SC Introduces Clearing as a New Regulated Activity

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Securities Commission Malaysia (SC) today introduced amendments to its regulatory framework to include clearing for securities and derivatives as a new regulated activity.

This framework will decouple clearing and trading functions into two distinct regulated activities, allowing intermediaries to specialise in their niche services. The entrance of new stand-alone execution and clearing intermediaries, including foreign owned entities, will transform the competitive dynamics of the capital market, and enhance cost efficiency for trading and clearing activities.

The operationalisation of the new framework will take a phase approach, starting with the derivatives market, given the readiness of its market infrastructure to cater to a wider intermediary segment.

In addition, the SC is also broadening the framework for Marketing Representatives across all regulated activities. These marketing representatives will be able to refer clients to their principals within the permissible parameters, provided in the Guidelines for Marketing Representatives.

This framework is in line with SC’s effort to enhance business opportunities of licensed intermediaries and facilitate access to a wider client base.

The changes on Clearing as a regulated activity are outlined in the updated Licensing Handbook, and the relevant guidelines for the Marketing Representatives are available at www.sc.com.my

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