Cross-Border Webinar Without a Local Licence
A Singapore-based asset manager plans a 45-minute webinar for 30 Malaysian high-net-worth prospects to introduce a Cayman-domiciled fund. The firm holds no Malaysian capital markets licence. The fund is not registered or approved in Malaysia. The webinar was initiated by the firm's marketing team, not by the prospects. The slides include three-year performance, a 'target 9% return' chart and a QR code to request the private placement memorandum. A Malaysian lawyer's email says 'reverse solicitation should cover this' without further analysis. One attendee asks in the chat whether the fund is Shariah-compliant and whether units can be redeemed monthly. The head of distribution wants to send the factsheet to all 30 attendees after the webinar and follow up by phone. A compliance analyst flags that the firm has no local distributor agreement.
1. Can the firm proceed with the webinar as planned?
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The firm should not proceed as planned without a specific local-law analysis and a compliant structure.
Reasoning:
- The webinar is firm-initiated marketing, not reverse solicitation. Reverse solicitation generally applies where the client approaches the firm on its own initiative; here the marketing team invited the prospects.
- The fund is unregistered in Malaysia and the firm has no licence or local distributor agreement. Sending a QR code for the private placement memorandum is an active solicitation step.
- A one-line lawyer's email saying 'reverse solicitation should cover this' is not sufficient. The firm needs written advice on the applicable exemption, investor eligibility, advertising restrictions and filing requirements.
- The 'target 9% return' chart and three-year performance may be misleading if presented without balanced risk disclosure and the basis of the target.
Options are to cancel, restrict the audience to jurisdictions where the firm is permitted, or restructure through a licensed local distributor after advice.
2. If the firm still wants to reach Malaysian prospects, what changes would make the approach more defensible?
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A defensible approach would start with local counsel and a licensed distribution arrangement.
Possible changes:
- Replace the firm-initiated webinar with a local licensed distributor's event where the distributor is responsible for marketing and suitability.
- Limit invitations to investors who clearly fall within an available exemption, and verify eligibility before the event, not after.
- Remove the QR code and any direct request mechanism unless the exemption permits it.
- Replace the 'target 9% return' chart with balanced disclosure of risks, fees, liquidity and the possibility of loss.
- Have a script that does not answer personalised suitability questions in the chat; direct them to the local distributor.
- Record attendance, eligibility checks, the advice obtained and the basis for relying on any exemption.
Reverse solicitation cannot be manufactured by calling a firm-initiated event 'educational.' The label does not control; the substance of who initiated the contact does.
3. How should the firm handle the post-webinar factsheet and follow-up requests?
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The firm should not send the factsheet to all 30 attendees. It should separate permitted from non-permitted follow-up.
Next steps:
- If the webinar should not have been marketed, do not compound the breach by distributing the private placement memorandum or making follow-up calls.
- If local advice confirms a limited exemption, send documents only to verified eligible investors through the approved channel.
- Treat chat questions about Shariah compliance and monthly redemption as requests for factual information, not as consent to a cross-border sale. Answer only within the approved script.
- Log who received what, when and under which exemption.
- Escalate the compliance analyst's distributor-agreement concern to the head of compliance and the fund board.
- Review whether earlier webinars created a recurring marketing pattern.
The key judgement is that a single improper webinar can create a licensing and reputational issue, and the follow-up is often the more visible evidence of solicitation.