Malaysia’s securities regulator now requires investment-focused trust companies engaged in the local capital market to be licensed.
Securities Commission Malaysia (SC) announced the new rule in a practice note issued on June 1.
However, trust companies that provide investment-related services which are “solely incidental” to their conventional trust business are exempted from holding a capital market services licence.
For example, a trust company managing a family’s education or estate trust doesn’t need a licence to provide financial planning, investment advice and fund management for the purpose of preserving the value of the trust.
But a trust company that promises projected annual returns from investment for the benefit of beneficiaries and mainly invests in capital market products will need to be licensed.
