01 March 2011

FIMM is a Self-Regulating Organization now. What does it mean?

During a speech at The Edge-Lipper Awards 2011 yesterday, Chairman of Securities Commission (SC) Malaysia highlighted that Federation of Investment Managers Malaysia (FIMM) as a Self-Regulatory Organization (SRO).

"I am pleased to note that the Minister of Finance approved the SC's recommendation to recognize FIMM as an SRO, through a notice that was gazetted on 20 January 2011. I have full confidence that FIMM will be able to discharge its role as an SRO effectively in self-regulating its members for the benefit of the industry as well as investors" said SC's chairman.
Tan Sri Zarinah Anwar, Chairman of Securities Commission Malaysia


What is the role of SRO?
Through SROs, industry players can expand beyond the confines of their own interests and align their interests with that of the public. This will result in the values of ethical behavior and integrity being ingrained into corporate and market cultures.

According to Investopedia, SRO meaning that a non-governmental organization that has the power to create enforce industry regulations and standards. The priority is to protect investors through the establishment of rules that promote ethics and equality.


What does it meant for FIMM?
As an SRO, FIMM is expected to regulate its members, including through self enforcement, and also develop rules that are designed to set standards of behavior for its members while promoting investor protection.

FIMM's immediate tasks is to enhance professionalism of sales agents and distributors and to formulate a robust sales practices regime with adequate supervision and monitoring by FIMM in order to:
  • Enhance investor confidence
  • Enhance investor protection
  • Ensure that investors are not misled into investing in products that are not suitable to them

Some of the possible changes in Unit Trust industry soon...
  1. More innovative products, such as zero-upfront funds
  2. More stringent rules to eliminate unprofessional unit trust consultants (UTC)
  3. UTC must fulfill the minimum Continuing Professional Education (CPE) training hours set
  4. More stringent licensing issues to deter unqualified UTCs
  5. Easier and faster way of sales and redemption processing, etc online transactions
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