Malaysia Securities Commission introduces product governance guidelines for unlisted capital market products

The Malaysia Securities Commission has introduced Guidelines on Product Governance to strengthen investor protection and promote responsible development and distribution of capital market products. The framework sets product governance expectations for product issuers and distributors involved in unlisted capital market products. The guidelines require firms to prioritise investors’ interests in product design and distribution and to embed this in their controls, policies and procedures. Firms must also implement measures to improve product suitability for the intended target market, proactively identify and prevent potential investor harm, and ensure boards and senior management are accountable for product design and distribution. The requirements include closer collaboration between issuers and distributors, including information-sharing on target market appropriateness to help ensure products continue to serve their intended purpose. The guidelines adopt a principle-based approach and apply to unlisted capital market products except ordinary shares, over-the-counter derivatives contracts, venture capital or private equity funds, and products offered on platforms operated by a recognised market operator. The guidelines take effect on 2 January 2026, providing a transition period for firms to prepare for compliance.