KUALA LUMPUR (Aug 21): The Federation of Investment Managers Malaysia (FIMM) has reprimanded Harveston Wealth Management Sdn Bhd (HWM) for allegedly breaching its consolidated rules (FCR) and code of ethics.

HWM, a corporate unit trust scheme adviser (CUTA) and corporate private retirement scheme adviser (CPRA), was required to pay a fine of RM46,329.66 for its misconduct.

In a statement, FIMM said HWM had broken its rules by allowing non-registered persons to deal with unit trust and private retirement schemes (PRS).

“HWM had breached rule 3.1.1. of the FCR and paragraph 4.3(g) of FIMM Code by appointing two persons who were, at the material time, not registered with FIMM to market/distribute unit trust scheme (UTS) on its behalf,” said FIMM.

HWM was also found to have violated a separate rule by allowing four UTS and PRS consultants to market UTS on its behalf while being registered with other distributors.

Under rule 3.1.4 of the FCR, a consultant must only represent one principal for UTS and PRS respectively at any one time. A consultant must only deal in the schemes distributed by one’s principal.

Additionally, HWM was said to have parked consultants under multiple agency units and allowed its lowest-tiered consultants to recruit new consultants. This was in breach of rule 3.4.1, and items 1 and 2 of the CUTA category, FIMM said.

FIMM said this public reprimand was imposed to send a strong message that it would take action against those who fail to comply with rules issued by FIMM.

"This is to deter UTS, PRS consultants and distributors from committing any misconducts and reminding them that it is crucial to observe FIMM’s rules when marketing and distributing UTS and PRS in Malaysia to protect the interests of the investing public,” it said.