The Securities Commission Malaysia (SC) issued a Practice Note on May 22, 2026, clarifying that trust companies conducting investment activities beyond incidental involvement must obtain a capital markets services licence (CMSL) to operate legally. The new requirements came into effect the following day, May 23, 2026, and apply to firms whose primary business focuses on investing in capital market products or actively promoting projected returns [1, 2].
Conventional trust businesses remain distinguished under the practice note. These firms, primarily focused on estate administration or private trust services related to succession or legacy planning, may continue to provide investment-related services without a CMSL if such activities are solely incidental to their main business. This means limited or ancillary investment actions do not trigger licensing obligations [1, 2].
Trust companies investing in non-capital market products — such as fixed deposits, real estate, investment-linked insurance policies, or gold — fall outside the SC's regulatory scope. Such companies are not subject to licensing under this framework [1, 2].
The licensing framework is anchored in legislative amendments to Paragraph 1 of Schedule 3 of the Capital Markets and Services Act 2007, which took effect on January 1, 2026. These amendments expanded the SC’s powers to issue licensing requirements specifically for trust companies involved in investment-related activities [1, 2].
The SC advised, "In light of the above, all trust companies are encouraged to engage the SC as to whether their trust business will require a licence from the SC," urging firms to confirm their regulatory status under the updated rules [1, 2].
