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SIDC Module 19 study materials
SIDC Module 19 study resources

SIDC Module 19: SIDC Module 19 - Licensing and Conduct Framework

SIDC Module 19 · Work through your exam, one topic at a time.

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SIDC Module 19 - Licensing and Conduct Framework

The source does not state Module 19's topic outline, so confirm the current topic list with SIDC before you build a revision plan. What does not change between SIDC capital-markets modules is the legal spine: the Capital Markets and Services Act 2007 (CMSA), Securities Commission Malaysia (SC) licensing, and conduct obligations.

Licensing structure

  • A firm needs a Capital Markets Licence (CMSL) to carry on a regulated activity; the individual performing it needs a Capital Markets Services Representative's Licence (CMSRL) and may act only for that CMSL holder.
  • Regulated activities sit in Schedule 2 CMSA: dealing in securities, dealing in derivatives, fund management, advising on corporate finance, investment advice, financial planning and clearing for derivatives.
  • Working outside your licensed activity - or for a second firm - is a breach even where the client consents.

Conduct and market integrity

  • Know your client, assess suitability, disclose and manage conflicts, segregate client assets, keep records.
  • Part V CMSA prohibits false trading (s.178), market manipulation (s.179) and insider trading (s.188).
  • AML/CFT duties flow from AMLA 2001 and SC guidelines: customer due diligence, ongoing monitoring, suspicious transaction reports.
  • Bursa Listing Requirements bind listed issuers; they are not the conduct rulebook for unlisted products.

Worked example

A representative licensed for fund management, employed by Firm A, markets a private debt fund, tells investors to pay subscription cheques into his personal account, and promises a "guaranteed" 12%. Diagnosis: (1) soliciting and receiving subscriptions is dealing in securities, outside his fund-management CMSRL; (2) client money belongs in the firm's trust account, never a personal account; (3) a guaranteed return misstates risk. Each is a licence breach; together they warrant a suspicious transaction report.

Traps

Confusing CMSL with CMSRL. Assuming one licence covers both securities and derivatives. Treating Bursa rules as the entire rulebook. Relying on an unverified syllabus summary instead of the current SIDC module list.