SC issues revised guidelines on capital market intermediaries

KUALA LUMPUR: The Securities Commission has issued the revised Guidelines on Conduct for Capital Market Intermediaries, aimed at elevating standards of professionalism and integrity of capital market intermediaries (CMIs) in the industry.

In a statement, the regulator said the revised guidelines, among others, reinforce the role of a CMI’s board and senior management in inculcating a corporate culture where clients’ interests are prioritised.

"The guidelines also clarify the SC’s expectations on the CMIs’ duty to act honestly, fairly as well as avoid misleading and deceiving its clients under any circumstances," it added.

New chapters are introduced to address crucial areas such as treatment of vulnerable clients, as well as provision of personal advice and capital market related services including through online platforms.

SC chairman Datuk Seri Awang Adek Hussin said the revised guidelines signify the SC’s efforts towards fostering trust, integrity and client-centricity in the capital market industry.

He said this was achieved by, among others, minimising the risk of mis-selling, avoiding reputational damage, reducing complaints and improving client retention.

“Fairness is a cornerstone principle, requiring CMIs to consider the client’s circumstances, including any vulnerabilities that the client may have, communicate clearly and ensure comprehension of product details and associated risks,” he said.

“When providing personal advice to a client, a CMI must exercise care, skill and diligence, and give due regard to the client’s interests. We are confident that these enhancements will not only elevate standards but also reinforce investor confidence in our capital market."

In revising the guidelines, the SC has taken into account feedback from engagements with, among others, Bank Negara, the Federation of Investment Managers Malaysia and relevant capital market intermediaries.

The revised guidelines will come into effect on Oct 1, 2024, to allow sufficient time for capital market intermediaries to familiarise and make preparations to meet the new requirements.

The revised “Guidelines on Conduct for Capital Market Intermediaries” is available at https://www.sc.com.my/regulation/guidelines/conduct-for-capital-market-intermediaries

A series of FAQs in relation to the revised guidelines is available at https://www.sc.com.my/regulation/guidelines/conduct-for-capital-market-intermediaries