Securities Commission Malaysia Allows Trading, Introducing Representatives For Stockbroking Industry

 08/10/2012

The Securities Commission Malaysia (SC) today issued the Guidelines for Registered Persons which provides for two new classes of registered persons, namely Trading Representative and Introducing Representative.

The introduction of these two new categories of registered persons will widen the opportunities for fresh talent to join the stockbroking industry and ensure sustainable growth of the industry. It will strengthen the role of dealers and dealers’ representatives by facilitating provision of specialized services, allowing focus on client servicing and enabling access to a wider client base.

The move is set to increase the productivity of over 6,000 licensed representatives and provide new job opportunities in the Malaysian capital market for thousands of young Malaysian.

“The SC estimates the size of Malaysia’s capital market to more than double from RM2.0 trillion in 2010 to RM4.5 trillion by 2020, while the equity market is projected to grow from RM1.2 trillion in 2010 to RM2.4 trillion in 2020. The stockbroking industry as a critical pillar of our capital market must be encouraged to build greater intermediation capacity,” said Datuk Ranjit Ajit Singh, Chairman of the SC.

The guidelines encapsulate the criteria for entry, permissible scope of activities, registration process as well as the on-going obligations of the stockbroking company for the registered person’s supervision, conduct, on-going training and development.

A person may apply to be registered either as a Trading Representative or Introducing Representative, but not for both. Interested applicants are subjected to entry and competency requirements and they will have to successfully complete a two-day familiarisation programme before submitting their application to the SC.

Upon registration with the SC, the Trading Representatives will be able to take orders and execute trades, while the Introducing Representatives can market and refer prospective clients to the stockbroking companies.

All registered persons, including the Trading Representatives and Introducing Representatives, must comply with all relevant provisions of securities laws and guidelines and will be expected to fulfill the requisite standard of care and responsibility towards their customers.

The new guidelines was issued following the announcement made by Prime Minister Dato’ Sri Najib Tun Haji Abdul Razak in July, that the SC would introduce two new categories of registered persons to strengthen the role of dealers, facilitate provision of specialized services and to create access to greater client base.

The guidelines are available at the SC website www.sc.com.my.