The Capital Markets and Services Act 2007 (CMSA) sets out which activities in Malaysia's capital market need a licence. The Securities Commission Malaysia (SC) issues these licences and explains them in its Licensing Handbook.
What a CMSL covers
The SC's Licensing Handbook says there are eight types of regulated activities under the CMSA:
Dealing in securities.
Dealing in derivatives.
Clearing for securities or derivatives.
Fund management.
Dealing in private retirement schemes.
Advising on corporate finance.
Investment advice.
Financial planning.
A CMSL entitles an institution to carry on the business of one or more of these activities. The handbook says only a licence holder can carry on the regulated activities that its licence permits. So a licence for one activity does not cover the others.
CMSL vs CMSRL
A CMSL is held by a company. A Capital Markets Services Representative's Licence (CMSRL) is held by an individual. It lets that person carry on regulated activities on behalf of their principal, the company they work for.
The SC says those who intend to conduct a regulated activity on a regular basis must apply for a CMSRL through a CMSL holder. In other words, a licensed representative works through a licensed company.
Who does not need a CMSL
Some institutions are "registered persons" under Schedule 4 of the CMSA. The SC says registered persons may carry out certain regulated activities without applying for a CMSL. They include licensed banks, Islamic banks, insurance companies and takaful operators.
Registered persons must still follow the investor protection provisions of the CMSA. Certain other "specified persons" are listed in Schedule 3.
How to check a CMSL
Go to sc.com.my/investment-checker and search the company by name or company registration number. The result shows whether it is licensed or registered, its status and the regulated activities it may carry on. You can also search an individual representative by NRIC or passport number.
The SC also publishes the Investor Alert List of unauthorised entities and individuals. It says anyone who deals with them will not be protected under Malaysian securities laws. Bank Negara Malaysia's Financial Consumer Alert List names companies and websites that are not licensed or approved by the relevant regulators. Neither list is exhaustive, so a name that is missing from them is not proof of a licence.
SmartChecker shows register records and reviews for the companies it lists, with links back to the SC and other official sources.
Common questions
Does a CMSL cover every type of investment service? No. It covers only the regulated activities stated on it. Check the activities shown in the Investment Checker result.
Can someone deal with clients without their own licence? The SC says anyone who intends to conduct a regulated activity on a regular basis must apply for a CMSRL through a CMSL holder.
Do banks need a CMSL? Licensed banks and Islamic banks are registered persons under Schedule 4 of the CMSA. The SC says they may carry out certain regulated activities without a CMSL.
Where can I get help? Call the SC general line on 03-6204 8000.