Licensing under the CMSA and the Licensing Handbook

Licensing questions test whether you can apply Part III of the Capital Markets and Services Act 2007 and the SC's Licensing Handbook to a person's situation: does this activity need a licence, does this applicant qualify, are these exam passes still valid, what happens when a licence is revoked, and what can a dealer's representative or trading representative do. Expect dates to compare, ratios to apply and fit and proper grounds to sort. The Guidance Note on Provision of Investment Advice adds social-media and seminar scenarios. Note the Handbook was revised on 30 September 2026 (R19); the changes affect Chapter 7A only.

8 min read6 sections

Capital Markets and Services Act 2007 (Act 671), consolidated text incorporating A1499/2015 and P.U.(A) 473/2025 (sc.com.my); SC Licensing Handbook SC-GL/LH-2007 (R19-2026, 30 September 2026), cross-checked against R17-2024 for the paragraphs used; SC Guidance Note on Provision of Investment Advice SC-GN/1-2020 (R2-2024). Checked as at 12 October 2026. Independent prep, not endorsed by SIDC or the SC.

Must-know for the exam

Carrying on a business in a regulated activity without a CMSL or registered-person status: fine up to RM10 million or 10 years, or both (CMSA s.58).
Acting as a representative without a CMSRL: fine up to RM5 million or up to 5 years' imprisonment, or both (CMSA s.59).
Schedule 2 lists eight regulated activities, including dealing in securities, investment advice, financial planning and clearing for securities or derivatives.
CMSLs and CMSRLs are valid in perpetuity, but holders keep anniversary obligations such as CPE and fees (Licensing Handbook para 2.01(3)).
Dealing in securities CMSRL: pass SCLE Modules 6+7, 6+18, 7+17 or 17+18; CFA charterholders are exempt from Module 7 (Table 3).
SCLE results are valid for two years from each module's pass date; former licensees may reapply for the same activity within three years of leaving (para 4.05(6)-(7)).
CMSRL applicants must be at least 21 and fit and proper under s.65; holders need 20 CPE points a year, with no carry forward.
A dealer's representative with two years' standing may add investment advice with no further exam, given the principal's prior approval (para 4.05(11)-(12), Table 3a).
Trading representatives: order taking and execution only, one PO, at most 3 per licensed dealer's representative unless the SC allows up to 10 (Chapter 11).
Revocation of a dealing CMSL: appeal to the Minister within 14 days, whose decision is final; other Division 1 decisions: SC review within 14 days (s.80).

On this page · 6 sections

Traps that cost marks

Candidates measure validity from the last module passed; each module has its own two-year clock.
Candidates apply the two-year rule to former licence holders, or start the three-year clock from the exam date.
Candidates think a disclaimer, or not touching client money, keeps paid stock tips outside the licensing net.
Candidates treat every paid seminar as advice, or every post about a fund as harmless; the test is recommendation plus business.
Candidates think the CFA exemption applies only to fund management, or that an exempt module must be replaced.
Candidates assume a dealing licence covers any advisory activity the representative chooses to run on his own account.
Candidates use the varied 1:10 ratio without the SC's approval, or invert the ratio.
Candidates apply the stand-alone investment advice exam route to a dealer's representative adding the activity.

Who needs a licence

Section 58 requires anyone carrying on a business in a regulated activity, as principal or agent, to hold a Capital Markets Services Licence (CMSL) or be a registered person. Section 59 requires an individual acting as a representative to hold a Capital Markets Services Representative's Licence (CMSRL) for that activity. A CMSRL is tied to the principal that supported the application (s.61(3)(c)).

Route	Who	Source
CMSL	Firms carrying on a regulated activity	s.58, Schedule 2
CMSRL	Individuals acting for a CMSL holder	s.59, Handbook para 2.01
Specified persons	E.g. lawyers and accountants whose advice is solely incidental; group-only fund managers; newspapers taking no commission	s.58(2), Schedule 3
Registered persons	Banks and other institutions in Schedule 4 (not investment banks), trading representatives, FIMM-registered consultants	s.76, Handbook Chapter 3

Section 59A makes the principal liable for its representative's acts in the course of its licensed business, and the principal cannot contract out of that liability.

Trap: assuming an investment bank is a registered person like a commercial bank. It is not; it holds a CMSL (Handbook para 3.02(3)).

Takeaway: Business in a Schedule 2 activity needs a CMSL; acting for a CMSL holder needs a CMSRL; exemptions are listed and narrow.

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Licensing under the CMSA and the Licensing Handbook

8 min read6 sections

Must-know for the exam

Carrying on a business in a regulated activity without a CMSL or registered-person status: fine up to RM10 million or 10 years, or both (CMSA s.58).
Acting as a representative without a CMSRL: fine up to RM5 million or up to 5 years' imprisonment, or both (CMSA s.59).
Schedule 2 lists eight regulated activities, including dealing in securities, investment advice, financial planning and clearing for securities or derivatives.
CMSLs and CMSRLs are valid in perpetuity, but holders keep anniversary obligations such as CPE and fees (Licensing Handbook para 2.01(3)).
Dealing in securities CMSRL: pass SCLE Modules 6+7, 6+18, 7+17 or 17+18; CFA charterholders are exempt from Module 7 (Table 3).
SCLE results are valid for two years from each module's pass date; former licensees may reapply for the same activity within three years of leaving (para 4.05(6)-(7)).
CMSRL applicants must be at least 21 and fit and proper under s.65; holders need 20 CPE points a year, with no carry forward.
A dealer's representative with two years' standing may add investment advice with no further exam, given the principal's prior approval (para 4.05(11)-(12), Table 3a).
Trading representatives: order taking and execution only, one PO, at most 3 per licensed dealer's representative unless the SC allows up to 10 (Chapter 11).
Revocation of a dealing CMSL: appeal to the Minister within 14 days, whose decision is final; other Division 1 decisions: SC review within 14 days (s.80).

On this page · 6 sections

Traps that cost marks

Candidates measure validity from the last module passed; each module has its own two-year clock.
Candidates apply the two-year rule to former licence holders, or start the three-year clock from the exam date.
Candidates think a disclaimer, or not touching client money, keeps paid stock tips outside the licensing net.
Candidates treat every paid seminar as advice, or every post about a fund as harmless; the test is recommendation plus business.
Candidates think the CFA exemption applies only to fund management, or that an exempt module must be replaced.
Candidates assume a dealing licence covers any advisory activity the representative chooses to run on his own account.
Candidates use the varied 1:10 ratio without the SC's approval, or invert the ratio.
Candidates apply the stand-alone investment advice exam route to a dealer's representative adding the activity.

Who needs a licence

Route	Who	Source
CMSL	Firms carrying on a regulated activity	s.58, Schedule 2
CMSRL	Individuals acting for a CMSL holder	s.59, Handbook para 2.01
Specified persons	E.g. lawyers and accountants whose advice is solely incidental; group-only fund managers; newspapers taking no commission	s.58(2), Schedule 3
Registered persons	Banks and other institutions in Schedule 4 (not investment banks), trading representatives, FIMM-registered consultants	s.76, Handbook Chapter 3

Section 59A makes the principal liable for its representative's acts in the course of its licensed business, and the principal cannot contract out of that liability.

Trap: assuming an investment bank is a registered person like a commercial bank. It is not; it holds a CMSL (Handbook para 3.02(3)).

Takeaway: Business in a Schedule 2 activity needs a CMSL; acting for a CMSL holder needs a CMSRL; exemptions are listed and narrow.

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4 more sections of this note are part of Premium.

Every section of every study note
Every question in every live SIDC module
Full timed mock exams
A worked explanation on every question
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Getting a CMSRL: age, fit and proper, examinations

Paragraph 4.05 of the Licensing Handbook sets the requirements: at least 21 years old, fit and proper with none of the s.65(1) grounds applying (bankruptcy, unsatisfied judgment debts, convictions for fraud, dishonesty or violence, securities-law convictions, and so on), the qualifications in Table 2 and the SCLE modules in Table 3.

Activity	SCLE modules (Table 3)
Dealing in securities	6+7, 6+18, 7+17 or 17+18 (CFA: exempt from 7)
Dealing in derivatives	14+16, 17+18, 14+17 or 16+18
Fund management (portfolio)	9+10 (CFA: exempt from 10)
Investment advice	12+19 or 12+19A (CFA: exempt from 12)
Financial planning; asset management	No SCLE module required

Results are valid for two years from the date each module is passed (para 4.05(6)). Paragraph 4.05(7) disapplies that rule if you passed while working for a CMSL holder and stay in the industry, or leave and return within three years, or were licensed before and reapply for the same activity within three years of leaving. Distinguished service (20 years' work, 10 in the relevant capital market area, senior management) can support an exemption application (para 4.05(8)).

Trap: measuring validity from the last module passed. Each module has its own two-year clock.

Takeaway: Two years per module; three years after leaving the industry for returning licensees; 21 and fit and proper always.