Securities Commission

THE Securities Commission Malaysia (SC) has issued new Guidelines on Product Governance (PGG), aimed at enhancing investor protection and promoting responsible product development and distribution in the capital market.

In a statement, the SC said the guidelines form part of its broader market and regulatory reforms to strengthen industry conduct and market integrity.

Among key measures, the PGG requires product issuers and distributors to prioritise investors’ interests in designing and distributing unlisted capital market products.

Firms must adopt controls, policies and procedures (CPPs) that improve product suitability for the intended target market and proactively mitigate potential investor harm.

The guidelines also place heightened responsibility on boards and management, who will be held accountable for product design and distribution decisions.

The SC further requires stronger collaboration between product issuers and distributors, with ongoing information-sharing to ensure that products continue to meet the needs of their intended target markets.

SC chairman Datuk Mohammad Faiz Azmi said the PGG supports responsible product innovation while ensuring investor interests remain central.

“The PGG adopts a principle-based approach, allowing firms to implement their product governance framework that best suits their business model while still achieving its desired regulatory outcomes,” he said.

By strengthening product governance frameworks, firms can also demonstrate commitment to ethical and responsible business practices, which is critical in building trust with investors and regulators, he added.

The PGG will apply to unlisted capital market products, with certain exceptions including ordinary shares, over-the-counter derivatives, venture capital or private equity funds, and products offered on platforms operated by recognised market operators.

The new guidelines will come into effect on Jan 2, 2026, allowing industry participants sufficient time to prepare for compliance.

The SC encourages firms to submit any queries regarding the guidelines via email to [email protected]. — TMR

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