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3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role

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FIMM Combined Examination FCE

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1 Introduction: The FIMM Combined Examination (FCE)

0.1 FCE Exam Facts, Registration Rules and How to Use This Guide

2 Chapter 1: Understanding Collective Investment Schemes in Malaysia

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified 1.2 Investment-Linked Funds Are Not UTS; Industry Growth and History 1.3 Participants in the CIS Ecosystem: Unit Holders, Managers, Trustees, Distributors and Regulators

3 Chapter 2: Introduction to UTS and PRS

2.1 UTS and PRS as Investments: Mechanics, Unit Calculations and How They Compare 2.2 Types of Funds: By Asset Class, Fund Structure and Investment Objective 2.3 Methods of Investing and Dollar Cost Averaging 2.4 Benefits and Disadvantages of Investing in UTS and PRS 2.5 Understanding Risk and the Risks of Investing in Schemes 2.6 Shariah-Compliant Schemes, Their Risks and the Role of the Shariah Advisory Council

4 Chapter 3: Regulatory Framework

3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role 3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS 3.3 Regulation of Scheme Providers and Oversight Functions 3.4 The Deed, the Prospectus or Disclosure Document, and the Product Highlights Sheet 3.5 Portfolio Constraints: Permitted Investments, Liquidity, Borrowing and Exposure Limits 3.6 Regulations for Other CIS: Real Estate Investment Trusts and Exchange-Traded Funds 3.7 Regulation and Duties of the Scheme Trustee 3.8 Regulation of Marketing and Distribution: Distributor Categories, Collection Points and Agency Structure 3.9 Registration of Consultants: Eligibility, Fit and Proper, Duration, Variation and Revocation

5 Chapter 4 (Part 1): Marketing and Distribution — Disclosure and Transactions

4.1 Servicing Investors and the Contents of the Prospectus and Disclosure Document 4.2 The Product Highlights Sheet, Advertising Standards and Account Maintenance 4.3 The Purchase Process and Suitability Assessment Before Personal Advice 4.4 Cooling-Off Rights, Repurchase of Units, Suspension and Switching 4.5 Financing the Purchase of UTS: Process, Safeguards and the Risk Disclosure Statement 4.6 EPF Transfers and Withdrawals for Investment in Approved Unit Trust Funds

6 Chapter 4 (Part 2): Marketing and Distribution — Distributions, Reporting and Service

4.7 Distributable Income, Distributions and NAV, "Buying" a Distribution and Taxation 4.8 Reporting to Investors: Confirmations, Statements, and Semi-Annual and Annual Reports 4.9 Marketing Principles, Delivering Quality Service and Handling Complaints 4.10 The Effect of Inflation, Taxation and Investment Costs on Returns 4.11 Investment Alternatives to UTS and PRS

7 Chapter 5: Code of Ethics

5.1 Compliance, Ethics and the Structure of the FIMM Code of Ethics 5.2 Core Principle 1: Honesty and Integrity 5.3 Core Principle 2: Professionalism 5.4 Core Principles 3 to 5 and Non-Compliance: Conflicts, Disclosure, Confidentiality and Misconduct

8 Chapter 6: Personal Financial Planning

6.1 Personal Financial Planning: Definition, Features, Five Areas and the Six Steps 6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant 6.3 The Consultant's Role in Investment Planning and Advising Clients Through the Life Cycle

9 Chapter 7A: Features and Operations of UTS

7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed 7A.2 UTS Fees, Charges and Expenses, and the Management Expense Ratio 7A.3 Dealing in Units, Valuation, NAV Calculation and Unit Prices 7A.4 Forward and Historical Pricing, and the UTMC's Holding of Units 7A.5 Unit Splits, Distributions and Their Effect on NAV 7A.6 Measuring UTS Performance: Returns, Performance Tables, Risk Measures and Qualitative Factors 7A.7 Operational Aspects of Shariah-Compliant UTS and PRS and the Shariah Contracts Between the Parties 7A.8 Borrowing to Invest in UTS and the Risks of Loan Financing

10 Chapter 7B (Part 1): The Pension Landscape and the PRS Framework

7B.1 The Malaysian Pension Landscape and the Adequacy of Retirement Savings 7B.2 The World Bank's Five-Pillar Pension Framework in the Malaysian Context 7B.3 Key Players: EPF, KWAP, LTAT, Employer-Sponsored Schemes and Annuities 7B.4 Why Malaysia Needs PRS: Ageing, Longevity Risk and the Benefits of PRS 7B.5 The PRS Framework and the Private Pension Administrator (PPA) 7B.6 PRS Structure, the Trust and Deed, Advantages over Other Products, Eligibility and Contributions

11 Chapter 7B (Part 2): PRS Operations

7B.7 The PRS Default Option and Tax Incentives for Members and Employers 7B.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting 7B.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death 7B.10 Switching Between Funds and Transferring Between PRS Providers (Portability) 7B.11 Unclaimed Monies, Death of a Member and PRS Nomination 7B.12 PRS Funds: Number, Core and Non-Core Funds, Objectives, Risk Profiles, Asset Classes, Authorisation and Naming 7B.13 PRS Fees, Charges and Expenses 7B.14 PRS Unit Creation, Forward Pricing, Valuation, Distributions, Performance Measurement and Electronic Communication

3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role

Key Takeaways Explain This Topic AI

Regulation of the UTS and PRS industry is laid out in the Securities Commission Act 1993 (SCA) and the Capital Markets and Services Act 2007 (CMSA).

The SC's powers cover Management Companies, schemes, Distributors and Consultants, Scheme Trustees, Employer Trustees and the PRS Administrator.

Bank Negara Malaysia's rules apply to the insurance component when a UTMC bundles insurance with a UTS, and to the overseas investment activities of schemes through its foreign exchange policy.

A listed UTS must meet Bursa Malaysia's Listing Requirements in addition to the SC's requirements.

FIMM serves a dual role as a self-regulatory organisation and as the industry representative, and it is the body approved by the SC to conduct UTS and PRS examinations and register Consultants.

Last updated: October 2026

Why Regulation Matters

Without investor confidence in the capital market and its participants there is little investment and the economy cannot grow as expected. The study guide lists four major elements of financial regulation:

  • protection of investors' interests ;
  • proper disclosure to investors;
  • control over market participants , including restrictions on who may enter the industry; and

prevention of improper market practices .

Regulation also supports development by setting out the rights, duties and responsibilities of participants.

The Securities Commission Malaysia (SC)

The SC, established on 1 March 1993, is Malaysia's capital market regulator. For UTS and PRS:

Regulation is laid out in the Securities Commission Act 1993 (SCA) and the Capital Markets and Services Act 2007 (CMSA) .

The aim is a properly functioning industry that promotes capital market stability and protects unit holders, PRS members and beneficiaries through prudential and investor-protection requirements.

The SCA and CMSA let the SC issue guidelines, including the Guidelines on Unit Trust Funds (UTF Guidelines) and the Guidelines on Private Retirement Schemes (PRS Guidelines) .

The SC's powers cover Management Companies, schemes, Distributors and Consultants, Scheme Trustees, Employer Trustees and the PRS Administrator , and it can take enforcement action for any breach of securities laws, regulations or guidelines.

Scope of the SC's regulatory functions

  • Function Example
  • Registering authority for prospectuses Of corporations other than unlisted recreational clubs
  • Approving authority Corporate bond issues
  • Regulating securities and futures All matters relating to securities and futures contracts
  • Take-overs and mergers Regulating take-overs and mergers of companies
  • Fund management All matters relating to fund management, including UTS and PRS
  • Licensing Licensing and supervising all licensed persons
  • Market institutions Supervising exchanges, clearing houses and central depositories
  • Self-regulation Encouraging self-regulation
  • Conduct Ensuring proper conduct of market institutions and licensed persons

The SC's mission is "to promote and maintain fair, efficient, secure and transparent securities and derivatives markets; and facilitate the orderly development of an innovative and competitive capital market". Its areas of responsibility include developing the capital market and its segments (including the Islamic capital market and fund management), facilitating innovation and digital services, sustainable finance, supervising conduct, championing corporate governance, and cross-border cooperation. It also runs investor-education initiatives.

The SC's mandate for PRS

The Government entrusted the SC with developing PRS as part of the private pension landscape in order to:

  • provide a well-regulated and supervised PRS industry;
  • give members choice and flexibility in saving for retirement;
  • build trust and confidence in PRS;
  • facilitate a cost-effective private pension framework; and

safeguard members' interests through prudent operational guidelines.

Other Regulators

Regulator Relevance to UTS and PRS

Companies Commission of Malaysia (CCM) Incorporates companies, registers businesses and enforces corporate law. Distributors and Scheme Trustees, as companies, must meet the Companies Act and CCM rules.

Bank Negara Malaysia (BNM) Governed by the Central Bank of Malaysia Act 2009; promotes monetary and financial stability. Oversees the clearing, settlement and payment systems the industry uses; regulates insurers, so its rules apply to the insurance component if a UTMC bundles insurance with a UTS; and its foreign exchange rules apply to schemes' overseas investments.

Bursa Malaysia The exchange. A listed UTS must meet Bursa's Listing Requirements in addition to SC rules.

FIMM: Self-Regulator and Industry Voice

The Federation of Investment Managers Malaysia (FIMM) has a dual role :

Role What FIMM does

Self-regulatory organisation (SRO) Formulates rules, guidelines and standards for Distributors and Consultants; upholds Consultants' professional standards; takes disciplinary action

Examination and registration body Approved by the SC to conduct the UTS and PRS examinations and to register successful candidates as Consultants

Industry representative Advocates the orderly growth of the industry, represents it on issues affecting it and works with the SC on development projects

FIMM's SRO work focuses on marketing and distribution : it promotes best practice and professionalism among Distributors and Consultants so that investors are protected and public confidence is maintained.

Who Approves What (a Favourite Exam Item)

FIMM's practice question asks which parties require SC approval . The answer is Scheme Providers, schemes and Trustees . Consultants are registered with FIMM , not approved by the SC.

  • Party Gatekeeper
  • Scheme Provider (UTMC / PRS Provider) SC approval plus a Capital Markets Services Licence (CMSL)

Scheme (UTS fund, PRS and its funds) SC authorisation; deed and prospectus/disclosure document registered with the SC

  • Scheme Trustee Registration with the SC
  • UTS / PRS Consultant Registration with FIMM after passing the FCE
  • PRS Administrator Approved by the SC (the Private Pension Administrator)