Securities Commission Malaysia liberalises regulation on private retirement schemes to enhance competitiveness of the industry

29 April 2020

On 21 February 2020, the Securities Commission Malaysia (“SC”) issued the revised Guidelines on Private Retirement Scheme (“Revised Guidelines”). The Revised Guidelines seek to liberalise the regulation on private retirement schemes (“PRS”) to enhance competitiveness of the industry.

The key amendments introduced by the Revised Guidelines include:

  • Allowing conservative funds to invest in foreign markets.
  • Allowing PRS funds to invest in exchange traded funds based on physical gold.
  • “Pre-retirement withdrawal” can now be made for housing and healthcare purposes without incurring a tax penalty.
  • Introducing a new age limit for each category of core funds and for the switching exercise for core funds in the default option.
  • Requiring a switching exercise under paragraph 11.13 of the Revised Guidelines to be carried out in equal proportions over a five‐year period based on the number of units remaining in the relevant fund. The Revised Guidelines came into effect on 21 February 2020. PRS providers are given a one-year transitional period from the effective date, i.e. until 1 March 2021, to fully comply with the revised requirements.

Reference materials 

The following materials are available on the SC website www.sc.com.my or by clicking on the following links:

 

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