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• whether or not you are licensed by the SC for providing investment advice; and
• any interest that you may have in the securities or derivatives that you discuss about.
However, the making of such disclosure in itself, does not absolve you from the responsibility
to assess your own circumstances before conducting the activity, as to whether you are
required to hold a license under the CMSA, or if you are licensed, whether or not such activity
is permitted within the scope of your license.
3.5 Other than conducting a regulated activity without holding a valid license, what
are examples of offences that an unlicensed person can be held liable for under
the securities laws?
Provisions under the securities laws which will apply to any person including an unlicensed
person include:
• No person shall engage in any transaction which has or likely to have the effect of
raising, lowering, or maintaining the price of securities or derivatives, for the purpose
which may include inducing others to buy or sell the securities or derivatives;
• A person shall not make false or misleading statements that is likely to induce
another person to buy or sell the securities or derivatives or is likely to have the
effects of raising, lowering or maintaining the price of securities or derivatives;
• A person shall not recklessly make any statement, promise or forecast that is
misleading, false or deceptive to induce or attempt to induce another person to deal
in securities or derivatives.
A person who contravenes any of the abovementioned provisions commits an offence under
the securities laws and can be punished with imprisonment for maximum 10 years and to a
minimum fine of RM 1 million.
3.6 I am licensed to provide investment advice, what standard of conduct should I
observe as part of my fit and proper requirement?
As a person licensed under the CMSA, you are required to adhere to certain standards in
carrying out regulated activity so as not to cast doubt on your competency, sound
judgement, and integrity.
For example, you should not make any false or misleading representation that is likely to
induce a person to invest in securities or derivatives. Such representations may include
stating that an investment is capital guaranteed when it is not, or promising an investment
that will give high return with minimum risk of loss to the investor.
If these standards are not adhered to, it can affect your overall fitness and propriety as a
licensed person and result in sanction being imposed against you.