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SC broadens sophisticated investor categories, recognising knowledge and experience
Feb 06, 2024
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KUALA LUMPUR (Feb 5): The Securities Commission Malaysia (SC) has announced an expansion of sophisticated investor categories, effective Monday, through the introduction of the new "Guidelines on Categories of Sophisticated Investors".
Key features of the expansion include the introduction of a "Knowledge and Experience" category, considering the knowledge and experience of sophisticated investors. Additionally, enhancements to current categories offer flexibility in existing financial thresholds for high net worth individuals.
The new "Knowledge and Experience" category accommodates individuals who may not meet financial tests but can demonstrate financial knowledge sophistication to engage in relevant market offerings.
This category assesses potential investors based on their education, recognised financial association membership, and practical experience in sectors such as banking, capital markets, or insurance.
Another crucial change is the inclusion of an investor's primary residence value, capped at RM1 million, in assessing their qualification as a sophisticated investor.
The definition of a joint account is also expanded to encompass accounts with a spouse or child, including total net joint annual income and investment portfolios. This expansion offers a more accurate representation of a family's collective financial status and investment potential.
In a statement on Monday, SC said the expansion's primary aim is to strengthen capital market accessibility, maintain competitiveness, and encourage increased investor participation.
SC chairman Datuk Seri Dr Awang Adek Hussin emphasised that the evolving sophistication of the Malaysian capital market has resulted in diverse financing needs and varying investment risk appetites.
"The criteria for sophisticated investors have been broadened to include a wider range of individuals who can contribute to the market’s growth and stability," he said.
He highlighted the capital market's growth to RM3.8 trillion in 2023 from RM3.6 trillion in the previous year, presenting significant opportunities to attract a more diverse investor base and encourage greater capital flow into sophisticated product and market segments.
Disclaimer
The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile.
The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, Bond and Sukuk Information Platform Sdn Bhd (“the Company”) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.
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