What Constitutes Licensed Investing Advice?
Investment advice is everywhere – but not all advice is legitimate.
If you’re getting investment advice (e.g. advice and analysis on specific securities), make sure that your advisor is registered and licensed with the Securities Commission Malaysia (SC).
However, if you frequently search or contribute to discussion on investment topics, it might not be clear what constitutes investment advice that requires a license. For example, if you discuss a stock on a forum, does that need a license? If you talk about the advantages of robo advisors on social media, can you get fined?
Recently, the SC has issued a Guidance Note on Provision of Investment Advice, which aims to answer these questions. According to the SC, “recommendations or opinions which are likely to induce a person to take any action or position (e.g. buy, sell or hold) regarding a particular class, sector, or instrument in relation to securities or derivatives, is likely to be considered as ‘advising others concerning securities or derivatives'”. Read the Guidance Note for more information and details on how it relates to specific scenarios.
As an investor, remember to look up the licensing status of any advisor, company or platform before you engage with them. To do so, check the Public Register of License Holders www.sc.com.my/licensed-registered-persons and List of Registered Recognised Market Operators www.sc.com.my/rmo. Dealing with unlicensed investment advisers platforms can be dangerous, as there is a risk of fraud or market manipulation.
If you have any information on any person providing investment advice without a license, you can contact the SC’s Consumers and Investors Department at tel +603 6204 8999 or email firstname.lastname@example.org.