New SC rules for reps

  • Business
  • Tuesday, 09 Oct 2012

KUALA LUMPUR: The Securities Commission (SC) has introduced two new classes of registered persons trading and introducing representatives under its Guidelines for Registered Persons.

It said the introduction of these two new categories of registered persons would widen the opportunities for fresh talent to join the stockbroking industry and ensure sustainable growth of the industry.

It would also strengthen the role of dealers and dealers' representatives by facilitating provision of specialised services, allowing focus on client servicing and enabling access to a wider clientele base, the SC said in a statement.

The move is set to increase the productivity of over 6,000 licensed representatives and provide new job opportunities in the capital market for thousands of young Malaysians.

“The SC estimates the size of Malaysia's capital market to more than double from RM2 trillion in 2010 to RM4.5 trillion by 2020, while the equity market is projected to grow from RM1.2 trillion in 2010 to RM2.4 trillion in 2020.

“The stockbroking industry, as a critical pillar of our capital market, must be encouraged to build greater intermediation capacity,” SC chairman Datuk Ranjit Ajit Singh said in the statement.

The guidelines encapsulate the criteria for entry, permissible scope of activities, registration process as well as the ongoing obligations of the stockbroking company for the registered person's supervision, conduct, ongoing training and development.

Upon registration with the SC, the trading representatives will be able to take orders and execute trades while the introducing representatives can market and refer prospective clients to the stockbroking companies.

“This is positive for the industry. It eases the entry of new talent and grows the industry talent pool in the long run,” says CIMB Investment Bank chief executive officer Datuk Charon Wardini Mokhzani in a statement.

“Having introducing representatives should help brokers in their customer acquisition and increase overall investor participation in the country's capital market.

“Allowing for more specialisation among the different types of licensed representatives will also allow stockbrokers to tailor their services according to the individual needs of their clients.”

Kenanga Investment Bank Bhd managing director Chay Wai Leong said in a statement that the two new categories of representatives would complement the investment bank's equity broking business.

“We envision this will give us the platform to tap into a wider clientele base. From remisiers' perspective, they can engage the services of introducing representatives to broaden their clientele base.

“With the assistance of trading representatives, the remisiers will be able to provide their enlarged clientele base better trade execution services.”

Chay said Kenanga Investment Bank would commit resources to the training and development of these new representatives.

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