 % Bumiputera composition of all your remisiers. undertakes derivatives fund management. undertakes fund management in relation to asset management or provides investment advice on derivatives or approved insurance and takaful brokers that deal in PRS scheme. and 4-27 . (33) If you are licensed to deal in securities and you are a PO and employ remisiers (commissioned representatives). Participants of exchange (35) A CMSL applicant needs to become a participant with the relevant exchange for carrying on one or both of the following regulated activities: • Dealing in securities as a PO. at least 30 must be Bumiputera. This requirement is not applicable for the regulated activities of dealing in derivatives. fund management in relation to derivatives. who is licensed to carry on the regulated activities of dealing in securities and dealing in derivatives. However. this requirement does not apply if you are a company which deals in derivatives. undertakes derivatives fund management.Licensing Criteria • a company which deals in derivatives. undertakes fund management in relation to asset management or provides investment advice on derivatives. fund management in relation to asset management and investment advice on derivatives. Employee (34) You must at all times maintain a Bumiputera composition of at least 30% of your employees. the Bumiputera representative composition does not apply to the 20 CMSRL holders licensed to deal in derivatives. Of the 60 commissioned CMSRL holders licensed to deal in securities. Illustration: A CMSL holder. Representative (32) You must at all times maintain at least 30% Bumiputera composition of your representatives for your licensed regulated activities. employs the following number of licensed representatives: Salaried CMSRL holders licensed to deal in securities 40 Commissioned CMSRL holders licensed to deal in securities 60 Total number of CMSRL holders licensed to deal in securities 100 CMSRL holders licensed to deal in derivatives 20 Total number of CMSRL holders 120 Of the total 1 0 0 CMSRL holders licensed to deal in securities.
operational manuals. capital adequacy. please refer to the Application for Establishment of Foreign Stockbroking Companies Under the Special Scheme. Application for Establishment of Foreign Fund Management Companies Under the Special Scheme and any other relevant policies and guidelines as announced or issued by the SC from time to time. (38) The SC may conduct an examination to ascertain the readiness of CMSL applicants to commence business in the regulated activity. (37) The readiness assessment may include the applicant's risk management system. and procedures for compliance with applicable laws and regulations. 4. policies and procedures. You must comply with this composition at all times. when applying to be licensed for a regulated activity or to add on another regulated activity. 1+1 Brokers and Standalone Brokers) No specific shareholding Special Scheme Broker No specific shareholding Unit trust management company No specific shareholding Dealing in derivatives 4-28 No specific shareholding . as the case may be. through the facilities of the stock exchange or the derivatives exchange. information technology.Licensing Handbook • Dealing in derivatives. Table 1 sets out the relevant requirements. Table 1: Shareholding Composition Requirement Dealing in securities Investment Banks Minimum of 30% local shareholding Stockbrokers which are not Investment Banks (Universal Broker.03 Shareholding composition (1) Your shareholding composition for regulated activities depends on the type of regulated activities you offer and the nature of your establishment. (2) For further information on specific schemes. You must obtain an approval in principle from Bursa Malaysia Securities Bhd to become a PO and an approval in principle from Bursa Malaysia Derivatives Bhd to become a trading participant. Readiness assessment (36) A CMSL applicant is required to undertake a readiness assessment by completing and submitting a readiness checklist to the SC or Bursa Malaysia. even if a readiness assessment has been submitted to Bursa Malaysia. These documents also contain information on the permissible activities or restrictions applicable to such companies. internal controls and systems. organisational structure.
as follows: (i) Each of the two shareholders must have at least 1 0 years' relevant experience in the capital market. and (ii) At least one of the two shareholders must have five years' direct experience in fund management in relation to portfolio management activities. you must also satisfy the following: (a) You must be a "related corporation" of an entity regulated by the SC or BNM or such other entities as may be approved by SC. 4-29 .Licensing Criteria Fund management Portfolio managers (which includes management companies of exchange traded funds) No specific shareholding REIT Managers No specific shareholding Investment advice Advising on corporate finance Financial planning Dealing in private retirement schemes No specific shareholding No specific shareholding No specific shareholding No specific shareholding Note to investment banks: You will need to comply with the Guidelines on Investment Banks for your shareholding composition. or (b) If you are a company owned by individuals. Note: This requirement is a continuing obligation and must be maintained even if there are changes to your shareholders and/or your shareholding composition. two of your shareholders whose total shareholding forms the majority ( 5 1 % or more) in the company must have the requisite track record. (3) If you wish to carry on more than one regulated activity. (4) If you wish to carry on the regulated activity of fund management in relation to portfolio management. the highest of the shareholding composition requirement applies.
04 The adequacy of financial resources (1) You must satisfy the minimum financial requirement for a regulated activity and any other requirement specified by the SC or the rules of a stock exchange or a futures exchange. Stockbroking company (other than IB or UB)  Minimum paid-up capital of RM20 million  Minimum shareholders' funds of RM20 million 4-30 . However. (2) The minimum financial requirements for a CMSL are set out in Table 2 . the highest of the minimum financial requirement applies to you. Note to investment banks: Any proposed change to your shareholding will be subject to the Guidelines on Investment Banks 4. Table 2: Minimum Financial Requirements for a CMSL Dealing in securities Investment bank  Minimum capital funds unimpaired by losses of RM500 million or minimum capital funds unimpaired by losses of RM2 billion on a banking group basis  Minimum risk-weighted capital ratio of 8%. the Licensing Department of the SC must be notified within 1 4 days of the occurrence of the event.2 or any other financial requirement as determined by the SC from time to time. and (b) no individual other than a Malaysian citizen may hold up to 1 0 % of the total paid-up capital of a stockbroking company. Notification of other changes to shareholding (6) For changes in shareholding composition or paid-up capital that does not result in a change of controller. the aggregate total participation of individuals in the share capital of the stockbroking company shall not be more than 49% of the total paid-up capital.Licensing Handbook Change in shareholding for a holder of a CMSL for dealing in securities (5) In the case of a stockbroking company that is not an investment bank– (a) a person who wishes to acquire more than 5 1 % of the total paid-up capital of a PO must be a company or corporation with shareholders' funds of not less than RM100 million. Universal broker  Minimum paid-up capital of RM100 million  Minimum shareholders' funds of RM100 million to be maintained at all times  Minimum capital adequacy ratio of 1. (3) If you wish to carry on more than one regulated activity.
1 0 % of aggregate margins required. Such companies may use a nominee system.  Minimum paid-up capital of RM5 million  Minimum shareholders' funds of RM5 million to be maintained at all times. or .RM500. Dealing in unit trust products (a) Applicable to an applicant dealing in unit trust products as a principal business (for own products and/or third-party products). (b) Applicable to persons licensed to carry on the regulated activity of financial planning and who want to deal in unit trust products.000. Holders of a CMSL that open trading kiosks or branch offices  Paid-up capital requirement of RM10 million Portfolio Management  Minimum paid-up capital of RM2 million  Minimum shareholders' funds of RM2 million to be maintained at all times Business Trust  No specific paid up capital REIT  Minimum shareholders' funds of RM1 million at all times 4-31 .000  Minimum shareholders' funds of RM50.  Minimum paid-up capital of RM50.Licensing Criteria to be maintained at all times  M i n i m u m capital adequacy ratio of 1 .000 to be maintained at all times Dealing in Unlisted Debt Securities Advising on Corporate Finance (to carry out the activity of principal adviser)  Minimum shareholders' funds of RM100 million to be maintained at all times Dealing in derivatives Fund management  Minimum paid-up capital of RM5 million • Minimum adjusted net capital: The higher of . Issuing house  Minimum shareholders' funds of RM2 million to be maintained at all times. 2 or any other financial requirement as determined by the SC from time to time.
Once licensed.  Minimum paid-up capital of RM750.Licensing Handbook Advising on corporate finance investment advice Financial planning Dealing in private retirement schemes  Minimum paid-up capital of RM500. For investment advice  Minimum paid-up capital of RM500. you must maintain the minimum financial requirement throughout your licence.000  Minimum net tangible asset of RM50.000 at all times  These companies may not use a nominee system  Minimum paid-up capital of RM5 million  Minimum shareholders' funds of RM5 million to be maintained at all times Applicable to holders of a CMSL for Financial planning only.000 at all times. and  Minimum shareholders' funds of RM2 million to be maintained at all times.000  Minimum net tangible asset of RM50. and  Minimum net tangible assets of RM50. the following financial requirements are relevant: For fund management in relation to portfolio management  Minimum paid-up capital of RM2 million. .000 to be maintained at all times Applicable to Insurance and Takaful Brokers only. you must not continue to carry on the licensed regulated activity without the written consent of SC. Therefore.000 to be maintained at all times  Minimum Professional Indemnity Insurance of RM750.000 Illustration: If you apply for a CMSL to carry on the regulated activities of fund management and investment advice.  Minimum paid-up capital of RM50.000  Minimum shareholders' funds of RM50. The highest of the financial requirement will apply to you and this means that you must have a paid-up capital of RM2 million.000 at all times  Minimum paid-up capital of RM50.000  Minimum shareholders' funds of RM750.000. your shareholders' funds must be maintained at a minimum of RM2 million while you hold the licence. (4) 4-32 If your financial condition falls below the minimum financial requirement.
(7) There are three instances in which we will not apply the general rule on validity of licensing examination. you are required to ensure that your shareholders. you must also pass the relevant licensing modules as set out in Table 4. (b) You have passed the SC licensing examination while under the employment of a CMSL holder. (3) You must provide all relevant information to your principal to enable it to undertake the necessary due diligence before supporting your application. You must ensure that your examination results are valid at the time of your application. we will consider your educational and professional background. loans and other credit facilities extended by banks and financial institutions within or outside Malaysia. 4. provided your application is made within three years from the date you left the industry.Licensing Criteria Clearance on loans and credit facilities (5) If you intend to carry on the regulated activity of fund management and are a company owned by individuals. and 4-33 . If your academic or professional qualification is lacking. If you wish to return to the industry. Licensing examinations (5) In addition to the qualification and experience requirements. These are as follows: (a) You have passed the SC licensing examination while under the employment of a CMSL holder and remain working in the capital market industry. Qualification and experience requirement (4) In assessing your competency to carry on a regulated activity. This is to ensure that you have satisfied the minimum requirements for carrying on the regulated activity. (6) The declaration is to be in a format specified by the SC. The SC reserves the right to verify the information provided. and you resign to take up employment outside the industry before being licensed.05 What are the requirements for a CMSRL? General requirements (1) You must be at least 21 years old. Validity of the licensing examination (6) Your examination result is valid for two years from the date of passing each module of the SC licensing examination. You may apply for a CMSRL without having to resit the licensing examination. we will consider your working experience and previous track records. (2) You must be fit and proper and satisfy yourself that none of the grounds specified under section 65(1) of the CMSA apply to you. you may apply for a CMSRL without having to resit the licensing examination. directors and licensed representatives provide the SC with a declaration that they have satisfactorily maintained their accounts.
or  A diploma in other field of study recognised by the government of Malaysia with at least two years of relevant experience in the capital market. The applicant must have at least five years direct and relevant experience in the capital market.  A degree or professional qualification from an institution recognised by the government of Malaysia with at least two years of relevant experience in fund management in relation to portfolio management activity. You may reapply for a CMSRL to undertake the same regulated activity for which you were previously licensed without having to resit the SC licensing examination. economics.Licensing Handbook (c) You were previously licensed and have left the industry. Dealing in derivatives  A diploma in the relevant field of study. or commerce from an institution recognised by the government of Malaysia. Financial planning Financial Planning Association of Malaysia (FPAM)  The Certified Financial Planner (CFP) / Islamic Financial Planner (IFP) qualification and a member of FPAM. or finance  Applicants without any degree or professional qualification must Investment advice have at least five years of relevant experience in the regulated activity. or Fund management in relation to portfolio management  without any of the above qualifications but has been licensed for at least three years in a recognised jurisdiction to undertake dealing in securities or dealing in derivatives. or  Complete a minimum of 3 modules specifically Foundation in Financial Planning (Module 1). provided your application is made within three years from the date you left the industry.  No specific qualification requirement Fund management in relation to asset management Advising on  A degree or professional qualification from an institution corporate recognised by the government of Malaysia. accounting. the SC may consider an applicant with Sijil Pelajaran Malaysia/Malaysia Certificate of Education or its equivalent with at least four years of relevant experience in the capital market. or  Applicants without any degree or professional qualification must have at least five years of relevant experience in fund management in relation to portfolio management activity. Investment Planning and 4-34 . including finance. In exceptional circumstances. Table 3: Minimum Qualification and Experience Requirement for CMSRL Applicants for Regulated Activities Dealing in securities  A degree or professional qualification from an institution recognised by the government of Malaysia.
Table 4: Licensing Examinations for CMSRL Applicants Dealing in securities Dealing in securities  Applicants must pass the SC Licensing Examination: Modules 6 & 7 or 6 & 1 8 or 7 & 1 7 or 1 7 & 1 8  CFA charter holders are exempted from Module 7 of the SC Licensing Examination Dealing in unlisted debt securities only  Applicants who are certified by Financial Markets Association or Persatuan Pasaran Kewangan Malaysia (PPKM) as eligible Dealing in derivatives  Applicants must pass the SC Licensing Examination: Modules 1 4 & 1 6 or 1 7 & 1 8 or 1 4 & 1 7 or 1 6 & 1 8  CFA charter holders are exempted from Module 14 of the SC Licensing Examination. Investment Planning (Module 3) & Retirement Planning (Module 6). 19A & 19B CFA charter holders are exempted from Module 12 of the SC Licensing Examination  4-35 . The minimum entry requirements set out above are also applicable to individuals who opt to take MFPC's Shariah RFP or FPAM's IFP.Licensing Criteria Retirement Planning (Module 3) and attend the familiarisation programme on Financial Plan Construction and Professional Responsibilities (Module 4) and become an Associate Member of FPAM. or  Complete a minimum of 3 modules specifically Fundamentals of Financial Planning (Module 1). subject to attending a 2-day preparatory course by SIDC Fund management in relation to portfolio management  Applicants must pass the SC Licensing Examination: Modules 9 & 10  CFA charter holders are exempted from Module 10 of the SC Licensing Examination Fund management in relation to asset management  No specific licensing examination required Advising on corporate finance  Applicants must pass the SC Licensing Examination: Modules 12 & 19 or 12. or Malaysian Association of Chartered Financial Consultant (MAChFC)  The Chartered Financial Consultant (ChFC) qualification and a member of the Malaysian Association of Chartered Financial Consultant (MAChFC). or Malaysian Financial Planning Council (MFPC)  The Registered Financial Planner (RFP) / Shariah Registered Financial Planner (Shariah RFP) qualification and an ordinary member of MFPC. obtain a Certificate of Proficiency in Financial Planning and become an Affiliate Member of MFPC.
In this case. and (c) held a senior management position during your tenure in the capital market or the financial services industry or in the regulatory body. 4. For purposes of clarity.06 What are the requirements for key management of a CMSL holder and compliance officer? General requirements 4-36 (1) If you are a candidate for a key management position or compliance officer. head of operations and head of compliance. The sponsoring CMSL holder must be approved by the SC to enter into an arrangement with your principal to facilitate the carrying on of dealing in derivatives. or (b) the sponsoring CMSL holder carrying on dealing in derivatives is– (10) (i) a subsidiary of the holding company of your principal. or (ii) a separately incorporated company held by the individual shareholders of your principal. (2) You must be fit and proper. "key management" refers to the head of regulated activity. (b) spent at least 1 0 years in the capital market or the financial services industry or in a regulatory body which regulates the capital market or the financial services industry and you were directly involved in the area in which you seek exemption. . you must be at least 21 years old.Licensing Handbook Investment advice   Applicants must pass the SC Licensing Examination: Modules 12 & 19 or 12 & 19A CFA charter holders are exempted from Module 12 of the SC Licensing Examination Financial planning  No specific licensing examination required Exemption from the licensing examination (8) You may apply for exemption from the relevant SC licensing examination modules if you are an individual with distinguished service. which includes having– (a) a total of at least 20 years' working experience. and satisfy yourself that none of the grounds specified under section 65(1) of the CMSA applies to you. Dual licence arrangements (9) You will only be considered to carry on both dealing in securities and dealing in derivatives if– (a) your principal is licensed for both dealing in securities and dealing in derivatives as allowed under the policy on permitted activities for stockbroking companies. you will be operating under a dual principal arrangement which requires you to hold separate CMSRL for dealing in securities and dealing in derivatives respectively.
the necessary due diligence to ensure minimum requirements are satisfied.
management personnel or a compliance officer.
within three months from the date of the vacancy.
A licensed director and head of regulated activity are required to hold a CMSRL.
minimum of 1 0 years and eight years of relevant experience, respectively.
management of a class of asset in a unit trust scheme.
modules as set out in Table 6.
 Previously a participant of a recognised exchange.
experience in the capital market.
or 6 & 1 8 or 7 & 1 7 or 1 7 & 1 8 .
activity that they are supervising.
knowledge in their regulated activities.
a specified period of time.
of the CMSA and complies with the following criteria set out below.
or its equivalent in foreign currencies.
You must be a resident of Malaysia.
you are ready to commence your business.
only the licensed partner can carry on financial planning. • If your business is carried out through a partnership. Note to applicants: • Unless specifically mentioned.Licensing Criteria for an Individual Applying for a CMSL to Carry on Financial Planning Malaysian Association of Chartered Financial Consultant (MAChFC)  The Chartered Financial Consultant (ChFC) qualification and a member of the Malaysian Association of Chartered Financial Consultant (MAChFC). the requirements set out under Chapter 4 will not apply to you. you cannot have any licensed representative to act on your behalf. The minimum entry requirements set out above are also applicable to individuals who opt to take MFPC's Shariah RFP or FPAM's IFP. • As an individual CMSL holder. 5-41 .
• application procedures. As licensed persons. • fees to pay for applications or notifications. the Licensing Department of the SC will comply with our clients' charter which is ISO 9001:2008 certified. must be made through ELA. you must ensure that all forms are printed out and duly signed by the relevant persons as indicated in the forms. professional and excellent service through a transparent process in a timely manner.Application Procedures and Fees Chapter 6 APPLICATION PROCEDURES AND FEES 6. are to be made online to the SC via the Electronic Licensing Application system (ELA). you must apply to the SC for access to ELA within three months from the date you obtain your licence. and • time lines to adhere to as licensed persons. (4) As a CMSL holder. chief executives and notification of any material change to information submitted earlier. This is necessary because specific applications and notifications to us. What is the electronic licensing application system? (1) All licensing applications. you must familiarise yourselves with the system. 6-42 . The particulars on your printed copy must be the same in content as that which you will submit through ELA. except for applications for a new CMSL.03 • forms to be used for various applications and notifications. (3) We will notify your application results via e-mail.01 General (1) This chapter will provide you with information on– 6. What is our commitment? (1) In reviewing your licence application. (3) Our clients' charter for processing time is as follows: a) Six weeks for new CMSL applications which are complete upon submission and meet the SC's fit and proper criteria. and b) Two weeks for all new CMSRL applications which are complete upon submission and meet the SC's fit and proper criteria. (2) We are committed to satisfy all market participants by providing quality.02 6. Further information on ELA can be found in Appendix 2. In such cases. and to strive for continuous improvement. including the appointment of directors. we will issue a letter. you must also ensure that sufficient funds in the ELA account are maintained at all times to facilitate any payments or changes on the application or notification made to the SC. (2) When submitting an application or notification to the SC through ELA. except under circumstances where we have grounds for a refusal to grant a licence. (5) In addition.
you must fill the relevant forms outlined in Table 8 to apply for a CMSL or CMSRL to carry on any one or more regulated activities. You must also submit the fees together with the application. you cannot apply through ELA. you must also submit at least two applications for a CMSRL for every regulated activity you intend to carry on as a principal. reputation and competency.04 How to apply for a new licence? (1) Upon satisfying relevant requirements as set out in Chapter 4 or 5. your directors. revocation or cessation of their regulated activities. .Licensing Handbook 6. we may conduct the necessary background checks on you. the SC no longer issues a physical licence. managers. Such an application must be made through your principal. (5) If you wish to apply for a new CMSRL with an existing CMSL holder. All licence persons who hold the physical licences that have been issued prior to this date must return their physical licences to the SC upon variation. who must be responsible for verifying your good character. Instead. Table 8: Forms for New Licences Type of Licence Forms CMSL Form 1: Application for New Capital Markets Services Licence Form 1A: Application for New Capital Markets Services Licence (to be filled by directors/key management/company secretary) Form 1B: Application for New Capital Markets Services Licence (to be filled by directors/key management/company secretary who are also the proposed representative) Form 1C: Application for New Capital Markets Services Licence (to be filled by the first two proposed licensed representatives) CMSL (Individual) Form 2: Application for New Capital Markets Services Licence (individual) CMSRL Form 3: Application for New Capital Markets Services Representative's Licence 6-43 (3) If you wish to apply for a new CMSL. (2) Due to the nature and amount of information and documents required for a new CMSL. details of your new licence will be published at the SC's website under public register of licensed holder at http://www.my/licensing/licensedintermediaries (7) With effect from 1 January 2015. made payable to the "Securities Commission" and sent to the address stated in paragraph (8) of Appendix 2.sc. and controllers to ensure that none of the grounds for refusal of a licence as provided for under sections 64 of the CMSA applies. in the form of bank drafts or cheques. you must submit your application through ELA. You can refer to Appendix 3 for the list of documents which must accompany your applications. (4) Upon receiving your application for a new CMSL. you must submit the relevant information and documents required in printed and soft copies (diskette or CDROM). (6) Upon our approval.com.
Table 9: Forms on Anniversary Date Type of Licence Forms CMSL Form 4: Anniversary Reporting for Authorisation of Activity (CMSL) CMSL (Individual) Form 5: Anniversary Reporting for Authorisation of Activity (Individual) (2) If you are an individual CMSL holder who wishes to continue to be licensed. CMSL holders are to submit the Fit and Proper Compliance Report (Form 6A) on the fit and proper standing of such licensed representative within 7 business days from 31st December reporting  Otherwise. CMSL holders are to submit the Fit and Proper Compliance Report (Form 6A) on the fit and proper standing of such licensed representative within 7 business days from 30th June reporting  Between 1 July – 31 December. • understand the obligations of a CMSL holder and have appropriate systems and processes in place to meet them. If your business changes. (4) CMSL holders are also required to submit a semi annual Fit and Proper Compliance Report (Form 6A) on the fit and proper standing of its licensed representatives whose anniversary date fall due within the reporting period.05 Submission of Anniversary Reporting for Authorisation of Activity (ARAA) (1) CMSL holders are required to submit the ARAA form to the SC on the anniversary date of their licences. to submit a nil reporting when due 6-44 . Paragraph 6. you can apply to vary your licence at that time. Illustration: 30 June 31 December Eg. (3) Similarly for a CMSRL holder who wishes to continue to be licensed. you must satisfy the Continuing Professional Education (CPE) requirements (refer to Chapter 8) before submitting your ARAA.06 explains how to apply to vary your licence. Such report needs to be submitted within 7 business days from the reporting period. you must make sure that you– • know your business and understand which regulated activity you need to apply for to enable you to carry on your business. Do not apply for a regulated activity just in case you might want to do it in the future. you must satisfy the Continuing Professional Education (CPE) requirements (refer to Chapter 8) before the anniversary date of your licence. You should only apply for the regulated activity that is relevant to your business. If your licensed representative's Anniversary Date falls:  Between 1 January – 30 June.Application Procedures and Fees Note to applicants: Before you apply for a CMSL. and • are able to support your application with any document we may request. ARAA is represented by Forms 4 and 5. 6.
07 6-45  Type of regulated activity: Dealing in securities and dealing in derivatives  Anniversary date of new licence: 1 December 2011. (3) As a CMSL holder. How to vary a licence? (1) If you wish to add or reduce any regulated activity under your CMSL or CMSRL. you will need to complete the relevant form(s) set out in Table 10.Licensing Handbook (5) 6.my/licensing/licensed-intermediaries/. Table 10: Forms for Variation of Regulated Activity and Variation of Principal Type of Licence Forms CMSL Form 7: Application for Variation of Regulated Activity for Capital Markets Services Licence CMSRL Form 8: Application for Variation of Regulated Activity for Capital Markets Services Representative's Licence Form 9: Application for Variation of Principal by Representative Note to stockbroking companies and investment banks: Your ability to add on any additional regulated activity to your CMSL is subject to the policy on permitted activities for stockbroking companies and the Guidelines on Investment Banks. Illustration: Existing licence Type of regulated activity: Dealing in securities • Anniversary date of licence: 1 December 2011 • Proposed additional regulated activity: Dealing in derivatives • Application to add new regulated activity approved by the SC: 1 November 2011 New licence 6. ensure that your ELA account has an adequate sum of money before you apply for a variation through the system (you can refer to Appendix 4 for the schedule of application and licence fees). The licence fees will be deducted from your ELA account on the anniversary date of the company and its representatives. a new licence reflecting your new regulated activity or principal will be made available on the SC's public register of licensed holder at http://www. How much is the application and licence fee? . you must ensure that your ELA account has adequate funds before you submit your ARAA through the system. are to be submitted through ELA.com. or you wish to change your principal.sc.06 As a CMSL holder. (2) Your applications to add or reduce your regulated activity and your applications for variation of your principal. The anniversary date of the new licence will be the same as that of your existing licence. (4) Upon our approval.
000. You decide to expand your business to include a new regulated activity of dealing in derivatives. the licence fees payable will be the aggregate amount. Assume your current licence anniversary date is on 31 January 2012 and your company's application to carry on dealing in derivatives was approved by the SC on 1 November 2011. the annual licence fee payable is RM200. You are required to pay RM4.000 per annum. The computation of fees for the new regulated activity on a pro-rated basis: = 1 November 2011 to 31 January 2012 = 3 months = RM1000 x 3/12 = RM250 6. (3) If you are a CMSRL holder.000. and  Dealing in derivatives You are required to pay RM200 per annum.000 per annum to carry on the above regulated activities. the annual licence fee payable is RM1.000 each per annum. llustration: You are a CMSL holder who is licensed for dealing in securities. Illustration: If you are a CSML holder who conducts the following activities:  Dealing in securities:  Dealing in derivatives. RM1. If you carry on more than one regulated activity. (2) If you are a CMSL holder who is an individual licensed to carry on financial planning activity. RM2. and (b) for any subsequent additional regulated activity. and  Advising on corporate finance. This is the first regulated activity.08 How to withdraw an application? 6-46 . The licence fee for these two activities is RM1.000 each. regardless of the number of regulated activities you carry on for your principal.Application Procedures and Fees (1) If you are a CMSL holder which is a company. the annual licence fee payable is– (a) for any first regulated activity. Illustration: If you are a CMSRL holder who conducts the following activities:  Dealing in securities. therefore the licence fee is RM2.
searchable register of current licence holders as required under section 77 of the CMSA. Application for compliance officer Form 24: Application for compliance officer Application for Establishment of Form 26: Application for Establishment of New Business New Business or Acquisition of or Acquisition of Shares/Interests In or Outside Malaysia Shares/Interests In or Outside Malaysia (for capital market based • After obtaining the SC's approval on the application activities) made under Form 26. you must submit Form 13 within 14 days of the change occurring. (2) Similarly. Change of Form 12: Application for Change of shareholders/shareholding Shareholders/Shareholdings structure which results in a * After obtaining the SC's approval on the application change of controller made under Form 12. your application fees will not be refunded if your application has been reviewed by the Licensing Department. Form 11: Application for Change in Individual's Business Name * After obtaining the SC's approval on the application made under Form 11. you must submit Form 15 within 14 days of the change occurring. you must submit Form 15 within 14 days of the change occurring. for the withdrawal of applications submitted manually. (2) There are some changes that require our prior approval while other changes only require you notifying us after the change has taken place. you are obliged to notify us of such information as required under section 78 of the CMSA. Such changes must be lodged through ELA (you can refer to Table 11 for type of changes and relevant forms required). After you have received your CMSL and CMSRL. Changes that require prior approval (3) Changes that require our prior approval are stated in Table 11. What information requires a notification to the SC after being licensed? (1) The SC maintains a public. Table 11: Changes Requiring Prior Approval for CMSL Variation of Regulated Activity Form 7: Application for Variation of Regulated Activity for Capital Markets Services Licence Variation of name Form 10: Application for Change in Corporation's Name * After obtaining the SC's approval on the application made under Form 10. you must submit Form 16 within 14 days of the change occurring. The application fees will be deducted by the system if your withdrawal takes place after your application has been reviewed by the Licensing Department. 6-47 .09 (1) You may withdraw an application made through ELA whose status is "In Process" by using the "Withdraw" button appearing at the bottom of ELA's submissions page.Licensing Handbook 6.
Table 12: Changes Requiring Notification CMSL Change in shareholders/ Form 13: Notice of Change of Shareholders/ Shareholdings shareholding details Appointment of– Form 14: Notice of Appointment of • director Directors/Key Management/Company Secretary • chief executive officer • company secretary • head of regulated activity • head of operations • head of compliance Change of designation for– • director • head of regulated activity • head of operations • head of compliance Change of corporation's Form 15: Notice of Change in Corporation's Particulars particulars:  Name of CMSL holder  Registered address  Business address  Correspondence address  New branch  Branch closure  Establishment of new business or acquisition of shares/interests in or outside Malaysia (for capital market based activities)  Establishment of new business or acquisition of shares/interests in or outside Malaysia (for non capital market based activities) 6-48 . This notification must be made within 14 days of the occurrence of the event. However. you must notify the SC of the particulars stated in Table 12. whichever is earlier.Application Procedures and Fees Application for Appointment of Chief Executive Officer and Key Management  Chief Executive Officer  Head of Regulated Activity  Head of Operations  Head of Compliance Form 27: Application for Appointment of Chief Executive Officer and Key Management * After obtaining the SC's approval on the application made under Form 27. in the case of your directors or chief executive officers. Changes that require notification (4) As licensed persons. you must notify us within two working days of their appointment or reappointment or prior to any public announcement. you must submit Form 14 within 14 days of the change occurring.
capital market based activities)  Disposal of business or shares/interests in or outside Malaysia including closure of business Cessation of CMSL/ CMSL Form 18: Notice of Cessation for Capital Markets Services (individual) Licence Form 19: Notice of Cessation for Capital Markets Services Licence (individual) Cessation of directors/key Form 21: Notice of Cessation for Directors/Key Management/ management/company secretary Company Secretary Cessation of compliance officer Form 25: Notice of Cessation of Compliance Officer CMSRL Variation of Regulated Activity Variation of Principal Variation of particulars: • Name of CMSRL holder • Residential address • Location • Passport number (for nonMalaysian) • remuneration type Cessation of CMSRL Form 8: Application for Variation of Regulated Activity for Capital Markets Services Representative's Licence Form 9: Application for Variation of Principal by Representative Form 17: Notice of Change in Representative's Particulars Form 20: Notice of Cessation of Capital Markets Services Representative's Licence General Place where register of securities Form 22: Notice of Place Where Register of Securities Is to Be is to be kept for CMSL/CMSRL Kept 6-49 .Licensing Handbook  Disposal of business or shares/interests in or outside Malaysia including closure of business Change of individual's Form 16: Notice of Change in Individual's Particulars particulars: • Name of CMSL holder  Registered address  Business address  Correspondence address  Establishment of new business or acquisition of shares/interests in or outside Malaysia (for capital market based activities)  Establishment of new business or acquisition of shares/interests in or outside Malaysia (for non.
from time to time. in Form 18. eg. 19 or 20 when notifying the SC on cessation of business or in Form 9 when applying for variation of principal. (2) We may. eg. 6. 6-50 .10 What other submissions can be made through ELA? (1) You may also lodge the auditor's report as required under section 127 of the CMSA through ELA. add new categories of submissions to be included under ELA. in Form 1 or 3 when applying for a new licence. Cessation/change of place where Form 23: Notice of Change of Place or Cessation of Keeping of register of securities is to Register of Securities be kept for CMSL/CMSRL * Note that this form is not relevant if a licensed person had already provided the information in an earlier application to the SC.Application Procedures and Fees * Note that this form is not relevant if a licensed person had already provided the information in an earlier application to the SC.
(2) If a licensed person contravenes or fails to comply with any condition or restriction. (7) Supervise and monitor your business to ensure compliance to securities laws. guidelines and relevant code of conduct. (5) If you are a company. (6) Carry on your business for which you are licensed for efficiently. you require the SC's prior approval for such change. Where a change in your shareholding. you are required to notify the SC of any change to your shareholding. What are the conditions and restrictions in relation to a CMSL holder? General conditions and restrictions You must satisfy the following: (1) Remain fit and proper as required by the CMSA. guidelines and relevant code of conduct. This chapter sets out the general conditions or restrictions applicable to a CMSL and CMSRL granted by the SC. its regulations.02 General (1) The SC may grant a licence subject to such conditions or restrictions as it thinks fit under section 61 of the CMSA. (2) Comply with the requirements set out in Chapter 4 or 5 (where applicable) and 6 of this handbook. the SC is empowered under the CMSA to initiate and administer a broad range of actions against the licensed person under Part XI of the CMSA. 7-51 . honestly and fairly. (4) Obtain the SC's prior approval if there are any changes to your core business which you are licensed to carry on. paid-up capital. (3) Comply with securities laws. A licensed person must comply with these conditions and restrictions as long as the CMSL and the CMSRL remain valid. any establishment of a new business or acquisition of shares/interests in or outside Malaysia (for capital market-based activities and non-capital market-based activities) and disposal of business or shares/interests in or outside Malaysia within 14 days of the change. The SC may also impose other conditions or restrictions on a licensed person at the time of granting a CMSL or a CMSRL to an applicant. its regulations and guidelines and any other applicable law that may govern the business activities carried on by you.Conditions and Restrictions o f Licence Chapter 7 CONDITIONS AND RESTRICTIONS OF LICENCE 7. directly or indirectly results in a change of your controller and there is a proposal for the establishment of a new business or acquisition of shares/interests in or outside Malaysia in relation to capital market-based activities. Such supervision and monitoring should also be able to prevent and identify breaches to securities laws. its regulations.01 7.
revocation or if you cease to carry on your licensed regulated activities. Illustration 1 Company A has received its new CMSL on 30 November 2014. where applicable. Company B decides to cease being a CMSL on 1 September 2017. Company A would need to submit the cessation form for CMSL and surrender the physical licence to the SC immediately. . Immediately inform the SC of any occurrence of these events: (a) Where any of your employees has misappropriated clients' funds or committed any act that is detrimental to the interests of your clients. including your licensed representatives. Illustration 2 Company B has received its new CMSL on 2 January 2015. where applicable. submission of cessation form is deemed as surrender of licence as there will not be any issuance of physical licence affective 1 January 2015. (10) Ensure that the carrying on of any licensed regulated activity on your behalf is performed by persons who are appropriately licensed. fails or ceases to perform their function. where applicable. ceases to be fit and proper to hold a CMSRL. (12) Ensure that your licensed representatives are– (12) 7-52 (a) adequately supervised in the performance of their duties. comply with securities laws. Company A decides to cease being a CMSL on 30 November 2015. its regulations and guidelines and any other applicable law that may govern your regulated activity. (b) sufficiently trained for those duties before acting as a representative. (9) For those that are licensed after 1 January 2015. you are required to surrender the existing physical licence to the SC upon variation. and (c) kept abreast of developments by means of continuing training programmes. or (c) Where any of your licensed representatives.Licensing Handbook (8) For those that are licensed prior to 1 January 2015. (11) Ensure that your employees. (b) Where any of your licensed representatives. Company B would need to submit the cessation form for CMSL only.
you may also do so through a licensed institution who is authorised to deal in fixed income securities. money market instruments and deposits in conventional and Shariah-compliant deposit accounts. the purchase/sale of securities from or to the funds under your management.Conditions and Restrictions o f Licence Additional conditions and restrictions Fund management You must satisfy the following if you are a CMSL holder who carries on the business of fund management: (13) Immediately disclose to your clients– (a) any legal or disciplinary event that is material to an evaluation of your integrity and ability to meet contractual commitments to your clients. and/or (b) any material fact about your financial condition which will impair your ability to meet your contractual commitments to your clients. undertake. (19) Submit any advertisement and/or promotional material to the SC for purposes of post-vetting. (15) Undertake the purchase/sale of derivatives on a derivatives exchange through a CMSL holder who carries on the business of dealing in derivatives who is a clearing member of Bursa Derivatives Bhd or a clearing member of a specified exchange. directly or indirectly. in the case of a purchase/sale of fixed income securities listed on Bursa Malaysia. Financial planning You must satisfy the following if you are an individual CMSL holder who carries on the business of financial planning: (20) Comply with the requirements of the Continuing Professional Education in accordance with the format specified by the SC. (14) Undertake the purchase/sale of securities listed on Bursa Malaysia through a CMSL holder who carries on the business of dealing in securities. (17) Not for your own account. (16) Not undertake the purchase/sale of securities or derivatives which involves or potentially involves a conflict of interest between you and the funds under your management. (18) Obtain the SC's prior approval for investments in assets other than conventional and Shariah-compliant securities. 7-53 . However. derivatives.
(7) For those that are licensed prior to 1 January 2015. A decides to cease being a CMSRL on 30 November 2015. B has received its new CMSRL on 2 January 2015. Mr. B decides to cease being a CMSRL on 1 September 2017. revocation or if you cease to carry on your licensed regulated activities. (8) For those that are licensed after 1 January 2015. its regulations and guidelines and any other applicable law that may govern the business activities carried on by you. 7-54 . (2) Comply with the requirements in Chapter 4 of this handbook. Illustration 1 Mr. Illustration 2 Mr. Mr. (3) Comply with securities laws. (4) Not allow any unlicensed person to perform any of your licensed regulated activities on your behalf. submission of cessation form is deemed as surrender of licence as there will not be any issuance of physical licence affective 1 January 2015. Mr. A would need to submit the cessation form for CMSRL and surrender the physical licence to the SC immediately. (6) Comply with the requirements of the Continuing Professional Education in accordance with the format specified by the SC. (5) Ensure that you carry on your licensed regulated activity efficiently. B would need to submit the cessation form for CMSRL only.Licensing Handbook 7. honestly and fairly. you are required to surrender the existing physical licence to the SC upon variation. A has received its new CMSRL on 30 November 2014.03 What are the conditions and restrictions in relation to a CMSRL holder? General conditions and restrictions You must satisfy the following: (1) Remain fit and proper at all times as required by the CMSA. Mr.
(v) The introducing activity is incidental to his licensed activity and thus cannot be his sole business. including the referral fees or commissions or any other remuneration earned. It would be expected that the referral activity will occur within the same group if there are companies within the group licensed for both activities. the principal may have a referral arrangement with another principal licensed for either activity. For financial planning b) Both CMSLs and CMSRLs in financial planning can provide referrals to clients in the course of providing financial planning services. setting out the terms of referral arrangement. For companies that do not belong to a group with either license.Conditions and Restrictions o f Licence 7. (iii) The referral agent cannot accept orders. within the parameters set out in this paragraph. (2) The referral agent must comply with the following requirements: (i) The referral agent must act with honesty and integrity at all times. as applicable. (iv) The referral agent shall not receive or deal with client's money or property in relation to the introducing activity. Note: As a CMSRL of a principal that is licensed for dealing in securities. (ii) The referral agent cannot undertake the regulated activity that he is not licensed for. you can refer clients to a CMSRL of a company licensed for the regulated activity of dealing in derivatives through your principal. Both principals must undertake a referral arrangement. and 7-55 . (b) The CMSRLs of companies dealing in securities and derivatives are required to refer through their respective principals.04 Permissible Activities for Referral Agents General conditions and restrictions For dealing in securities and dealing in derivatives a) Both CMSLs and CMSRLs in dealing in securities and dealing in derivatives can act as referral agents to introduce potential clients to the other. (1) Eligibility Criteria (a) Only CMSLs and CMSRLs licensed for dealing in securities. dealing in derivatives and financial planning are allowed to act as referral agents.
Whether he will be remunerated by the introduction and if so the amount or rate of remuneration. which include the following: a. That he is carrying out introducing activities on behalf of his principal. (v) 7-56 The principals must approve the CMSRLs that can act as referral agents. and c. (3) Obligations of the CMSL in undertaking introducing activities (i) The principals of the respective CMSRL are responsible and accountable for the conduct of their CMSRLs. . (ii) The CMSL must notify Bursa Malaysia Securities Bhd and/or Bursa Malaysia Derivatives Bhd for registration of their CMSRLs as referral agents (not applicable to financial planning). date of appointment as referral agent.Licensing Handbook (vi) The referral agent must make the appropriate disclosures to the client. b. (iv) The principals must establish proper policies and controls on the introducing activities carried out or received. contact details. clients introduced. (iii) The principals are required to maintain a register of their CMSRLs who act as referral agents. Inform the clients that he is not allowed to give advice or provide recommendations in relation to the activity. terms of the referral arrangement and any other relevant information that the principal requires in monitoring the activity of its referral agents. The register should set out the names of the CMSRLs acting as referral agent.
8. (f) Write approved articles.02 How to collect CPE points? (1) 8-57 You may collect CPE points through the following means: (a) Attend CPE-approved courses (including the Industry Transformation Initiative (ITI) curriculum). (e) Speak in CPE-approved courses/courses relating to the development of the capital market. (d) Serve in approved industry associations/committees.Licensing Handbook Chapter 8 CONTINUING PROFESSIONAL EDUCATION (CPE) PROGRAMME 8. you are not required to collect points to mirror the number of regulated activities which you carry on.01 What Is CPE? (1) The CPE programme is introduced to foster a culture of continuous learning among individual licensed persons. and (h) Any other means which may be approved by the CPE Working Committee. if you are a CMSRL holder who carries on the regulated activity of dealing in securities and dealing in derivatives. For example. (4) You will not be entitled to collect CPE points if you attend the same CPE-approved course within one anniversary period. . you must fulfil the CPE requirements in order to continue your licence. you must obtain 20 CPE points a year. (c) Purchase CPE-approved CD-ROMs. (b) Complete CPE-approved e-learning programmes. Note to representatives: If you are a CMSRL holder who carries on more than one regulated activity. (3) You will not be allowed to carry forward the excess of your CPE points. (g) Obtain CPE-recognised professional qualifications. CPE requirements (2) As a general requirement. you will only need to collect 20 CPE points a year. As an individual licensed person.
Table 13: Mandatory Equity Courses for CMSRL Holders (Dealing in Securities) Category Name of Course EQ01 Economics and Capital Markets I: Forces Shaping Global Capital Markets EQ02 Essentials of Fundamental Analytics I: Analysing Company Performance EQ03 Corporate Strategic Analytics I: Essentials of Corporate Proposal Analysis EQ04 Corporate Governance and Ethics: Strengthening Professionalism Through Ethics 8. by 12 December 2009.05 How does ITI relate to the CPE requirement? 8-58 (1) All ITI courses are SIDC-CPE accredited with 10 CPE points. 8. (2) If you are a CMSRL holder dealing in securities. . However. What is the CPE-ITI requirement? (1) The Industry Transformation Initiative (ITI) is introduced to facilitate the development of critical skills to enhance your professional competence and ethical conduct.Licensing Handbook (2) 8.04 What is the time frame given to comply with the CPE-ITI requirement? (1) If you are an existing CMSRL holder for dealing in securities. (3) You will not be given exemptions from the CPE-ITI mandatory requirement.03 You are advised to check the CPE portal at: http://www. you must identify and justify your course choices and submit them to the Licensing Department for approval. in this case. you will have to attend the following four mandatory equity courses of the ITI curriculum. Illustration A person who is issued a new CMSRL for dealing in securities on 1 2 December 2007 must attend all four mandatory equity courses within the two years from the anniversary date of his license.my/eng/cpe/ fs_CPE. you will be given a maximum of four years to comply with the CPE-ITI requirement starting from 28 September 2007 when the CMSA comes into effect. you must comply with the CPE-ITI requirement within a period of two years from your licence anniversary date.html or contact the CPE Secretariat for further updates and information relating to the fulfilment of the CPE requirements. if you wish to attend ITI courses other than the above prescribed mandatory courses. The CPE-ITI requirement will apply to all other licence holders upon implementation of the second phase of the ITI. (2) If you obtain your CMSRL after the CMSA comes into effect. (2) You must strictly comply with the requirement of attending the total duration of the ITI course to be entitled for 10 CPE points.com.sc. under exceptional cases.
you are responsible for monitoring your CPE compliance. • View CPE points you have collected.com.html. you may choose to attend: Existing CMSRL holders for dealing in securities • At least one mandatory equity course each year over a period of four years.my/eng/cpe/fs_CPE. for better planning.my 8-59 . Therefore. and • FAQs. • Guidelines for CPE Accreditation.Licensing Handbook Note to representatives: It is important that you plan your training well so as to meet the CPE requirement of 20 points a year and the mandatory attendance of four equity courses within a time frame of four years and two years for existing and new CMSRL holders respectively.sc. 8.07 CPE Secretariat and resources (1) You can also contact the CPE Secretariat at: CPE Secretariat Securities Industry Development Corporation 3 Persiaran Bukit Kiara Bukit Kiara 50490 Kuala Lumpur Tel: 03 6204 8590/8267/8469 e-mail: cpe@sidc.com. Monitoring CPE compliance using the CPE portal (1) As a CMSRL holder. • List of CPE-approved training providers. (2) The CPE portal will provide you with the following: • CPE-approved course calendar.06 At least two mandatory equity courses each year over a period of two years. You may do so through the CPE portal which may be accessed at: http:// www. New CMSRL holders for dealing in securities (licensed after the CMSA comes into effect) • 8.
such licensed persons are deemed to be licensed appropriately under the CMSA. be deemed to be holding a CMSL for carrying on the business of dealing in securities. Illustration 1 If before the date CMSA takes effect. Where a company holds two separate licences under the SIA and FIA. Illustration 2 If before the date CMSA takes effect. This would enable the company to continue to carry on all the regulated activities for which it was authorised to carry on under the SIA and FIA. you will on the date the CMSA takes effect. . On the date the CMSA comes into effect. (2) (3) 9-60 Column 2 of Table 14 explains to an existing licensed person the(a) licence deemed to be held by him on the date the CMSA takes effect. and (b) regulated activity that can be carried on by him on the date the CMSA takes effect. Therefore. be deemed to be holding a CMSRL for carrying on the regulated activity of dealing in securities. you were holding a dealer's representative licence granted under the SIA.Treatment o f Existing Licence Holders Chapter 9 TREATMENT OF EXISTING LICENCE HOLDERS 9.01 How will the CMSA treat existing licensed persons? (1) An existing licensed person refers to a person holding a valid licence that was granted under SIA or FIA. you will on the date the CMSA takes effect. you were holding a dealer's licence granted under the SIA. the company will only hold one licence when the CMSA takes effect. such persons are not required to make any new application for a licence under the CMSA.
An investment adviser's licence granted under the A CMSL to carry on the business of advising on SIA and who is authorised to carry on the business corporate finance. of advising others concerning securities. of financial planning. A CMSL to carry on the business of dealing in securities. management in respect of dealing in derivatives. A dealer's licence granted under the SIA. An investment adviser's representative's licence A CMSRL to carry on advising on corporate finance. A fund manager's licence granted under the SIA. A dealer's representative's licence granted under A CMSRL to carry on dealing in securities. An investment adviser's licence granted under the A CMSL to carry on the business of providing SIA and who is authorised to carry on the business investment advice in respect of securities. 9-61 . the SIA. A CMSL to carry on the business of dealing in derivatives. derivatives. A futures broker's representative's licence granted A CMSRL to carry on dealing in derivatives. granted under the SIA and who is authorised to carry on the business of advising on corporate finance An investment adviser's representative's licence A CMSRL to carry on financial planning. granted under the SIA and who is authorised to carry on the business of financial planning. A futures trading adviser's representative's licence A CMSRL to provide investment advice in respect of granted under the FIA derivatives. of advising on corporate finance. A fund manager's representative's licence granted A CMSRL to carry on fund management in securities. A CMSL to carry on the business of fund management in respect of securities.Licensing Handbook Table 14: CMSA Licence and Regulated Activity That Can Be Carried on by an Existing Licensed Person When the CMSA Takes Effect Column 1 Column 2 Licence granted under the SIA or FIA Equivalent CMSA licence and regulated activity A futures broker's licence granted under the FIA. under the FIA. A futures fund manager's licence granted under the A CMSL to carry on the business of fund FIA. under the SIA. investment advice in respect of derivatives. A futures trading adviser's licence granted under the A CMSL to carry on the business of providing FIA. A futures fund manager's representative's licence A CMSRL to carry on fund management in respect of granted under the FIA. An investment adviser's licence granted under the A CMSL to carry on the business of financial SIA and who is authorised to carry on the business planning. carry on the business of advising others concerning securities. An investment adviser's representative's licence A CMSRL to provide investment advice in respect of granted under the SIA and who is authorised to securities.
i. Illustration 2 If before the date the CMSA takes effect. (2) An existing licensed person will only be given approval for variation provided he satisfies the necessary licensing criteria to carry on the proposed additional regulated activity. you were holding a futures broker's licence granted under the FIA and a dealer's licence granted under the SIA. The application process for variation is discussed in Chapter 6 of this handbook. you will only hold one licence.02 9-62 What must an existing licensed person do if he wishes to carry on an additional regulated activity? (1) If an existing licensed person wishes to carry on any additional regulated activity apart from that which he was authorised to do under the SIA or FIA.e. on the date the CMSA takes effect. an existing licensed person is prohibited from carrying on any regulated activity for which he was not authorised to carry on under the SIA and FIA. you will only hold one licence. advising on corporate finance and investment advice. as discussed in Chapter 4 of this handbook. i. you will hold a CMSL to carry on the business of fund management for securities only. You cannot therefore conduct a business in fund management for derivatives. he must first apply to the SC for a variation of his licence. on the date the CMSA takes effect. . you were holding a fund manager's licence granted under the SIA.e. (4) Under the CMSA. Illustration: If before the date the CMSA takes effect.Treatment o f Existing Licence Holders Illustration 1 If before the date the CMSA takes effect. you were holding a dealer's licence granted under the SIA and also authorised to carry on the business of advising on corporate finance and investment advice. a CMSL to carry on the business of dealing in securities. on the date the CMSA takes effect. a CMSL to carry on the business of dealing in derivatives and dealing in securities. 9.
05 What happens to licensing applications made before 28 September 2007? (1) Any application for a licence made under the SIA or FIA before the date the CMSA takes effect and still pending will be deemed to be an application for a CMSL or CMSRL. It should also be noted that the SC can.03 What must an existing licensed person do if he does not wish to carry on a particular regulated activity? (1) If on the date the CMSA takes effect an existing licensed person does not wish to continue to carry on a regulated activity for which he was authorised to do so under the SIA and FIA. Illustration: You have submitted an application for a futures broker's licence under the FIA on 26 September 2007. 9. (2) Failure to comply with any condition or restriction as discussed above can result in the SC taking various actions against an existing licensed person including an action under section 356 of the CMSA. 9. 9-63 . by written notice require compliance with any additional condition or restriction.04 Is an existing licensed person required to comply with existing licensing conditions and restrictions on the date the CMSA takes effect? (1) Conditions and restrictions imposed on a licence granted under the SIA or FIA will continue to apply to a licence that an existing licensed person holds on the date the CMSA takes effect. unless notified otherwise by the SC in writing. you are deemed to have made an application for a CMSL to carry on a business of dealing in derivatives. as discussed in Chapter 6 of this handbook. he must immediately inform the SC by making the necessary application for variation to the SC. When the CMSA comes into effect on 28 September 2007. Therefore. such an application must be accompanied by the appropriate application fee as prescribed under the Capital Markets and Services Regulations 2007.Licensing Handbook 9.
you will be required to submit the relevant information to support your application. as the case may be. At the point of first renewal.06 Who are deemed licensed persons apart from an existing holder of a licence that is granted under the SIA or FIA? Corporate finance executives and research analysts employed before the effective date of the CMSA (1) The CMSA provides that if you are a corporate finance executive or a research analyst who is currently employed by• a licensed dealer and who is registered with the SC pursuant to the SC's Guidelines for Dealers and Dealer's Representatives Under the SIA. you are required to obtain a CMSRL to carry on the regulated activity of advising on corporate finance or investment advice. before the effective date of the CMSA. as applicable.9. . Corporate finance executives and research analyst employed after the effective date of the CMSA (3) 9-64 If you are a corporate finance executive or a research analyst who is to be employed by a licensed dealer or by an investment bank after 28 September 2007. (2) Your CMSRL shall be effective for a period of one year from the date the CMSA takes effect. you shall be deemed to hold a CMSRL to carry on the regulated activity of advising on corporate finance or investment advice. You are however required to renew a CMSRL before the expiry of the one-year period. on the date the CMSA takes effect. or • an investment bank.
(d) clearing and settlement to any service provider. (3) This Chapter does not apply to investment banks.02 Material Outsourcing Arrangement (1) (2) 10-65 The outsourcing of the following functions by a CMSL holder are considered as material outsourcing arrangement and can be outsourced to the following service provider: (a) internal audit function to its group or an external auditor. or (b) any interaction or direct contact with the clients of the CMSL holder.02(2) below. regulations or guidelines as may be amended or issued from time to time by the SC.01 General (1) This Chapter sets out the requirements for outsourcing processes. (e) fund accounting to any service provider. (f) fund valuation to any service provider. (c) risk management function to its group. (2) This Chapter replaces the Guidelines on Outsourcing for Capital Market Intermediaries. (4) Except for functions set out under paragraph 10. and (h) any other function of the CMSL holder that the SC may determine. (g) the maintenance of register of unit holders to any service provider. . CMSL holders must select an appropriate and efficient service provider as well as to monitor the outsourcing arrangements on a continuous basis to ensure that it does not lead to business disruption and negative consequences to the CMSL holder's clients. services or activities by CMSL holders to service providers. (b) compliance function to its group. unless otherwise stipulated in any laws.Licensing Handbook CHAPTER 10 OUTSOURCING ARRANGEMENT BY CMSL HOLDERS 10. A CMSL holder is not allowed to outsource any back office function that involves: (a) the decision-making functions of the CMSL holder. all functions of the CMSL holder can be outsourced subject to the requirements of this Chapter. 10.
and (d) if the appointed service provider may not be able to perform the outsourced function. the derivatives exchange or stock exchange if any foreign authority were to seek access to its clients' information. there is a degree of difficulty and time required for the CMSL holder to select an alternative service provider or to bring the outsourced function in-house. reputational or operational impact on the CMSL holder in the event of a default or failure of the service provider. and (d) inform the SC. (6) A CMSL holder who is also a participating organisation and trading participant must concurrently forward a copy of the notification in paragraph 10. which may impact the undertaking of any outsourced functions. other outsourcing arrangements will also be considered as material outsourcing arrangement in the following circumstances: (a) there may be a financial. a CMSL holder must ensure that the group appoints at least one registered compliance officer to perform the compliance function. (7) Where the compliance function is outsourced to the group level. legal and political conditions of the country that the service provider and the sub-contractor are operating from. (c) the CMSL holder's ability and capacity to comply with regulatory requirements may be impacted by the outsourcing arrangement. compliance and risk management functions cannot be subcontracted. (b) the CMSL holder's services or support rendered to its clients may be potentially impacted by the outsourcing arrangement.02(1) above. the derivative exchange. stock exchange or their agents request for such information. (c) commit to retrieve information readily available from the service provider and the sub-contractor should the SC. derivatives exchange or their agents is/are hindered from having prompt access to information. . (5) A CMSL holder must notify the SC within two (2) weeks upon signing the service level agreement for any material outsourcing arrangement in accordance with the notification requirements in this Chapter. (8) Where a service provider or a sub-contractor is located outside Malaysia. (b) refrain from outsourcing to jurisdictions where the SC.02(5) to the stock exchange or derivatives exchange as the case may be.Treatment o f Existing Licence Holders (3) 10-66 Other than the material functions set out in the paragraph 10. the stock exchange. (4) Internal audit. the CMSL holder must: (a) analyse the economic.
A CMSL holder must also ensure that the service provider has adequate policies and procedures to monitor the conduct of the appointed sub-contractor.my/ (2) A letter of undertaking is also required from the service provider or sub-contractor stating that the SC.04 Notification to the SC 10-67 (1) The information required in the notification form on material outsourcing arrangement is set out under Appendix 5 of this handbook and a template of the notification form can be found at http://www. to the stock exchange or derivative exchange as the case may be.sc. 10. within two (2) weeks from the occurrence of the event. within two (2) weeks from the occurrence of the event. (3) A CMSL holder must notify the SC of any variation or termination of the service level agreement and sub-contracting agreement in relation to any material outsourcing arrangement signed by the service provider or any adverse development arising in such material outsourcing arrangement that could significantly affect the CMSL holder. include periodic review and update the service level agreement and hold regular meetings to discuss performance of the service provider.com.04(1) and 10. (5) A CMSL holder who is also a participating organisation or trading participant must concurrently forward a copy of the notification form and/or any variation or termination of service level agreement and sub-contracting agreement or any adverse development as mentioned in paragraphs 10. . among others. records and documents relating to the material outsourced arrangement(s). This assessment should be performed by the CMSL holder's internal audit or external auditor and the report should be submitted to the SC as and when requested.03 Responsibilities and oversight over service providers or sub-contractors (1) The Board of the CMSL holder remains accountable for all outsourced functions. as part of its monitoring mechanism under paragraph 10. derivative exchange and their agents will have access to all information. The letter of undertaking must be attached to the notification form. stock exchange. sub-contractor and regulatory matters.Licensing Handbook 10. performance reliability and processing capacity of the service provider which should.04(3) and 10. This assessment should take into account the service provider's policies and procedures in monitoring conduct of the sub-contractor and any new material risk arising from the outsourcing arrangement and strategies for managing such risk. (2) The Board of the CMSL holder and the CMSL holder shall be responsible to establish effective policies and procedures for its outsourcing arrangement including a monitoring framework to monitor the service delivery.03(1) and submit a report of the assessment to its board of directors and senior management. (3) A CMSL holder must perform an assessment on a service provider on a periodic basis.04(4) above. (4) A CMSL holder must also notify the SC of any adverse development arising in the outsourcing arrangement of any outsourced function that could significantly affect the CMSL holder.
05 Contact (1) For any enquiries in relation to this Chapter.Treatment o f Existing Licence Holders 10. you may contact: Intermediaries Supervision Business Group Securities Commission Malaysia 3 Persiaran Bukit Kiara Bukit Kiara 50490 Kuala Lumpur Telephone: 03-20910720 10-68 .
Additional activities that may be carried out by a stockbroking company are listed in the schedule below. Nil Nil App1-1 .Appendix 1: Policy on Permitted Activities for Stockbroking Companies Appendix 1 POLICY ON PERMITTED ACTIVITIES FOR STOCKBROKING COMPANIES Introduction A stockbroking company is authorised to carry on the business of dealing in securities. • Permitted to undertake activities pertaining to unit trust funds without having to set up a separate management company subject to obtaining the SC's approval under section 289 of the CMSA. Provided that the dedicated fund management personnel shall not engage in proprietary trading. refer to the relevant SC guidelines. and compliance with the Guidelines on Unit Trust Funds • Permitted to engage in the business of managing investment portfolios/funds and the business of marketing and distributing unit trust funds. Investment Dealing in derivatives banks Dealing in debt securities Fund management Unit trust Investment advice Advising on corporate finance Financial planning Dealing in private retirement schemes Column 3 Conditions attached Nil All types of activities in the primary and secondary market. relevant guidelines or any other condition imposed by the SC and the rules of the relevant stock exchange. Nil For categories of persons permitted to submit applications for corporate proposals to the SC. a stockbroking company shall comply with all applicable requirements stipulated in the CMSA. Column 1 Column 2 Entity Activity 1. subject to compliance with all relevant requirements of the Guidelines on Unit Trust Funds. either of its own or those of other management companies. according to the different type of entity. Prior to undertaking the additional activities. the licensing handbook.
refer to the relevant SC guidelines.Licensing Handbook Column 1 Entity 2. either of its own or those of other management companies. . subject to compliance with all relevant requirements of the Guidelines on Unit Trust Funds. and Guidelines on the Establishment o f Electronic Access Facilities by Universal Brokers and Eligible Non-universal Brokers • Allowed unrestricted branching. Practice Note 1 Flexibilities Granted to Stockbroking Companies in Relation to Branch Offices and Branching Policy. and compliance with the Guidelines on Unit Trust Funds • Permitted to engage in the business of managing investment portfolios/funds and the business of marketing and distributing unit trust funds. Provided that the dedicated fund management personnel shall not engage in proprietary trading. Universal brokers Column 2 Column 3 Activity Conditions attached • Permitted to establish branches and electronic Branching and access facilities (EAFs) in the manner stipulated in electronic access facility the Guidelines on the Establishment and Location o f a Branch Office by Universal Brokers and Eligible Non-universal Brokers. Permitted to issue and/or undertake all activities Structured products and structured warrants pertaining to structured products and structured warrants. subject to compliance with the Guidelines on the Offering o f Structured Products and Guidelines for the Issue o f Structured Warrants. Nil For categories of persons permitted to submit applications for corporate proposals to the SC. • Permitted to undertake activities pertaining to unit trust funds without having to set up a separate management company subject to obtaining the SC's approval under section 289 of the CMSA. Dealing in derivatives Nil Dealing in debt securities Fund management Unit trust Investment advice Advising on corporate finance App1-2 All types of activities in the primary and secondary market. Those intending to set up new branches shall be subject to a readiness assessment or audit to the satisfaction of the stock exchange and prior approval of the SC.
Those intending to set up new branches shall be subject to a readiness assessment or audit to the satisfaction of the stock exchange and prior approval of the SC. refer to the relevant SC guidelines. App1-3 .Appendix 1: Policy on Permitted Activities for Stockbroking Companies Column 1 Entity 2. Nil Nil Permitted to issue and/or undertake all activities pertaining to structured products and structured warrants. subject to for universal brokers compliance with the Guidelines on Access to Interbank Market by Universal Brokers as may be amended by BNM and/or prudential standards as may be prescribed from time to time. Structured products Permitted to issue and/or undertake all activities and structured pertaining to structured products and structured warrants warrants. Universal brokers 3. Dealing in derivatives Nil Dealing in debt securities Investment advice Advising on corporate finance Financial planning Dealing in private retirement schemes Structured products and structured warrants Permitted to deal in unlisted debt securities subject to the requirements as specified in the rules of the stock exchange. subject to compliance with the Guidelines on the Offering of Structured Products and Guidelines for the Issue of Structured Warrants. Nil For categories of persons permitted to submit applications for corporate proposals to the SC. and Guidelines on the Establishment o f Electronic Access Facilities by Universal Brokers and Eligible Non-universal Brokers • Allowed unrestricted branching. • Permitted to establish branches and electronic Branching and access facilities (EAFs) in the manner stipulated in electronic access facility the Guidelines on the Establishment and Location o f a Branch Office by Universal Brokers and Eligible Non-universal Brokers. subject to compliance with the Guidelines on the Offering of Structured Products and Guidelines for the Issue of Structured Warrants. Practice Note 1 Flexibilities Granted to Stockbroking Companies in Relation to Branch Offices and Branching Policy. Special scheme brokers Column 2 Activity Financial planning Column 3 Conditions attached Nil Dealing in private Nil retirement schemes Access to money market Permitted to access the interbank market to undertake borrowing or lending of funds.
Stock-broking Dealing in debt company that securities has not complied with the Policy Framework for Stock-broking Industry Consolidation Investment advice Permitted to establish branches and electronic access facilities (EAFs) in the manner stipulated in the Guidelines on the Establishment and Location o f a Branch Office by Universal Brokers and Eligible Non-universal Brokers. Permitted to issue and/or undertake all activities pertaining to structured products and structured warrants.Licensing Handbook Column 1 Entity 4. Nil Advising on corporate finance Advisory only Financial planning Nil Dealing in private retirement schemes Nil App1-4 App2-1 . refer to the relevant SC guidelines. Nil For categories of persons permitted to submit applications for corporate proposals to the SC. Those intending to set up new branches shall be subject to a readiness assessment or audit to the satisfaction of the stock exchange and prior approval of the SC. and Guidelines on the Establishment o f Electronic Access Facilities by Universal Brokers and Eligible Non-universal Brokers • Allowed unrestricted branching. Practice Note 1 Flexibilities Granted to Stockbroking Companies in Relation to Branch Offices and Branching Policy. subject to compliance with the Guidelines on the Offering of Structured Products and Guidelines for the Issue of Structured Warrants. 1+1 brokers Column 2 Activity Dealing in derivatives Column 3 Conditions attached Nil Dealing in debt securities Permitted to deal in unlisted debt securities subject to the requirements as specified in the rules of the stock exchange. Permitted to deal in unlisted debt securities subject to the requirements as specified in the rules of the stock exchange. Nil Nil Investment advice Advising on corporate finance Financial planning Dealing in private retirement schemes • Branching and electronic access facility Structured products and structured warrants 5.
(c) Microsoft Word. 2. evidencing the principal's agreement to be bound by the Terms and 3 Conditions of Use of ELA. and for a period of seven years after the person leaves the principal. App2-1 . 4.Licensing Handbook Appendix 2: Electronic Licensing Application (ELA) APPENDIX 2 ELECTRONIC LICENSING APPLICATION (ELA) Submissions under ELA 1. All CMSL holders.seccom. (d) Microsoft Excel.my/ela.my/ela. the SC reserves the right to conduct an examination at the business address or principal address of the applicant or at the designated place to ascertain that this requirement is being complied with. The printed copy of all ELA submissions together with relevant supporting documents must be kept by the CMSL holder and/or the relevant person at the business address or the principal address or a designated place approved by the SC at all times for as long as the person is licensed or is in the employment of the CMSL holder.com. or (e) ASCII Text.seccom. 3. variations or modifications thereto. All CMSL holders and their authorised users will thereupon comply with the Terms and Conditions of Use of ELA at all times.my. and (b) the ELA website at http://ers. apply to the SC for access to ELA.com. The CMSL holders will be required to sign the Acceptance of Terms and Conditions. including any amendments. The list of applications/submissions which can be made through ELA is available on(a) the SC website at http://www. General requirement for a supporting document 5.com. within three months of being licensed. Persons authorised by the CMSL holder to access or establish a connection to ELA. For this purpose.sc. The Terms and Conditions of Use of ELA are available at http://ers. 3 A document to be uploaded and submitted to the SC through ELA shall not exceed 512KB and be in the following format: (a) Joint Photographic Experts Group (JPEG). (b) Adobe Portable Document (PDF). must.
A CMSL holder and its directors are ultimately responsible for all information entered into the ELA system through the use of the principal's account. the SC may require other relevant or additional information to be submitted. all duly completed forms and relevant supporting documents must be submitted in printed and soft copies (diskette or CD-ROM). where appropriate. In addition. 11. 7. inform the public of measures put in place for accepting such submissions until the ELA system resumes operation. allow any exemption and variation from the requirements of ELA. a natural disaster. For further enquiries on ELA or assistance on submissions. whether on a permanent basis or for a specified period of time. As such. 13. App2-2 App2-1 . an emergency or any other event which is beyond the control of the SC. applicants may manually submit applications or notifications to the SC. Under such circumstances. 14.Licensing Handbook Unavailability of ELA 6. 10. The SC may. 8. Where necessary. General 12.my. the CMSL holder is expected to have in place the necessary policies and procedures to ensure that the information submitted via ELA whether on its behalf.com. are true and accurate. The SC may. all applications or notifications are to be submitted with the required fees to the SC at: Head Authorisation & Licensing Department Securities Commission Malaysia 3 Persiaran Bukit Kiara Bukit Kiara 50490 Kuala Lumpur 9. based on the merits of the case. through its website or via the mass media. An applicant must ensure that all information submitted through ELA is true and correct. either due to an electrical power failure. or on behalf of its representatives and/or key personnel. For manual submissions. applicants may contact the Helpdesk at 603-6204 8977 or e-mail elahelp@seccom. If ELA is unavailable for more than five consecutive days. All licensed persons must comply with the requirements of ELA at all times. all licensed persons must comply with all relevant provisions in the laws and the conditions for each type of regulated activities.
subsidiary and associate companies which are or were involved in any regulated activity in Malaysia or elsewhere and their licence/ registration status. 1 6 . etc. Form 9 . 7. Description of corporation's structure in the form of a tree diagram depicting the following details: • Corporation's shareholding structure.* 1 4 . 4. A duly completed form for the application of compliance officer (at least one).* 9. target market. and • business plan for the next three years. Participation/membership certificate of approval in principle for admission from the exchange. Form 24 . Form 32A . 20.Companies Act 1965. and • Percentage of shareholdings of each shareholder. Form 1 3 .00 • Corporation's cheque/bank draft/postal or money order made payable to "Securities Commission" or "Suruhanjaya Sekuriti".Companies Act 1965. 1 5 . Form 49 .** 1 0 . • Corporation's group structure depicting related. subsidiary and associate companies.Licensing Handbook Appendix 3 SUPPORTING DOCUMENTS FORM 1 .RM50. Profile of corporation's holding companies . Profile of corporation's individual shareholders.** 1 1 . target clients. A copy of the corporation's latest management accounts ( i f audited financial statements are more than three months old). Processing fees . Form 44 . e. List of employees indicating the Bumiputera/non-Bumiputera/foreign status. A copy of the corporation's latest audited financial statements.* 8.Companies Act 1965.g. 2. Description 1. and • risk management policies which the applicant has adopted or proposes to adopt for its proposed business 1 9 .APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE No. 6. 3. 5. current assets and contingent liabilities of the corporation (for the period between the date o f last account and a date not earlier than 14 days before the date o f this application). the employment status and position.Companies Act 1965. 1 8 . 2 1 .* 1 3 . Declaration on the Physical Layout of Business to Avoid Conflict of Interest. Corporate profile describing in detail the• management and organisation structure.** 1 2 .Companies Act 1965. affairs. A copy of the director's report on the financial standing.Companies Act 1965. Provide details of any of the applicant's related. App3-1 . Additional supporting documents/details for the application o f dealing in securities and/or dealing in derivatives as a regulated activity. • internal audit procedures.immediate and ultimate. 1 7 . Corporation's operational and compliance manual (two copies) describing in detail• reporting principles and procedures. Memorandum and Articles of Association. • procedures for compliance with the securities laws.
26. 23. Additional supporting documents/details for the application o f dealing in unit trust products dealing in private retirement scheme. * * To be certified as true copy by the Companies Commission o f Malaysia (Suruhanjaya Syarikat Malaysia).* 6. A completed self-assessment readiness checklist as specified by the SC. 7.00 • Corporation's cheque/bank draft/postal or money order made payable to "Securities Commission" or "Suruhanjaya Sekuriti". A copy of the applicant's recent colour passport-size photograph. App3-2 . Description Processing Fees . 27. 5. 25.* 5.* * To be certified as true copy by a Commissioner for Oaths/Company Secretary. A copy of the relevant industry examination results/membership. A duly completed form for the application of compliance officer (at least one). A copy of the applicant's relevant academic certificates. Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. 2. FORM 1B . advising on corporate finance and/or financial planning as a regulated activity. * To be certified as true copy by a Commissioner for Oaths/Company Secretary. Letter of acceptance from the proposed "custodian". Work permit (for non-Malaysian citizens)*.APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE (to be filled by directors/key management/company secretary) No. 3.APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE (to be filled by directors/key management/company secretary who are also the proposed representative) No. 3. FORM 1A . 1.* 4.RM50. 1. 4. Description A copy of the applicant's NRIC* (for Malaysian citizens) or passport* (for non-Malaysian citizens). 22. A copy of the applicant's recent colour passport-size photograph. Work permit (for non-Malaysian citizens). A copy of the applicant's NRIC* (for Malaysian citizens) or passport* (for non-Malaysian citizens).Licensing Handbook Additional supporting documents/details for the application o f fund management as a regulated activity. A copy of the applicant's relevant academic certificates. 2. * To be certified as true copy by a Commissioner for Oaths/Company Secretary. Corporation's portfolio management system manual (two copies). investment advice. Information on the amount of funds the corporation is projected to manage in the next five years. A completed self-assessment readiness checklist specified by the SC. 24. Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form.
A completed self-assessment readiness checklist as specified by the SC.* 6.g. A copy of the applicant's relevant academic certificates. A copy of the applicant's recent colour passport-size photograph.Licensing Handbook FORM 1C . Declaration on the Physical Layout of Business to Avoid Conflict of Interest.* 6.* 3. 7. 1. and • risk management policies which the applicant has adopted or proposes to adopt for its proposed business.* 9.* 5. 7. A copy of the applicant's NRIC* (for Malaysian citizens) or passport* (for non-Malaysian citizens). Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. App3-3 .00 • Cheque/bank draft/postal or money order made payable to "Securities Commission" or "Suruhanjaya Sekuriti". Work permit (for non-Malaysian citizens). etc. Provide details of any applicant's related parties which are or were involved in any regulated activity in Malaysia or elsewhere and their licence and registration status. 14. 4. and • business plan for the next three years. A copy of registration of business with Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia). 8. 12. 10. * To be certified as true copy by a Commissioner for Oaths/Company Secretary.RM50.* 3. 11. • p r o c e d u r e s for compliances with the securities laws.APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE (INDIVIDUAL) No. 2. Applicant's operational and compliance manual (two copies) describing in detail— • r e p o r t i n g principles and procedures. Description Processing Fees . Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. 13. 1. A detailed statement of the applicant's current assets and contingent liabilities signed by the applicant and verified by an approved auditor. A copy of the relevant industry examination results/membership. target market.RM50. Work permit (for non-Malaysian citizens). FORM 2 . target clients. e.00 • Corporation's cheque/bank draft/postal or money order made payable to "Securities Commission" or "Suruhanjaya Sekuriti". • internal audit procedures. A copy of the relevant industry examination results/membership. A copy of the applicant's relevant academic certificates. 4. Description Processing Fees . A copy of the applicant's NRIC (for Malaysian citizens) or passport (for non-Malaysian citizens).APPLICATION FOR NEW CAPITAL MARKETS SERVICES LICENCE (to be filled by the first two proposed representatives) No.* * To be certified as true copy by a Commissioner for Oaths/Company Secretary.* 5. Business profile describing in detail the— • management and organisation structure. 2. A copy of the applicant's recent colour passport-size photograph.
3. A copy of the applicant's relevant academic certificates. A copy of the corporation's latest unaudited management accounts. 7. 6. App3-4 . current assets and contingent liabilities of the corporation (for the period between the date o f last account and a date not earlier than 14 days before the date o f this application). Work permit (for non-Malaysian citizens). including training hours logged and any specific training and development activities carried out for the Registered Representatives. 6.  details of complaints. 3. received against any of its Registered Representatives. 5. 1. 2. Additional supporting document for the regulated activity of Islamic fund management 10.  an update on training undertaken by each of the Registered Representatives. Form 49 – Companies Act 1965. 5. A copy of the relevant industry examination results/membership. Performance Review (AS in Section III of this submission) 8. Annual report on the Registered Representatives consisting of the following:  a declaration to the SC that all its Registered Representatives are in compliance with the fit and proper requirements. 2. Organisation Chart (latest) 7. affairs. Other relevant documents Additional supporting document for the regulated activity of dealing in securities 9. and  the outcome of its supervision and the findings against its Registered Representatives. if any. Description Form 24 – Companies Act 1965. 4. (i f audited financial statements are more than three months old). Description A copy of the applicant's NRIC (for Malaysian citizens) or passport (for non-Malaysian citizens). Bankruptcy Search Result from Jabatan Insolvensi Malaysia (Malaysia Department of Insolvency – MdI) FORM 4 – ANNUAL REPORTING FOR AUTHORISATION ACTIVITY FOR CAPITAL MARKETS SERVICES LICENCE No. Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. A copy of the applicant's recent colour passport-size photograph. a written disclosure and declaration that the Islamic fund management business is carried out in accordance with Shariah principles (in line with paragraph 9 of the SC's Guidelines on Islamic Fund Management). List of employees indicating the Bumiputera/non-Bumiputera/foreign status. For companies carrying out Islamic fund management activities.Licensing Handbook FORM 3 – APPLICATION FOR NEW CAPITAL MARKETS SERVICES REPRESENTATIVE'S LICENCE No. if any. employment status and position. A copy of the director's report on the financial standing. 1. 4.
1. • p r o c e d u r e s for compliances with the securities laws. Participation/membership certificate of approval in principle for admission from the exchange. e. 1.g. 3. Description Corporate profile describing in detail the• management and organisation structure. Declaration on the Physical Layout of Business to Avoid Conflict of Interest. Corporation's operational and compliance manual describing in detail-• r e p o r t i n g principles and procedures. Description Other relevant documents FORM 7 . Additional supporting documents/details for the application o f dealing in securities and/or dealing in derivatives as a regulated activity 6. 3. App3-5 . 4. 2. 2. the employment status and position.Licensing Handbook FORM 5 . target clients.APPLICATION FOR VARIATION OF REGULATED ACTIVITY FOR CAPITAL MARKETS SERVICES LICENCE No. and proposed business activities in respect of proposed regulated activities. A copy of the corporation's latest management accounts (if audited financial statements are more than three months old). A duly completed form for the application of compliance officer (at least one). Bankruptcy Search Result from Jabatan Insolvensi Malaysia (Malaysia Department of Insolvency – MdI) Other relevant documents FORM 6A – FIT AND PROPER COMPLIANCE REPORT BY LICENSED CORPORATION No. etc. target market. List of employees indicating the Bumiputera/non-Bumiputera/ foreign status.ANNIVERSARY REPORTING FOR AUTHORISATION ACTIVITY FOR CAPITAL MARKETS SERVICES LICENCE (INDIVIDUAL) No. • internal audit procedures. 5. 1. and • risk management policies which the applicant has adopted or proposes to adopt for its proposed business. and • business plan for the next three years. Description A detailed statement of the applicant's current assets and liabilities signed by the applicant and verified by an external auditor Details of securities sold/purchased by the applicant for his own account during the last 12/24 months immediately preceding the date of application in the specified form. 4. 7.
Description A copy of the applicant's relevant academic certificates. 1 1 . 1 4 . Additional supporting documents/details for the application o f dealing in unit trust products. A copy of the relevant industry examination results/membership 5. 9. 1.e. FORM 12 . and • Percentage of shareholdings of each shareholder. dealing in private retirement scheme.APPLICATION FOR CHANGE OF SHAREHOLDERS/SHAREHOLDINGS No. Experience of related companies in relation to fund management/futures fund management. A copy of the exchange's approval for transfer For variation in regulated activity 3. e. Letter of acceptance from the proposed "custodian". 1. Description Please describe your shareholding structure before and after the change in the form of a tree diagram depicting the following details: • Corporation's shareholding structure. 1. Description Declaration from the corporation attesting to the fit and properness of the CMSRL holder. Corporation's portfolio management system manual. Other relevant documents. 1 3 .APPLICATION FOR VARIATION OF PRINCIPAL BY REPRESENTATIVE No. Description A copy of approval letter from the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) confirming the reservation of the new name. AND FORM 11 . 1. FORM 9 .APPLICATION FOR VARIATION OF REGULATED ACTIVITY FOR CAPITAL MARKETS SERVICES REPRESENTATIVE'S LICENCE No. Information on the amount of funds the corporation is projected to manage in the next five years. 1 0 . 2. FORM 8 . in accordance with S65 of the CMSA 2. investment advice.g. A completed self-assessment readiness checklist specified by the SC. A completed self-assessment readiness checklist specified by the SC. detailed write-up of the proposed change of the shareholders. 2. advising on corporate finance and/or financial planning as a regulated activity. 1 2 . A copy of the relevant industry examination results/membership.APPLICATION FOR CHANGE IN CORPORATION'S NAME. A duly completed form for the application of compliance officer (at least one).Licensing Handbook Additional supporting documents/details for the application o f fund management as a regulated activity 8. order of annulment from the High Court or a letter of discharged from the Insolvency Department FORM 10 . App3-6 .APPLICATION FOR CHANGE IN INDIVIDUAL'S BUSINESS NAME No. Other relevant documents i. A copy of the applicant's relevant academic certificates 4.
Form 49 . Description Please describe your shareholding structure before and after the change in the form of a tree diagram depicting the following details: • Corporation's shareholding structure.NOTICE OF APPOINTMENT OF DIRECTORS/CHIEF EXECUTIVE OFFICER/KEY MANAGEMENT/COMPANY SECRETARY No. Description A copy of the appointee's NRIC (for Malaysian citizens) or passport (for non-Malaysian citizens). Declaration on the Physical Layout of Business to Avoid Conflict of Interest. 4. A copy of the appointee's relevant academic certificates. Form 1 3 . and • Percentage of shareholdings of each shareholder. Supporting document for a new branch and/or branch closure (For dealing in securities and/or dealing in derivatives)/establishment of new business or acquisition of shares/interests in or outside Malaysia (for capital market-based activities and non capital market-based activities) and disposal of business or shares/interests in or outside Malaysia including closure of business 4.Companies Act 1965. Form 32A . FORM 15 .NOTICE OF CHANGE OF SHAREHOLDERS/SHAREHOLDINGS No. 1. Work permit (for non-Malaysian citizens). e. 2. Description Supporting document for change in name 1. Details of securities sold/purchased by the appointee for his own account during the last 1 2 months immediately preceding the date of application. Other relevant documents.Companies Act 1965. FORM 14 . A copy of the appointee's recent colour passport-size photograph.NOTICE OF CHANGE IN CORPORATION'S PARTICULARS No.Licensing Handbook FORM 13 .Companies Act 1965.g.Companies Act 1965. Board of Directors and/or shareholders' approval (where applicable) App3-7 . 5. 4. A copy of the letter of approval from other relevant authority/regulator 5. Supporting documents/detail for change in registered address 2. 2. 3.Companies Act 1965. Supporting document for change in business address 3. 1. Form 44 . 6. detailed write-up of the proposed change of the shareholders. 3. Form 24 .
A copy of the change in location letter from the corporation to the exchange. FORM 22 . 1. A copy of acceptance letter from the exchange. 3.NOTICE OF CESSATION FOR CAPITAL MARKETS SERVICES LICENCE (INDIVIDUAL) No. FORM 20 . Description Supporting documents for change in name 1. A copy of the approval letter from the corporation. Description A copy of the representative's resignation/termination letter or any other relevant document. Description Form 49 . Description Any relevant document. A copy of the approval letter from the Companies Commission of Malaysia.NOTICE OF CESSATION FOR CAPITAL MARKETS SERVICES LICENCE. A copy of the approval letter from Jabatan Pendaftaran Negara.NOTICE OF CHANGE IN REPRESENTATIVE'S PARTICULARS No.NOTICE OF PLACE WHERE REGISTER OF SECURITIES IS TO BE KEPT No.NOTICE OF CESSATION FOR DIRECTORS/EXECUTIVE DIRECTOR/CHIEF EXECUTIVE OFFICER/KEY MANAGEMENT/COMPANY SECRETARY No. FORM 21 . 2. 1. Description Supporting documents for change in name 1. A copy of the approval letter from Jabatan Pendaftaran Negara. FORM 18 . 2. A copy of the passport. App3-8 . Supporting documents for change in business name and/or business address. Supporting documents for change in remuneration type 4. 1. Supporting documents for change in location 3. A copy of the resignation/termination letter. 1. Supporting documents for change in passport 2. Description Any relevant document.Licensing Handbook FORM 16 . AND FORM 19 .NOTICE OF CHANGE IN INDIVIDUAL'S PARTICULARS No.Companies Act 1965.NOTICE OF CESSATION FOR CAPITAL MARKETS SERVICES REPRESENTATIVE'S LICENCE No. Supporting document for establishment of new business or acquisition of shares/interests in or outside Malaysia (for capital market-based activities and non capital market-based activities) and disposal of business or shares/interests in or outside Malaysia including closure of business FORM 17 .
FORM 25 . A copy of the relevant industry examination results/membership. A copy of the applicant's relevant academic certificates. A copy of the exchange's acceptance letter. 3. 2.NOTICE OF CESSATION FOR COMPLIANCE OFFICER No.Licensing Handbook FORM 23 . 1. Description Any relevant document. A copy of the applicant's recent colour passport-size photograph.APPLICATION FOR COMPLIANCE OFFICER No. 1. Work permit (for non-Malaysian citizens). Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. 6. FORM 26 – APPLICATION FOR ESTABLISHMENT OF A NEW BUSINESS OR ACQUISITION OF SHARES/INTERESTS IN OR OUTSIDE MALAYSIA No. 5. 1. 5. 3. 4. Description A copy of the applicant's NRIC (for Malaysian citizens) or passport (for non-Malaysian citizens). 1. A copy of the applicant's relevant academic certificates. 2.APPLICATION FOR APPOINTMENT OF CHIEF EXECUTIVE OFFICER/KEY MANAGEMENT No.NOTICE OF CHANGE OF PLACE OR CESSATION OF KEEPING OF REGISTER OF SECURITIES No. 2. A copy of the applicant's recent colour passport-size photograph. FORM 24 . 2. Description A copy of the letter of approval from other relevant authority/regulator Board of Directors and/or shareholders' approval FORM 27 . App3-9 Description A copy of the applicant's NRIC (for Malaysian citizens) or passport (for non-Malaysian citizens). Description A copy of the compliance officer's resignation/termination letter. 1. . Details of securities sold/purchased by the applicant for his own account during the last 1 2 months immediately preceding the date of application in the specified form. 4. Work permit (for non-Malaysian citizens).
000 RM100 Capital Markets Services Representative's Licence Activity 1. 5. Fees RM20 RM50 RM50 App4-1 . for any number of regulated activities. 3. Licence fee payable by a licence holder which is an individual for a period of 1 2 months or any part thereof for a regulated activity. Processing fee for Fit and Proper Compliance Report.Licensing Handbook Appendix 4 FEES 1. Fees Payable RM50 RM50 RM2. or (b) variation of a licence. 4. Submission of anniversary reporting 3. (b) each subsequent regulated activity. Fees Payable RM50 RM50 RM200 RM100 Other Fees Matter 1. Approval of an application for a variation of a licence. 2 . A certified copy of an electronic licence. 3. 2. Lodgement of any other applications to the SC where no fees are specifically provided.000 RM1. Application for a(a) licence. Approval of an application for variation of a licence. Licence fee payable by a licence holder for a period of 12 months or any part thereof. Lodgement or deposit of documents. Application for a– (a) licence. Application and licence fees in respect of the grant and variation of a Capital Markets Services Licence and Capital Markets Services Representative's Licence Capital Market Services Licence Activity 1 . 2. or (b) variation of a licence.000 RM1. 4. for a period of 1 2 months or any part thereof for(a) any first regulated activity. 2. Licence fee payable by a licence holder which is a company.
Letter of Undertaking from the service provider(s) or sub-contractor(s) addressed to Executive Director Intermediaries Supervision Business Group Securities Commission Malaysia 3 Persiaran Bukit Kiara Bukit Kiara 50490 Kuala Lumpur Copied to (where applicable): Head Participants Supervision Division Bursa Malaysia Bhd 12 Floor. a brief description of the material outsourced functions.com. a brief explanation on the rationale to outsource to service provider or subcontractor outside Malaysia and explanation on why the particular function could not be undertaken domestically (if applicable). Exchange Square Bukit Kewangan 50200 Kuala Lumpur 3. and b.my/) which sets out the following: a.sc.Licensing Handbook Appendix 5 NOTIFICATION FORM ON MATERIAL OUTSOURCING ARRANGEMENTS No. 1. Description A Notification Form signed by either the Chief Executive Officer or Executive Director (please refer to the template at http://www. 2. The Notification Form should be addressed and sent to: Executive Director Intermediaries Supervision Business Group Securities Commission Malaysia 3 Persiaran Bukit Kiara Bukit Kiara 50490 Kuala Lumpur Copied to (where applicable): Head Participants Supervision Division Bursa Malaysia Bhd 12 Floor. Exchange Square Bukit Kewangan 50200 Kuala Lumpur App5-1 .