KUALA LUMPUR: The Securities Commission Malaysia (SC) has reminded fund management and unit trust management companies of their obligations to act in the best interest of investors at all times.
SC said this would ensure fair treatment of their clients amid the unprecedented and volatile market conditions arising from the Covid-19 pandemic.
In a circular issued today, SC emphasised that good governance, proper conduct and continuous compliance to capital market regulations are imperative to the functioning of capital market intermediaries.
It added this applies especially to investment management professionals licensed by the SC, who are responsible for the management of investors’ monies.
“Under current market conditions, the SC, as the capital market regulator, must and will ensure that the markets operate in a fair and orderly manner, and that investor protection is upheld,” said SC chairman Datuk Syed Zaid Albar.
SC said capital market intermediaries need to closely monitor the dealing and trading of funds under management, while ensuring clients are informed of the potential risks in funds that they intend to invest in.
SC also highlighted that market participants must properly manage the funds’ liquidity, especially in mitigating potential mismatches between liquidity of the funds’ underlying assets and the redemption terms.
It said timely communications to both the regulator and investors is critical in the current market environment.
As such, SC said capital market intermediaries are required to promptly alert the SC on any material issues or anticipated adverse circumstances relating to the funds under their management.
SC also reminded intermediaries to heighten their cyber risk management protocols due to the increased use of online platforms for transactions and certain operations.
It said robust business continuity measures should be in place to mitigate the impacts of potential disruptions in these times of crisis.
SC said it will continue to closely monitor its intermediaries to ensure that trading and orderly market operations are maintained to facilitate issuers, market participants and investors in managing their risks and opportunities during this period.