Finfluencers, or financial influencers in Malaysia, will soon have to follow new guidelines if they want to continue to create and share content, including that of financial insights and product recommendations.

The Guidance Note on the Provision of Investment Advice, released by the Securities Commission Malaysia, is meant to address the growing popularity of finfluencers.

In particular, under the updated rules, the commission says that Malaysian finfluencers may need to seek out a licence if they wish to promote certain capital market products on social media platforms.

“For example, the sharing of financial insights or recommendations,” the regulator points out, “that promote certain capital market products to followers with expectation of commissions or other rewards will require a licence.” 

Under the new guidance note, the commission states that finfluencers who carry on a business of advising others concerning securities or derivatives, as well as those who are part of a business that issues analysis or reports concerning the same, should obtain a licence from the regulator.

In addition, those who offer pay-for-advices arrangements, as well as those who offer a fee-based subscription to a channel or group that offers investment advice, including those on social media, and those who expect benefits or gratuities, directly or indirectly, in exchange for investment advice, are also required to apply for licences.

The regulator also warns that failure to obtain said necessary licences will have corresponding fines. Under the new guidance note, the commission shares offenders can be fined up to 10 million ringgit  (US$2.17 million) or be jailed for up to 10 years, if convicted.

In addition to outlining the fines and prison sentence for violators, the commission also advises finfluencers to constantly verify that the companies they are promoting are duly licensed or approved by using the commission’s investment checker web tool.