Introduction
A Malaysian fund manager is defined as a person, for valuable consideration, provides management services which may include investment advice or administrative services in respect of securities for the purposes of investment, including dealing in securities. For a fund manager undertaking Islamic fund management activities, its operation shall also comply with Shariah principles.
Eligibility
The eligible applicant to carry on business as a fund manager include:
-An individual who holds a relevant degree or professional qualification to carry on fund management activities. We may also consider an applicant with at least minimum qualification of diploma holder and 3 years’ relevant experiences in capital market or direct experiences in fund management activities.
-An approved fund manager or any provider of such services from a country or jurisdiction who is a member of the International Organization of Securities Commission (IOSCO)
-A person who does not fulfill the above conditions may also be considered, provided that the fund management activities are run and managed by suitably qualified and experienced individuals.
-The applicant is required to establish a Malaysian company incorporated or registered under Companies Act 1990 (LCA).
Permitted activities
The permitted activities for a licensed fund manager may include:
-Management services
(a) Acting or offering to act as portfolio manager on behalf of the clients for a portfolio of securities including funds.
(b) Managing activities in the acquisition or disposal of a portfolio of securities including funds.
(c) Managing clients’ discretionary accounts including private funds.
-Investment advices
(a) Conducting securities analysis and making investment recommendations based on client’s investment objectives and financial situation.
(b) Providing advice concerning securities including the issuance or promulgation of research report and analysis.
(c) Providing consultancy and advisory services relating to corporate finance and financial planning matters for corporate clients.
-Administrative services
(a) Making submissions on behalf of clients in respect of securities including any other reporting requirements.
(b) Issuing any documents which are deemed to be a prospectus
-Dealing in securities
(a) Quoting two way prices and dealing in securities.
(b) Arranging for the sale or purchase of securities including that are not listed on a stock market of a stock exchange, issued by, belonging to or on behalf of clients.
(c) Underwriting of securities and placement out of such underwritten securities to be commensurated with the adequacy of its financial resource. Hence, the fund manager shall ensure that its risk management plan also clearly sets out the extent of financial requirements to sustain its operational business based on the risk appetite or tolerance levels in relation to the fund management strategies. This has to be reviewed at least on a yearly basis in line with its business plan.
Licensing requirements
Submit a duly completed application and all the relevant supporting documents .
Provide a business plan covering the business intentions, types of services to be provided, target market, three years revenue projections and manpower including the equity structure of company in regard to the percentage of shareholding.
Demonstrate the existence of both adequate financial resources and insurance coverage.
The applicant, proposed directors and principal officer including any other relevant person are fit and proper persons as per the Guidelines on Fit and Proper Person.
Subject to the merit of each application, additional information may be requested.
Operational requirements
-The fund manager must maintain a paid-up capital unimpaired by losses of at least RM300,000 equivalent in any foreign currency throughout its operations. Where the fund manager has Asset Under Management (AUM) of more than RM150 million, it must maintain additional capital equivalent to 0.2% of the AUM in excess of RM150 million.
-Maintain a professional indemnity insurance policy with coverage of not less than RM1 million or its equivalent in any foreign currency throughout its operations.
-Maintain a registered office in Malaysia and ensure that the business must be carried on in, from or through Malaysia.
-Ensure that the shareholder(s), director(s), principal officer, representative including any other relevant person meet the requirement of the Guidelines on Fit and Proper Person.
-Establish an adequate internal policies and procedures for its operations, compliances, internal controls, corporate governance and risk management, including its business continuity plan. These have to be regularly reviewed to ensure that they remain appropriate, relevant and prudent.
– Appoint an approved auditor to carry out an annual audit of its accounts
–Conduct its business with due diligence and sound principles, maintain adequate and proper records and books of accounts in Labuan in line with the Directive on Accounts and Record-keeping Requirement for Labuan Entities issued by Labuan FSA and indicate clearly its name and license or registration number on its letterhead, stationery and other documents.
-Obtain prior approval from Labuan FSA on the following:
Changes of its identity, place of business or office in Labuan or outside Labuan, ownership and shareholding of the fund manager.
Appointment of director(s) and shareholder(s). The Labuan fund manager must have at least two directors.
Comply with relevant laws and regulations of the jurisdiction where it intends to operate in.
Market conduct and practices
-The fund manager shall adhere with the following requirements to promote market integrity and investors’ confidence.
-Integrity and fair dealing
(a) Conduct its business with integrity and fair dealing to avoid misleading and deceptive acts or representation.
(b) Conduct its business in a manner that promotes a fair and orderly market.
(c) Avoid any conflict of interest arising or, where a conflict arises, should ensure just treatment to all their clients by disclosure, internal rules on confidentiality or other accepted practices as deem fit.
-Skills, care and diligence
(a) Conduct its business with due care, skill and diligence.
(b) Act competently and diligently in regard to all transactions between themselves and their clients.
(c) Demonstrate that the advice provided, or exercise of discretion, are appropriate for the clients.
– Acting in client’s interest
(a) Act in the best interest of its clients and must not jeopardise or prejudice clients’ interests.
(b) Provide relevant information to its clients in a manner that is fair, accurate and timely.
-Complaints
(a) Have procedures in place, to deal with clients’ complaints effectively and fairly through a simple and equitable process. These procedures should be well disclosed and easily accessible.
(b) Details of the complaints, responses and any action taken must be recorded and maintained by Labuan fund manager.
– Compliance
(a) Establish proper compliance function to ensure its business complies with the relevant directive, guidelines and reporting requirements from time to time.
(b) Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of .
(c) Ensure proper policies and procedures are in place to ensure a sound compliance framework which safeguards clients’ interests.
(d) Take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management and supervisory system.
Reporting requirements
-The fund managers are required to submit the following :
Submit a copy of its audited financial statements to the Supervision and Enforcement Department within six (6) months after the closure of each financial year, either in hardcopy or digital format; and
Other statistics and information may require from time to time.
Annual Licence Fee
|
Incorporation of License Company whose paid up Capital less than Ringgit Malaysia (RM) 1 Million + Name Reservation + Registered Office Address + 1 Bank Account Opening + 1 Year Government Fee + License Application to LFSA |
3,500.00 |
|
LFSA License Application Fee (One Application Fee Only) but do Not include + LFSA Submission Fee + LFSA Annual License Fee |
3,500.00 |
|
Second year annual fee for License Company |
3,200.00 |
|
Incorporation & Annual Fee of a Foreign Registered Company in Labuan whose paid up Capital less than Ringgit Malaysia (RM) 50,000 + Name Reservation + Registered Office Address + 1 Year Government Fee |
3,500.00 |
|
Second year annual fee for Foreign Registered Company |
3,200.00 |