Securities Commission Malaysia (SC) recently announced several liberalisation measures for the fund management industry and introduced the Foreign Exempt Scheme (FES) framework.
Through the framework, SC will be able to provide institutional investors greater onshore access to foreign investment funds and high-net-worth entities.
SC also introduced increased flexibility to wholesale fund managers seeking to invest or explore alternative investment products and avenues. These measures go beyond the traditional assets such as securities, derivatives, money market instruments and deposits.
The initiative is part of SC’s continuous commitment to enhancing the depth and breadth of the capital market while ensuring an effective regulatory regime that fosters an inclusive investment environment and caters to various risk appetites and investment needs.
Dato’ Seri Dr Awang Adek Hussin, SC Chairman, highlighted that by giving access to a wider range of investment options, high-net-worth entities and institutional investors will have more opportunities to diversify their portfolios.
“The FES framework opens up new avenues for high-net-worth entities and institutional investors to access funds offered by foreign players that are a related corporation to an SC-licensed fund management company,” Dr Awang said in a statement.
He added, “Additionally, these measures enable the fund managers to offer more products and investment choices to investors locally, aligning with the SC’s efforts to promote innovation and accessibility.”
The revised guidelines go into effect on 29 August 2023 and will encompass the following measures:
- Guidelines for the Offering, Marketing, and Distribution of Foreign Funds (OMD Guidelines)
- Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework (UCMP Guidelines)
Additionally, the revised OMD guidelines allow for the secondary listing of non-standard foreign exchange-traded funds (ETFs), promoting more investment opportunities in the Malaysian market and are subject to a maximum of five ETFs per foreign operator
The enhanced guidelines aim to provide clarity on expectations related to the roles and responsibilities of submitting parties for foreign funds, leading to a more streamlined process.
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