KUALA LUMPUR (Dec 30): The Securities Commission Malaysia (SC) has warned that any individual conducting a business of offering investment advice without a licence is an offence.
The offence under the Capital Markets and Services Act 2007 (CMSA) is punishable with a fine not exceeding RM10 million or imprisonment not exceeding 10 years or both, if found guilty, said the regulator in a statement.
"The SC cautions members of the public against dealing with unlicensed investment advisers, as they could be defrauded or used as part of a market manipulation scheme.
"Investors are reminded to verify the licensing status of platforms, companies and individuals offering capital market services or products including the provision of investment advice, before making any investment decision," the SC said.
The regulator has issued a guidance note in response to the queries and complaints received regarding various social media, chat rooms and messaging applications that appear to be providing specific stock recommendations and investment advice to the public for a fee.
The SC said its Guidance Note on Provision of Investment Advice aims to provide clarity to the industry and members of the public on conduct which the SC considers as falling within the regulated activity of providing investment advice under CMSA.
Considering that this activity is gaining more attention, the SC said the guidance note seeks to provide clarification as to when the activity of giving investment advice is likely to be considered as a regulated activity, for the purposes of licensing under the CMSA.
According to the SC, a person is required to be licensed by the SC for providing investment advice under the Schedule 2 of the CMSA, when the activity fulfils any one of the following:
(a) carrying on a business of advising others concerning securities or derivatives; or
(b) as part of a business, issues or promulgates analyses or reports concerning securities or derivatives.