Malaysia’s SC strengthens ties with EU authorities to enhance supervisory oversight
22 August 2013
News, Asia, Malaysia, Europe
By Asia Asset Management
The Securities Commission Malaysia (SC) has signed a series of Memoranda of Understanding (MoUs) with European Union (EU) securities regulators to cooperate on the supervision of the cross-border offering of alternative investment funds, as required under the EU Alternative Investment Fund Managers (AIFM) directive.
Under this arrangement, the SC has entered into MoUs with 24 countries, namely Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden and the United Kingdom.
Signatories of the MoUs agree to provide mutual assistance in the supervision and oversight of managers of alternative investment funds, their delegates and depositories that operate on a cross border basis in the interest of investor protection, fostering market and financial integrity and maintaining confidence and systemic stability.
These supervisory arrangements will pave the way for Malaysian fund managers to perform fund management activities on behalf of EU fund managers to manage and market alternative investment funds, including private equity and infrastructure funds, in the EU. EU fund managers will also be able to manage Malaysian alternative investment funds, providing a gateway for Malaysia to attract international capital from foreign investors.
Malaysia’s fund management industry has grown to over 550 billion ringgit (US$167 billion) with 81 licensed fund managers, who are potentially set to benefit from these cross-border arrangements. As Malaysia’s fund management industry moves towards greater internationalisation, the SC is asserting the importance of putting in place close cooperation and collaboration with foreign authorities to facilitate orderly industry development and growth.
The SC has previously entered into supervisory cooperation arrangements with authorities from Luxembourg and Ireland to facilitate cross-border opportunities for the fund management industry. The SC has also entered into mutual recognition arrangements with its regulatory counterparts in Hong Kong and the Dubai International Financial Centre to allow for the distribution and marketing of Islamic funds between Malaysia and these jurisdictions.
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