Malaysia looks to crack down on financial scams
The Securities Commission Malaysia (SC) is stepping up its efforts to combat financial scams by stepping up its cross border collaborations following a staggering 321% increase in reported incidences over the past five years.
Executive chairman Awang Adek Hussin said the Asia-Pacific Regional Cooperation (APRC), a part of the International Organization of Securities Commissions (IOSCO) regional committee, shared concern over the rising tide of financial scams.
Speaking at the SC 2023 annual report press conference, he said at the most recent meeting of the committee in Hong Kong delegates were “very, very concerned about scams”. He said: “We thought that a project should be carried out to have greater sharing of information at APRC level. That is being done. We do a lot in terms of cooperation.” He added that that cooperation extended to restitution as well.
According to its Annual Report 2023, the SC received 3,262 complaints and enquiries about scams and unlicensed activities last year, representing an increase of 321% over a five-year period (2019-2023). The SC received 774 complaints and enquiries on such activities in 2019.
In 2023, the SC imposed RM19 million (£3.1m) in fines during its enforcement actions. In addition to the scams, the SC said there were also increasing concerns about the conduct of unlisted public firms and entities offering Cash Trust products.
Hussin said that the SC has also signed a Memorandum of Understanding (MoU) among the member countries of IOSCO for co-operation and exchange of information and assistance when requested.
However, he added there are no joint raids or any involvement from other regulators in Malaysia. “If we want to question somebody in other jurisdictions, we can send our team to take a statement. That can be done with assistance from our peer regulator,” he explained.
He added that in most of these scams, the perpetrators used fake websites, social media pages and mule bank accounts to promote and carry out their illegal activities.
In many of these cases, the scammers had falsely lent credence and legitimacy to their illegal activity by misusing the name of agencies such as the SC, Bank Negara Malaysia, the Companies Commission of Malaysia, licensed intermediaries and images of local celebrities and religious leaders.
The report said that in 2023 the use of social media platforms, particularly Facebook and Telegram, continued to be the primary vehicles for perpetrators to carry out their illegal activities.
The regulator noted that the mode of payment adopted by these investment scams had also changed to e-wallet and cryptocurrency from mule bank accounts used previously.
While some of the unlicensed activities are carried out locally by Malaysians, there were also foreign entities conducting unlicensed activities in Malaysia, the SC added.
It said these foreign entities may be properly licensed or regulated by foreign regulators. However, they would still be breaching Malaysian laws if they carry out their activities in Malaysia, solicit Malaysian clients or have a local presence in Malaysia without the requisite license or registration from the SC.
As of December 31 2023, 569 URLs () have been detected for potential breaches by offering unlicensed activities to Malaysians. In 2022 that figure was 382 URLs.
Of these, 51% were from Telegram, 27% were from Facebook, 9% from Instagram and 13% from other sources such as websites, YouTube and TikTok, among others.
Malaysian businesses set to benefit from new HSBC fund
HSBC has launched a $1 billion ASEAN Growth Fund in Southeast Asia, where it said the digital economy is among the world’s fastest-growing. In 2023 it was worth $218 billion in 2023, and expected to reach £600 billion by the end of this decade.
“Like so many other internationally minded businesses, we are excited about ASEAN’s booming digital economy,” said Omar Siddiq, Chief Executive Officer, HSBC Malaysia. “With a working population that is digitally native, increasing in size, and poised to consume more goods and services – especially on e-commerce – ASEAN has so much potential for growth. We are delighted to work with digital companies as they expand in the region and beyond.”
The fund will provide lending to companies that are scaling up through digital platforms across Southeast Asia and will support new businesses, more established corporates and non-bank financial institutions.
The six highest growth countries in ASEAN are: Indonesia, Malaysia, The Philippines, Singapore, Thailand and Vietnam. The bank has a presence in all six countries.
