KUALA LUMPUR (June 15): The Securities Commission Malaysia (SC) is looking at providing flexibility for the calculation of high net worth individual thresholds, and expanding the qualification criteria.

The expansion of the qualification criteria of sophisticated investors “will take into account their knowledge and experience” as part of efforts to widen the sophisticated investor base, said the SC managing director Kamarudin Hashim.

Concurrently, the regulator is also looking at expanding angel investor participation beyond the private market and micro, small and medium enterprise (MSME) space, Kamarudin said in his keynote address at the International Institutional Investor Series 2023 (IIIS 2023) here.

“[All] this ensures the basis of investor categorisation serves as the most effective means to categorise investors, which in turn would enable them to be accorded the appropriate level of regulatory protection and at the same time facilitate capital formation,” Kamarudin said.

According to current guidelines, a high net worth individual is defined as someone who has RM3 million of net assets, with gross annual income of RM300,000. Meanwhile, high net worth entities are required to have RM10 million in assets under management for public companies, or net assets for corporations and partnerships.

Meanwhile, Kamarudin said the SC is set to introduce a framework to allow licensed fund managers to launch foreign funds through related corporations, with initial focus on high net worth entities and institutional investors.

The framework, to be launched by the end of this year, will “add greater diversity to the ocean of fund options in the domestic capital markets”, Kamarudin said.

“While the first phase of this framework is targeted to institutional investors and high net worth entities, the SC is also reviewing the next phase of liberalisation to potentially include high net worth individuals,” Kamarudin said.

The review will ensure “controls are in pace for parity between domestic and foreign fund managers”, he said.

Close consultation and engagement with stakeholders for the future phase of the implementation will take place in 2024, he added.