Corporate/M&A
Guidelines on Product Governance
The Securities Commission Malaysia (“SC”) had on 24 June 2025 issued the Guidelines on Product Governance (“PG Guidelines”) as well as a set of Frequently Asked Questions (“FAQs”) to provide a better understanding of the PG Guidelines, which will come into effect on 2 January 2026 (the “Effective Date”).
The PG Guidelines applies to a product issuer1 and a product distributor2 that issues or distributes unlisted capital market products3 except the following:
(i) Ordinary shares;
(ii) Over-the-counter derivatives contracts that are customised specifically for an investor;
(iii) Venture capital or private equity funds; and
(iv) Products hosted or funds raised on the platform of a recognized market operator or initial exchange offering operator that is registered by the SC.
The PG Guidelinesseeks to strengthen investor protection and to encourage responsible product development and distribution in the capital market.
The product governance framework embodies controls, policies and procedures (CPPs) that are put in place across the lifecycle of unlisted capital market products. These CPPs, among others, ensure that unlisted capital market products are designed and distributed to the identified target market, and perform in the manner the investor has been led to expect.
