Securities Commission Malaysia (SC)

Overview

The Securities Commission Malaysia (SC) is Malaysia's statutory body responsible for regulating and developing the capital markets. Established on 1 March 1993, the SC functions as a self-funded regulator with comprehensive authority over securities markets, derivatives, capital market intermediaries, and increasingly, digital asset exchanges and trading platforms.

As Malaysia's primary capital markets regulator, the SC maintains direct responsibility for rule-making, enforcement, market development, and supervision of all licensed market institutions, exchanges, and intermediaries operating within the Malaysian financial ecosystem.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

The Securities Commission Malaysia regulates Malaysia's comprehensive capital markets through:

Securities Markets

• Equity and fixed-income securities offerings and trading

• Initial public offerings (IPO) and listing standards

• Takeover and mergers regulation under the CMSA

• Prospectus and disclosure requirements

• Continuous disclosure obligations for listed companies

Derivatives Markets

• Futures and options trading and clearing

• Derivatives exchange operations

• Clearing and settlement systems oversight

• Risk management standards for derivative intermediaries

Market Institutions

• Bursa Malaysia (stock exchange) - regulatory oversight

• Malaysia Clearing House - clearing and settlement regulation

• Licensed stock brokers, remisiers, and investment advisers

• Trading, custody, and depository service providers

Fundraising and Capital Raising

• Securities offerings and prospectus requirements

• Investment funds (mutual funds, unit trusts)

• Real Estate Investment Trusts (REITs)

• Islamic capital market instruments (Sukuk, Islamic funds)

• Venture capital and private equity fund regulation

Digital Asset Regulation

Regulatory Framework

The SC established its Digital Assets regulatory regime in 2019 through the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019. This framework classifies certain digital assets as securities under the CMSA.

Regulated Digital Asset Entities

Under the SC's Digital Assets Guidelines, the following entities require registration with the SC:

• Digital Asset Exchanges (DAX): Platforms facilitating trading of prescribed digital assets

• Digital Asset Custodians (DAC): Service providers holding digital assets on behalf of clients

• Initial Exchange Offerings (IEO): Token offering mechanisms conducted through registered exchanges

• Digital Asset Market Operators: Other prescribed digital asset service providers

Digital Asset Classification

The regulatory framework classifies digital assets into two categories:

1. Prescribed Digital Assets (Securities): Digital tokens and currencies meeting securities definitions under CMSA and subject to SC regulation

2. Non-prescribed Digital Assets: Cryptocurrencies not classified as securities (regulatory authority shared with Bank Negara Malaysia for financial system integrity monitoring)

Registration and Compliance Requirements

Digital asset service providers must:

• Apply for SC registration and obtain regulatory approval

• Meet capital adequacy and operational risk standards

• Implement robust anti-money laundering (AML) and know-your-customer (KYC) procedures

• Establish cybersecurity and data protection frameworks

• Maintain segregated customer assets

• Provide investor protection mechanisms

• Submit to regular SC examination and supervision

Recent Developments

As of 2025, the SC continues to develop its digital asset regulatory framework, with the Prime Minister indicating consideration of dedicated crypto and blockchain legislation. [UNVERIFIED - pending confirmation from official SC communications]

Regulatory Framework

The SC's ultimate statutory responsibility is protecting investors. Investor protection mechanisms include:

Licensing and Conduct Standards

All market intermediaries must meet:

• Fit and proper person standards for directors and senior management

• Capital adequacy requirements proportionate to business risk

• Segregation of customer assets (for brokers and custodians)

• Conflicts of interest management requirements

• Complaints handling and dispute resolution procedures

Disclosure and Transparency

Market participants must comply with:

• Prospectus and disclosure standards for public offerings

• Continuous disclosure requirements for listed companies

• Corporate governance standards and best practices

• Related party transaction disclosure

• Beneficial ownership transparency requirements

Investor Education

The SC operates InvestSmart, an investor education portal providing:

• Market literacy resources for retail investors

• Fraud and scam awareness materials

• Investment product guides and explainers

• Complaint lodging mechanisms

Market Integrity

SC enforcement focuses on preventing:

• Insider trading and market manipulation

• Fraudulent securities offerings

• Unauthorized securities trading

• Front-running and other intermediary misconduct

• Market abuse and unfair practices

Regulatory Powers

Investigative Authority

The SC possesses broad investigative authority under the CMSA and SCA including:

• Power to require information and documents from regulated entities

• Authority to conduct examinations and inspections

• Power to compel testimony and witness examination

• Subpoena authority for books, records, and other evidence

• Coordination with other regulators on cross-border investigations

Enforcement Actions

The SC enforces capital markets law through multiple mechanisms:

• Administrative Actions: License cancellation, suspension, or restriction

• Warnings and Undertakings: Formal cease-and-desist orders and compliance undertakings

• Civil Remedies: Injunctions, restitution orders, and civil enforcement

• Criminal Prosecution: Referral to prosecutors for criminal charges under CMSA and SCA

• Market Discipline: Trading halts, public censures, and enforcement notices

Surveillance and Market Abuse Detection

The SC maintains:

• Real-time market surveillance capabilities for insider trading detection

• Coordination with Bursa Malaysia on trading surveillance

• Cross-border coordination for international market abuse cases

• Public enforcement action reporting and transparency

Regulatory Role and Function

Legal Foundation

Founding Legislation

• Securities Commission Malaysia Act 1993: The principal statutory instrument establishing the SC as a self-funded statutory body with investigative and enforcement powers. Established 1 March 1993.

• Capital Markets and Services Act 2007 (CMSA): Consolidated securities and futures regulation, replacing the Securities Industry Act 1983 and Futures Industry Act 1993. Consolidated previously scattered fundraising provisions under Part IV of the Securities Commission Act 1993. Came into force 28 September 2007.

Regulatory Scope

The SC's legal mandate covers:

• Development and maintenance of secure, efficient, and orderly capital market operations

• Rule-making and standard-setting across securities and derivatives markets

• Licensing and conduct regulation of all market intermediaries

• Market conduct enforcement and misconduct prevention

• Investor protection and market integrity oversight

• Regulation of registered capital market institutions (exchanges, clearing houses, market operators)

The SC is the sole regulator for all entities and persons operating under the CMSA licensing framework.

Licensing and Authorization Relevance

Innovation Framework

The SC recognizes the need to balance innovation with investor protection and market integrity. The regulator engages with fintech and innovation through:

Digital Assets and Blockchain

• Registered digital asset exchange licensing (DAX regime)

• Digital custodian regulation (DAC regime)

• Token offering frameworks (IEO guidelines)

• Exploration of distributed ledger technology applications in capital markets

Regulatory Sandbox Requires verification from official sources

The SC operates or has operated regulatory sandbox programs to allow innovation testing within controlled parameters, though specific current sandbox details require official SC confirmation.

Policy Development

The SC participates in emerging technology policy development through:

• Consultation papers on digital asset regulation updates

• Collaboration with international regulators on cross-border fintech standards

• Engagement with industry on emerging market infrastructure

• Participation in ASEAN Capital Markets Forum (ACMF) working groups on innovation

Payments and Money Movement Relevance

The Securities Commission Malaysia (SC) has the following relevance to payments and money movement in Malaysia:

Payment Systems Governed or Overseen

The Securities Commission Malaysia (SC) does not directly operate payment systems. Its role in payment infrastructure is indirect:

The entity's primary payment relevance is through oversight of post-trade infrastructure (clearing, settlement, and custody) rather than direct operation of payment systems.

Relationship to Other Regulators

Regional Leadership

The SC holds significant regional influence through:

• ASEAN Capital Markets Forum (ACMF): SC leadership role in regional securities regulatory coordination

• 2025 ASEAN Chairmanship: SC Executive Chairman Dato' Mohammad Faiz Azmi chaired the ACMF in conjunction with Malaysia's 2025 ASEAN Chairmanship

International Standards Alignment

The SC aligns with:

• International Organization of Securities Commissions (IOSCO) standards and principles

• FATF (Financial Action Task Force) AML/CFT recommendations

• Basel Committee prudential standards (where applicable)

• G20 financial stability standards

Cross-Border Cooperation

The SC maintains:

• Bilateral memoranda of understanding with foreign regulators

• Information sharing agreements with international authorities

• Coordination on cross-border investigations and enforcement

• Mutual recognition agreements for specific regulated entities

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Official Contact Information

Address:

3 Persiaran Bukit Kiara

50490 Kuala Lumpur

Malaysia

General Contact:

• Telephone: +603-6204 8000

• Email: [email protected]

• Website: https://www.sc.com.my/

Senior Leadership

Executive Chairman:

• Dato' Mohammad Faiz Azmi (Appointed June 16, 2024 - June 15, 2027)

• Former Chairman of PwC Malaysia (11 years until 2023)

• 30+ years professional experience

• Leadership of Capital Market Masterplan 4 (2026-2030) development

Key Resources

• Digital Assets Guidelines: https://www.sc.com.my/regulation/guidelines/digital-assets

• Licensed and Registered Persons Database: https://easy.seccom.com.my:8222/

• Capital Markets and Services Act 2007: https://www.sc.com.my/regulation/acts/capital-markets-and-services-act-2007

• InvestSmart Investor Portal: https://investsmartsc.my/

• Board Members: https://www.sc.com.my/about/board-members

• Annual Report 2024: https://www.sc.com.my/annual-report-2024

Regulatory Publications

The SC publishes:

• Annual Reports and Accounts

• Policy consultation papers

• Enforcement action notices and annual enforcement reports

• Guidelines and regulatory circulars

• Market development announcements

Notes on Naming and Language