Securities Commission Issues New Guidance Note Aimed At "Finfluencers"

Pang Tun Yau

19th July 2024 - 2 min read

The Securities Commission Malaysia (SC) has issued updated guidelines for financial influencers, commonly known as “finfluencers,” who promote capital market products and services on social media. This move is aimed at increasing public awareness and ensuring that finfluencers adhere to regulatory standards.

The revised Guidance Note on the Provision of Investment Advice outlines the SC’s expectations for finfluencers sharing financial insights and recommendations online. The SC emphasizes that providing investment advice is a regulated activity under securities laws, and finfluencers must comply with these regulations to maintain market integrity.

A key aspect of the update is the clarification that promoting capital market products on social media will require a license from the SC. The Guidance Note provides a few scenarios to highlight what activities may be deemed as investment advice. It also explains that finfluencers who share financial insights or recommendations that promote specific capital market products with the expectation of commissions or other rewards, they must obtain a license. This aims to ensure that such activities are conducted legally and transparently.

The Guidance Note also explicitly stated that a disclaimer that the contents do not constitute as investment advice – a common occurrence in finfluencer content – does not relieve them from the requirement of holding a license.

Engaging in unlicensed regulated activities is a serious offence under the Capital Markets and Services Act 2007 (CMSA). Violators can face fines up to RM10 million, imprisonment for up to ten years, or both.

To assist finfluencers in complying with the CMSA, the SC has released an infographic which includes frequently asked questions and a checklist. Additionally, finfluencers are encouraged to verify the licensing status of the companies they promote using the SC’s Investment Checker, and ensure that any promotional content adheres to the Guidelines for Advertising for Capital Market Products and Related Services.