SC Malaysia Broadens Sophisticated Investor Criteria to Include Knowledge, Experience
by Fintech News Malaysia February 6, 2024The Securities Commission Malaysia (SC) has expanded its definition of sophisticated investors, aiming to make the capital market more accessible.
The revised “Guidelines on Categories of Sophisticated Investors,” effective immediately, are part of the SC’s efforts to enhance market competitiveness and encourage wider investor participation.
The guidelines introduce a new category recognising the knowledge and experience of investors, allowing for the inclusion of those without the requisite financial criteria but who possess adequate financial knowledge and sophistication.
This category evaluates candidates based on educational qualifications, membership in recognised financial associations, and practical experience in sectors such as banking, capital markets, or insurance.
These changes aim to accommodate individuals with significant knowledge and experience, even if they do not meet traditional financial thresholds for high net worth individuals.
Other updates also include the consideration of an investor’s primary residence value (up to RM1 million) for sophisticated investor status and the expanded definition of a joint account to reflect a family’s total financial situation more accurately.
The updated guidelines and related documents are now accessible on the SC’s official website.
Dato’ Seri Dr. Awang Adek Hussin
The SC Chairman Dato’ Seri Dr. Awang Adek Hussin said,
“The criteria for sophisticated investors have been broadened to include a wider range of individuals who can contribute to the market’s growth and stability. In 2023, the domestic capital market grew to RM3.8 trillion from RM3.6 trillion in the previous year.
This presents significant opportunities for the market to attract a more diverse investor base regionally and encourage greater capital flow into sophisticated product and market segments.”
