The Securities Commission (SC) has announced plans to introduce a "foreign exempt schemes" framework by the end of the year. This framework will enable foreign fund operators to lodge and launch funds in Malaysia, targeting high net worth entities and institutional investors. Under this framework, foreign fund operators that are related corporations to SC-licensed fund managers will be able to submit and initiate their foreign funds.
SC aims to diversify onshore fund options in the domestic capital market, expanding the range of products available to fund managers. The first phase of this framework will focus on institutional investors and high net worth entities, with subsequent phases anticipated to include high net worth individuals (HNWIs).
SC aims to ensure parity between domestic and foreign fund managers while implementing appropriate controls. Close consultation and engagement with industry stakeholders are planned for 2024.
The move aligns with the SC's Capital Market Masterplan 3 (CMP3), aiming to increase investor inclusivity, provide access to diversified investment options, and promote higher yields. Additionally, SC intends to expand the qualified investor base by considering knowledge, experience, and angel investors' participation in various capital market products beyond private markets and micro, small, and medium enterprises (MSMEs).
These efforts aim to accurately categorize investors, provide appropriate regulatory protection, and facilitate capital formation. In a separate note, SC confirms the industry's resilience and sound liquidity management practices, enabling fund managers to meet investor needs and explore new areas of interest, such as foreign funds and sustainable investments.