KUALA LUMPUR (Feb 11): The Securities Commission Malaysia (SC) is set to introduce a framework to clarify licensing requirements for cash trust schemes investing in capital market products, as part of efforts to strengthen regulatory oversight.

The regulator is in the midst of finalising the framework, which will initially cover only capital market-related activities, the Ministry of Finance (MOF) said in a written parliamentary reply on Wednesday.

The move comes amid concerns over cash trust schemes and their impact on investors and confidence in the country’s financial markets.

According to the MOF, cash trust schemes are managed by trust companies registered with the Companies Commission of Malaysia (SSM) under the Trust Companies Act 1949 and are also subject to the Trustee Act 1949.

Since Jan 1, 2026, the SC’s authority has been expanded to determine which trust companies and controlled activities do not require a licence, following amendments to the Capital Markets and Services Act 2007.

The MOF noted that the SC has taken steps, including prosecuting a trust company for conducting controlled capital market activities without a licence, engaging with the Association of Trust Companies Malaysia for benchmarking, investigating several trust companies suspected of unlicensed activities, and conducting public awareness campaigns on the features and risks of cash trust investments.

The MOF stressed that the SC will continue to strengthen supervision and take firm follow-up action to ensure compliance and protect investors.

The SC and SSM have also agreed to collaborate strategically and comprehensively, with a joint framework being developed to define scope, roles and mechanisms for coordinated action against cash trust-related issues.

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