SC to enhance role of trusties, custodians

PETALING JAYA: Securities Commission Malaysia (SC) is seeking public feedback on a proposed regulatory framework for trustees and custodians in the Malaysian capital market.
In a statement yesterday, the regulator said it recognises the significant role played by trustees and custodians in maintaining investors’ trust in the capital market by safeguarding investors’ assets and interest. 
Currently there are 90 custodians and trustees safekeeping about RM1.7 trillion worth of assets on behalf of investors.
In view of the important functions undertaken by these entities, SC is proposing to revise the regulatory framework that include streamlining entry standards and on-going conduct obligations that will create a level playing field among trustees and custodians. 

“To enhance efficiency, the SC also proposes a one-time registration to enable trustees to provide services for all capital market products instead of the current product-based registration,” it noted.
SC said this framework is consistent with its efforts in realigning its regulatory approach from product-focused to intermediary/activity-focused. 
“This framework will focus on conduct regulation to ensure that trustees and custodians prioritise investors in all of their decision-making process.
“In addition, it will place greater emphasis on board and management responsibilities by holding them accountable for the conduct of the registered entity and their representatives,” it noted.
SC also stressed that it will enhance the supervision of trustees and custodians to ensure that these registered entities continue to remain fit and proper when carrying out their obligations and responsibilities in protecting investors’ rights and assets.
The consultation paper in relation to the proposed regulatory framework is available on SC website: www.sc.com.my and open for comments until Nov 12.