KUALA LUMPUR: The Securities Commission (SC) has introduced the Foreign Exempt Scheme (FES) framework, providing high-net-worth entities and institutional investors greater onshore access to foreign investment funds, as part of its efforts to liberalise the fund management industry.
It also is allowing flexibility to wholesale fund managers seeking to invest in alternative investment products beyond the current conventional assets such as securities, derivatives, money market instruments and deposits.
The SC's effort aims to not only enhance the breadth and depth of the market but also to ensure an effective regulatory regime that facilitate product innovation while fostering an inclusive investment environment for investors with various risk appetites and needs.
The SC Chairman, Datuk Seri Dr. Awang Adek Hussin said in a statement, that by giving access to a wider range of investment options, high-net-worth entities and institutional investors will have more opportunities to diversify their portfolios.
"The FES framework opens up new avenues for high-net-worth entities and institutional investors to access funds offered by foreign players that are a related corporation to a SC-licensed fund management company," he said.
"Additionally, these measures enable the fund managers to offer more products and investment choices to investors locally, aligning with the SC's efforts to promote innovation and accessibility," Awang Adek said.
The revised guidelines relating to these measures, which will take effect on August 29, 2023 include; guidelines for the Offering, Marketing, and Distribution of Foreign Funds (OMD Guidelines) and guidelines on Unlisted Capital Market Products under the Lodge and LaunchFramework (UCMP Guidelines)
The revised OMD guidelines also allow secondary listing of non-plain vanilla foreign exchange-traded funds (ETF), promoting more investment opportunities in the Malaysian market. This is subject to five such ETFs per foreign operator.
The enhancements to the guidelines provide clarity on expectations regarding the responsibilities of submitting parties for foreign funds, ensuring a clear and streamlined process.