The Securities Commission Malaysia (SC) issued guidelines for investors to verify the licensing status of investing and trading platforms before making an investment. The commission warned the public against unlicensed investment advisers.
According to the official press release, the SC issues a guidance note in response to the rising number of complaints against illegal investment advisors. The unlicensed companies are charging investors with heavy fees for investment recommendations.
The SC also mentioned the risks associated with such activities as investment advisers can defraud investors or force them to be a part of a market manipulation scheme. The regulator urged investors to verify the regulatory status of investment platforms and individuals offering financial markets services, before making an investment decision.
“The guidance note is issued in response to the increasing number of queries and complaints received regarding various social media, chat rooms and messaging applications that appear to be providing specific stock recommendations and/or investment advice to members of the public, who are given access to these recommendations and/or advice upon payment of a fee. The SC cautions members of the public against dealing with unlicensed investment advisers as they could be defrauded or used as part of a market manipulation scheme,” the SC mentioned in the official press release.
The regulatory authority warned illegal advisers about possible consequences and mentioned that the stated activities are punishable with a fine and imprisonment.
“Any person carrying on a business of giving investment advice without a license commits an offence under the CMSA which is punishable with a fine not exceeding RM10 million or imprisonment not exceeding ten years or both if found guilty,” the SC stated.
The SC has updated its investor alert list recently and added Tiger Brokers and Ali Exchange. The commission regularly updates investor lists to protect the public against unlicensed individuals and companies involved in the trading of securities and FX products.