The Securities Commission Malaysia (SC) has issued new Guidelines on Product Governance (PGG) to improve investor protection and support responsible product development and distribution in the capital market.
The PGG forms part of the SC’s ongoing efforts to enhance industry conduct and uphold market integrity.
It adopts a principle-based approach, giving firms the flexibility to implement governance frameworks suited to their business models while meeting regulatory expectations.
The guidelines apply to unlisted capital market products such as unit trusts and corporate bonds.
They do not apply to ordinary shares, customised over-the-counter derivatives, venture capital or private equity funds, or products offered through platforms registered with the SC.
Listed and traded capital market products are also excluded, as they are subject to existing regulatory controls.
Under the new framework, product issuers and distributors must establish clear controls, policies and procedures across the entire product lifecycle, including design, distribution and post-sale stages.
These measures are intended to align firms’ interests with those of investors by ensuring products are suitable for the intended target market, minimising potential harm, and encouraging collaboration between issuers and distributors.
The guidelines also place greater responsibility on company boards and senior management, requiring them to approve product launches and monitor performance.
Where necessary, firms must take corrective action to protect investor interests.
SC Chairman Dato’ Mohammad Faiz Azmi said,
“The PGG adopts a principle-based approach, allowing firms to implement their product governance framework that best suits their business model while still achieving its desired regulatory outcomes.
By implementing an effective product governance framework, firms will also be able to demonstrate their commitment to ethical and responsible business practices, which is key to building trust in investors and regulators.”
The guidelines will come into effect on 2 January 2026, giving market participants time to prepare.
Further information and the full document are available on the SC’s website.
Featured image: Edited by Fintech News Malaysia, based on image by leoaltman via Freepik
