On 8 December 2022, the Securities Commission (SC) Malaysia issued technical note No. 1/2022, the Clarification on Licensing Requirements for Persons Offering Digital Investment Advice, to clarify the licensing requirements for persons offering digital investment advice.

In this note, the SC states that:

  • the provision of digital investment advice is still "investment advice" for the purpose of the Capital Markets and Services Act 2007 and, therefore, triggers a requirement for a licence from the SC;
  • it is working towards finalising a holistic framework that caters to both digital and traditional investment advice models;
  • in the interim, applicants who can satisfy the requirements set out in section B of the technical note may apply to the SC for a waiver (or waivers) from the following aspects:
    • the financial requirements as set out in table one of the SC's Licensing Handbook, provided that the applicant has, at all times, a minimum paid up capital of 200,000 Malaysian ringgit and net tangible assets of at least 50,000 Malaysian ringgit on admission and throughout the duration of the licence;
    • a Bumiputera requirement relating to directors, representatives and employees' composition; and/or
    • a requirement pertaining to a licensed director provided that this involves a director with a minimum of five years of relevant experience in investment advice and a capital markets services representative's licence for investment advice;
  • where the SC grants a waiver, it may also impose other requirements that it deems appropriate; and
  • existing licence holders that intend to undertake digital investment advisory must seek the SC's prior approval to do so.

For further information on this topic please contact Pamela Kung at Shearn Delamore & Co by telephone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.