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EPP 7 (continued from previous page)
The revised guidelines require fund management companies
and their representatives to uphold a number of core principles
in the conduct of their business ranging from integrity, skill, and
avoiding conflict of interest to compliance culture and client asset
protection.
The sales practice regime was further strengthened through
streamlining the categories of sophisticated investors to limit
the distribution of high-risk and complex products. The sales
practices for unlisted products were reviewed to clarify suitability
assessment requirements under Section 92 of the Capital Markets
and Services Act 2007 (CMSA), while disclosures were enhanced
through requiring the issuance of product highlight sheets.
On 9 August 2011, the SC revised its Guidelines on Outsourcing for
Capital Market Intermediaries to provide intermediaries the ability to
focus on their core strengths of intermediation by outsourcing their
back office functions to other service providers. In tandem with the
liberalised approach, the Guidelines also allow intermediaries to
EPP 8
To help Malaysia achieve its ambition
of becoming a thriving regional asset
management hub, one of this EPP’s
action plans is to encourage foreign
fund management companies to set
up operations in Malaysia as a means
to stimulate the industry. Additionally,
measures are also being taken to further
encourage the retail market and carve a
niche in Islamic asset management.
This EPP is expected to create incremental
GNI of RM2.4 billion and an additional 7,000
jobs by 2020. Assets under management
are expected to grow from its current
RM300 billion to RM1.7 trillion by 2020,
representing a CAGR of 17 per cent.
Achievements
On 11 April 2011, EPF members with
MyKad with savings of more than RM1
million were provided the flexibility to
make withdrawals through being present
at the EPF counter by producing the MyKad
and Bank Passbook/Savings Account
Statement/Current Account Statement.
outsource to foreign service providers with the requirement that
access was provided to books and records kept offshore.
PEMANDU also assisted in the establishment of ESB Artha Global
Management Sdn Bhd (ESB Artha), a company that provides fund
management solutions and services to high net-worth individuals
and wholesale clients.
Moving Forward
The SC will continue to facilitate product innovation through
widening the range of asset classes for intermediation. The
regulatory framework for fund-raising and product offerings will
also be enhanced to tailor to specific needs of various categories
of products and investors. The framework is targeted to be
released in the first half of 2012. As product complexity increases
on the Malaysian capital market, disclosure requirements will be
strengthened to ensure more effective disclosure of product risks.
Accelerating and Sustaining
a Significant Asset Management Industry
To attract foreign firms with potential to
serve as growth catalysts into Malaysia,
GLICs have raised their mandates to
external fund managers from five to 15 per
cent of assets under management (AuM),
with each mandate being sufficiently
attractive in size from RM1 billion to RM2
billion.
Moving Forward
The role of the investment management
industry is expected to further expand with
NKEA: Financial Services EPP 6 – EPP 8
the establishment of the private retirement
scheme industry to complement existing
mandatory schemes. The private retirement
scheme industry will assist in promoting
greater diversity in the management of
long-term savings. In addition, the range
of asset classes for intermediation will
also be broadened to facilitate portfolio
diversification. A seeding strategy will also
be developed to increase the diversification
of Islamic investment strategies and styles.
MyKad holders with EPF savings of over RM1 million can now make withdrawals at EPF counters.
Photo courtesy of Star Publications (Malaysia) Bhd
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