Application for Registration as a Recognized Market Operator

APPENDIX 1
General Instructions
APPLICATION FOR REGISTRATION AS A RECOGNIZED MARKET OPERATOR This Application for Registration as a Recognized Market Operator consists of two parts:
Form 1 (About the Applicant): This is the general information about the Applicant; and Form 2 (About the Recognized Market): Kindly complete the specific form which is relevant to the recognized market you wish to operate. All questions must be answered. If a question is not applicable, please mark “N.A” in the space provided. Should there be insufficient space for your answers, please use separate sheets of paper and clearly mark each separate sheet of paper with the relevant section number. Please tick (√) in the relevant boxes where appropriate. If there are any changes in the information furnished in the application prior to the approval of the registration, the Applicant should notify the Securities Commission Malaysia (SC) immediately. This application must be signed by at least two directors/partners of the Applicant, and must be accompanied by the relevant documents required to complete the application. This application together with the annexures must be submitted to the SC in both physical and electronic form. The electronic copy to be submitted to rmo@seccom.com.my and the physical copy to be submitted to the address set out in paragraph 14.01 of the Guidelines. This application must be accompanied with an application fee of RM5000 as prescribed under Capital Markets and Services Regulation 2012 upon submission to the SC. The cheque should be made payable to “Securities Commission” or “Suruhanjaya Sekuriti”. Only shortlisted Applicants will be notified. The submission of a complete application does not automatically qualify for registration of a Recognized Market Operator. Form 1: About the Applicant General information about the Applicant
1.1 PROFILE OF APPLICANT (CORPORATION)
A: Corporation details
Name
Country of incorporation
Company registration number
Date of incorporation
Website address
*(Yes / No / Being developed)
B: Contact Detail(s)
Registered address
E-mail address
Contact no
Office:
Mobile:
Fax:
Business address
E-mail address
Contact no
Office:
Mobile:
Fax:
C: Corporation Status
Privately held
Publicly listed
Others
(please specify)
:
D: Share Capital
Class of shares
Authorised (RM)
Issued (RM)
Paid-up (RM)
Ordinary
Preference
Others
(please specify)
Total
E: Others
(Applicable for foreign incorporated Applicant only) At point of application, a foreign incorporated Applicant needs to submit a duly signed undertaking letter by its authorized signatory stating its commitment on the following if it is registered as an recognized market operator by the SC:- (i) a body corporate shall be incorporated in Malaysia having the applicable financial resource requirements as set out in the Guidelines; (ii) a minimum of two (2) key personnel shall be in place within 12 months from the date of registration of the recognized market; and (iii) it will comply with and meet all the requirements of the securities laws and these Guidelines.

Please tick the box to confirm that the document is attached.

Attached
F: Documents Required - Attach certified true copies of the following:
Certificate of incorporation/ registration
Memorandum or articles of association, partnership agreement or any constituent document Most recent annual audited financial statements/ Balance sheet and profit and loss account Annual return / annual declaration by a limited liability partnership Return of allotment of shares form (Form 24/25) Return giving particulars in Register of Directors, Managers and Secretaries, and Changes of Particulars (Form 49)
1.2 CONTROLLERS
A. Shareholders / Partners
Individual
Name
Ordinary
Preference
Others
No.
%
No.
%
No.
%
Individuals who have shareholding or voting rights in the Applicant corporation Corporation Name Ordinary Preference Others No. % No. % No. % Corporation - if 5% or more of the shares in the Applicant are held by one or more corporations, please provide the corporation shareholding structure by filling up and duplicating the table for each corporation B: Contact Details Individual Name Nationality NRIC No./Passport No. Residential address E-mail address Contact no. Office:
Mobile:
Fax:
Corporation
Name
Place of incorporation
Business address
E-mail address
Contact no.
Office:
Mobile:
Fax:
Please provide the details for all shareholders/ partners by filling up and duplicating the table for each direct shareholder/ partner C: Documents Required - Attach copies of the following:
For Individuals: Certified true copy of the National registration identity card (NRIC) for Malaysian citizen or passport details (for non-Malaysian citizen) For Corporation: Certified true copy of the certificate of incorporation/ registration An organisation chart showing the Applicant and its relationship with its related corporation(s) Form 1A: Directors / Compliance officers Director is applicable if the Applicant is a body corporate and compliance officer in the context of a limited liability partnership 1A.1 DIRECTORS / COMPLIANCE OFFICERS A: Personal Details Name Gender Male Female Nationality NRIC No./Passport No. Status Director CEO Others (please specify) :
B: Contact Details
Residential address
E-mail address
Contact no.
Office:
Mobile:
Fax:
C: Declaration by Director/ Compliance Officer of Applicant Within the past 10 years, has such Director/ Compliance Officer, in Malaysia or elsewhere; Been convicted of any offence, or any proceedings pending which may lead to a conviction for such an offence involving fraud or other dishonesty? No Yes (If “Yes”, please specify details) Had a receiver and manager been appointed in respect of any assets /property(ies) of the Applicant? No Yes (If “Yes”, please specify details) Entered into a compromise or arrangement with creditors or members, or a petition presented in a court for its winding up? No Yes (If “Yes”, please specify details) Been subject to any form of disciplinary proceedings or actions by any professional or regulatory body? No Yes (If “Yes”, please specify details) Please provide the details for all directors/ compliance officer by filling up and duplicating the table for each director / compliance officer. D: Documents Required - Attach certified true copies of the following:
National registration identity card (NRIC) for Malaysian citizen or passport details (for non-Malaysian citizen) Form 1B: Responsible Person The Applicant must appoint at least one (1) responsible person who is primarily responsible for the operations and financial management of the recognized market. The Responsible Person will be the main contact person for liaising with the SC and perform any duty as may be directed by the SC 1B.1 RESPONSIBLE PERSON A: Personal Details Name Gender Male Female Nationality NRIC No./Passport No. Status Director CEO/ COO Others (please specify) :
B: Contact Detail(s)
Residential address
E-mail address
Contact no.
Office:
Mobile:
Fax:
C: Declaration by Responsible Person
Within the past 10 years, has the Responsible Person, in Malaysia or elsewhere; Been convicted of any offence, or any proceedings pending which may lead to a conviction for such an offence involving fraud or other dishonesty? No Yes (If “Yes”, please specify details) Had a receiver and manager been appointed in respect of any assets /property(ies) of the Applicant? No Yes (If “Yes”, please specify details) Entered into a compromise or arrangement with creditors or members, or a petition presented in a court for its winding up? No Yes (If “Yes”, please specify details) Been subject to any form of disciplinary proceedings or actions by any professional or regulatory body? No Yes (If “Yes”, please specify details) D: Documents Required - Attach certified true copies of the following:
National registration identity card (NRIC) for Malaysian citizen or passport details (for non-Malaysian citizen) E: True and Correct Information I, the Responsible Person hereby declare that all information provided in Forms 1, 1A, 1B and its annexures (if any) are true and correct. …………………………………………….. Signature Name:
Date:
Form 2: About the Recognized Market (General)
2.1 RECOGNIZED MARKET (GENERAL)
A: Basic information
Name of recognized market
Trading hours
Nature of recognized market
Order routing system
Electronic communication system
Internet portal
Trading platform
Others
(please specify)
:
Describe type of services provided on the recognized market Describe the financial instruments to be traded on the recognized market Describe the prospective categories of participants including:
Manner in which the different category of participants would access the recognized market, and Entry requirements placed on different categories of participants Describe the intended users of the recognized market

Retail clients
Institutional clients
High net worth clients
Licensed brokers/fund houses
Authorised financial institutional
Trustees or custodians
Others
(please specify)
:__________________________________________________ Describe source of remuneration Fixed fees from users Basis of computation of fee:____________________________________ Variable fees from users Basis of computation of fee:____________________________________ Advertisement fees Rebate or commission from intermediaries Others (please specify) :__________________________________________________ B: Transaction Process Flow Describe the end-to-end process flow including receiving and execution of a client order, post trade clearing and settlement and any monies handling arrangements, on the recognized market (to be presented in the form of a diagram as an attachment). Attach a copy of the respective transaction process flows together with this application form. C: Terms and Conditions Imposed on Users Provide terms and conditions(including procedures and other documentation) imposed on users for the use of the recognized market (including a brief description of the disclosure documents, terms of business) that the applicant will give to its users, resolution of trade disputes and circumstances for suspension of facilities). As applicable, related contractual documentation with the intended users to be attached with this application form. D: Controlled functions: Information on Key Personnel Provide information on staffing levels of key controlled functions (including market controls, market surveillance, compliance, member regulation, system integrity), including information of their names, relevant experience and qualifications, etc. Provide on a separate sheet a staff organisational structure chart, clearly indicating senior management/ decision makers/ key officers or employees and their reporting lines. F: Systems and Controls Describe the IT systems used (including off-the shelf/ customized/ outsourced) Describe the security process and procedures Describe the capacity of the system Describe the business continuity plan and procedures, including details of any third party involvement (if applicable, provide the name of the third party that will be involved in managing/operating material aspects of the applicant’s operations on behalf of the applicant. Describe the role and responsibilities of each third party to which the applicant has delegated or outsourced its operations) Describe risk management systems or procedures including procedures relating to internal audit, internal controls, security Describe record keeping and audit trail features and procedures
2.2 REGULATORY STATUS
If the Applicant is operating similar market(s) or conducting a business in any regulated activity in Malaysia or any other jurisdiction, provide relevant information such as:
The name(s) of such market(s) and/or type of regulated activity(ies) The name(s) of such jurisdiction(s) The name(s) of any supervisory authority, including self-regulatory organisation, that exercise oversight over the Applicant or its related corporations in these jurisdictions Evidence of the Applicant’s authorisation to operate a market or conduct a business of a regulated activity in these jurisdictions, including a copy of any conditions imposed on the Applicant’s market operations and conduct of regulated activity in these jurisdiction(s) As applicable, documentation that would allow the SC to consider if the requirements and supervision of the Applicant is subject to are sufficiently equivalent to the requirements and supervision to which under the CMSA, e.g. a summary of the laws, legislation, regulations and rules applicable to the Applicant in these jurisdiction(s) Has the Applicant ever been rejected or refused licence, authorisation or registration to operate similar market(s) or to conduct a business in any regulated activity in any jurisdiction? Yes (If “Yes”, please specify details) No
2.3 OTHER INFORMATION
Is there any other information which the Applicant considers necessary relevant in the assessment of this application? Yes (If “Yes”, please specify details) No
2.4 TRUE AND CORRECT INFORMATION
We hereby declare that all information provided in this Form 2 and its annexures is true and correct. …………………………………………………………… …………………………………………………………… Signature Signature Name (Director/ Partner) :
Name
(Director/ Partner)
:
Date:
Date:
Form 2A: About the Recognized Market (Equity Crowdfunding Platform) Form 2A needs to be completed by an Applicant that wishes to operate an equity crowdfunding platform (ECF platform) 2A.1 RECOGNIZED MARKET (ECF platform) A: Basic information Name of ECF platform Services that will be provided on the ECF market Does the Applicant intend to carry out any other business activities that may or may not be connected to the ECF market Yes (If “Yes”, please specify details) No B. Users (A reference to users includes an issuer or an investor) B1. Investors Individuals Retail Angel Investors Sophisticated Others (please specify) :
Entities
(please specify)
Entry requirements of such user
B2. Issuers
Target sectors
(please specify)
Entry requirements of the different category of users
C. Offering of Islamic capital market products
Does the Applicant intend to offer any Islamic capital market products?
Yes
No
Name of Shariah adviser
D. Due diligence process
Describe the due diligence process that it will be carrying on prospective issuers E. Monies handling arrangements Describe the monies handling arrangements Name of licensed institution Name of trustee F. Business risks What are the main business risks and how does it intend to manage those risks? How many users does the Applicant expect to have? At Go Live Issuer: _____ Investor: _____ 12 months after Go Live Issuer: _____ Investor: _____ Describe the risk management systems or procedures (including procedures relating to internal audit, internal controls and security) G. Transaction process flow Describe the transaction process flow H. Terms and conditions imposed on users Provide terms and conditions imposed on users (including a brief description of the disclosure documents, terms of business, resolution of disputes and circumstances for suspension of platform) (As applicable, related procedures and contractual documentation with the intended users to be attached)
I. Fees and charges
Details of fee structure
(Please specify the different type of fees, such as fixed fee or variable fee) J. Systems and controls Will the IT systems be proprietary/ off-the-shelf/ outsourced? Business continuity and disaster recovery (Please tick the box to confirm that the document is available for SC’s inspection) Full business continuity procedures Any agreements/ terms of reference agreed with any third party providing compliance or other services to the Applicant Any outsourcing arrangements for disaster recovery (Please provide details if any of the boxes above is ticked) Describe record keeping and audit trail features and procedures K. Personnel Demonstrate that it has an effective management structure and clear reporting lines to ensure key controlled functions (including market controls, surveillance, compliance, user regulation, system integrity) (Please include information of names, relevant experience and qualifications, etc of key personnel and staff organisational structure, clearly indicating senior management / decision makers/ key employees and their reporting lines)
L. Compliance arrangements
Compliance procedures
: Briefly describe its compliance procedures which you will ensure that it meets the regulatory requirements Compliance monitoring programme : Describe the actions you will take to ensure that you will comply with your compliance procedures

Financial

crime
: Briefly describe the procedures and steps that you will take to counter the risks of the following:
(i) fraud or dishonesty
(ii) misconduct/misuse of information relating to capital markets (iii) money laundering Market conduct : Briefly describe the controls, procedures and arrangements to counter market abuse M. Business plan Outline the Applicant’s business model and plans with regard to the operation of its business over the next three (3) to five (5) years, including:
why you wish to carry on this business whether you have identified a particular target market any long term strategy and expansion plans where would users be sourced from what experience does your senior management have to carry out such business, including their background and experience of all persons performing significant controlled functions and how this will help them in their role (Please attach copies of any relevant qualifications/ examinations) details of fees payable by users and how they will be charged 2A.2 REGULATORY STATUS If the Applicant is operating similar market(s) or conducting a business in any regulated activity in Malaysia or any other jurisdiction, provide relevant information such as:
The name(s) of such market(s) and/or type of regulated activity(ies) The name(s) of such jurisdiction(s) The name(s) of any supervisory authority, including self-regulatory organisation, that exercise oversight over the Applicant or its related corporations in these jurisdictions Evidence of the Applicant’s authorisation to operate a market or conduct a business of a regulated activity in these jurisdictions, including a copy of any conditions imposed on the Applicant’s market operations and conduct of regulated activity in these jurisdiction(s) As applicable, documentation that would allow the SC to consider if the requirements and supervision of the Applicant is subject to are sufficiently equivalent to the requirements and supervision to which under the CMSA, e.g. a summary of the laws, legislation, regulations and rules applicable to the Applicant in these jurisdiction(s) Has the Applicant ever been rejected or refused licence, authorisation or registration to operate similar market(s) or to conduct a business in any regulated activity in any jurisdiction? Yes (If “Yes”, please specify details) No 2A.3 OTHER INFORMATION Is there any other information which the Applicant considers necessary relevant in the assessment of this application? Yes (If “Yes”, please specify details) No 2A.4 TRUE AND CORRECT INFORMATION We hereby declare that all information provided in this Form 2A and its annexures is true and correct. …………………………………………………………… …………………………………………………………… Signature Signature Name (Director/ Partner) :
Name
(Director/ Partner)
:
Date:
Date:
Form 2B: About the Recognized Market (P2P Platform) Form 2B needs to be completed by an Applicant that wishes to operate a peer-to-peer financing platform (P2P platform) 2B.1 RECOGNIZED MARKET (P2P platform) A: Basic information Name of P2P platform Rate model (e.g. pre-set/ fixed rate) Type of products (investment notes/ Islamic investment notes) offered including direct or pooled, repayment details, range of rate of financing and tenure Name of shariah adviser (if applicable) B. Offering of other business activities Does the Applicant intend to carry out any other business activities that may or may not be connected to the P2P market Yes (If “Yes”, please specify details) No
C. Fees and charges
Details of fee structure
(Please specify the different type of fees)
D. Secondary market
Does the Applicant intend to offer a secondary market?
Yes
(If “Yes”, please specify details)
No
E. Business plan
Outline the Applicant’s business model and plans with regard to the operation of its business over the next three (3) to five (5) years, including:
why and how do you intend to carry out this business any long term strategy and expansion plans including sourcing of your issuers and investors experience of senior management in carrying out such business, including background information value proposition to the overall development of the capital market including your contribution to financial inclusion, sustainable development of any sectors of the economy, synergistic value add to any economic policies and social value proposition F. Users (Reference to users includes issuer and investor) F1. Investors Individuals Retail Sophisticated Others (please specify) :
Entities
(please specify)
Entry requirements
Terms and conditions imposed
(As applicable, related procedures and contractual documentation to be attached) F2. Issuers Legal status of issuers Sole proprietor Partnership Private company Unlisted public company Target sectors (please specify) Entry requirements Terms and conditions (As applicable, related procedures and contractual documentation to be attached) F3. Others Will the Applicant be engaging any *introducer/ referral party? (*Introducer/ referral party means a third party engaged by the P2P operator to refer/introduce an issuer/ investor for a fee) Yes (If “Yes”, please specify details of fee arrangements) No G. Credit assessment and risk scoring Full details of the procedures and methodology to carry out credit assessment and risk scoring on a prospective issuer Is the risk scoring system proprietary or outsourced? (If “outsourced”, please specify the outsourced parties and how you will ensure the outsourced services meet the requirement in the Guidelines) H. Monies handling arrangements Describe the monies handling arrangements Name of licensed financial institution Name of trustee
I. Transaction process flow
Describe the financing process flow (from point of offering of investment notes/ Islamic investment notes until release of funds to issuer) Describe the repayment process flow (from point of receiving monies from issuers until repayment to investors) Describe the refund process flow (such as unsuccessful financing campaign or any other circumstances) J. Compliance arrangements Compliance procedures : Describe the compliance procedures that meets the regulatory requirements Compliance monitoring programme : Describe the actions to be taken for compliance

Financial

crime
: Describe the procedures and steps that you will take to counter the risks of the following:
(i) fraud or dishonesty
(ii) misconduct/misuse of information relating to capital markets (iii) money laundering Market conduct : Describe the controls, procedures and arrangements to mitigate/ counter market abuse K. Business risks What are the main business risks and how do you intend to manage those risks? Expected users 12 months after Go Live Number of Issuer: _____ Number of Investor: _____ Target funds raised:_____ Describe the risk management framework (including procedures relating to internal audit, internal controls and security)
L. Default management & recovery
Under Section I on Transaction process flow of the repayment arrangements, describe the measures and arrangements to ensure compliance of issuer’s obligations Details on default of repayment arrangements (including measures to manage repayment arrears) Details on collection arrangements M. Recovery and resolution Describe the recovery and resolution processes including details on the arrangements that will be administered to ensure the continuity of the investment notes / Islamic investment notes N. Financial resources Kindly provide the following:
Monthly cash flow forecast for the first 12 months of Go Live Attached Proforma income statement for the first 5 years of Go Live or up to the year it achieves profit (* if the latter is longer than 5 years ) (The following minimum items must be disclosed:
(i) itemized gross income
(ii) itemized expenditure
Attached
O. Systems and controls
Will the IT systems utilized in the operationalization of the P2P market be proprietary/ off-the-shelf/ outsourced? (If outsourced, please specify arrangements and how you will ensure it meets the requirement in the Guidelines) Business continuity and disaster recovery Full business continuity procedures Any outsourcing arrangements for business continuity and disaster recovery (Please provide details) Describe record keeping and audit trail mechanism P. Personnel Information of key personnel and organisational structure Q. User education and awareness Describe your plans on user education and awareness 2B.2 REGULATORY STATUS If the Applicant is operating similar market(s) or conducting a business in any regulated activity in Malaysia or any other jurisdiction, provide relevant information such as:
The name(s) of such market(s) and/or type of regulated activity(ies) The name(s) of such jurisdiction(s) The name(s) of any supervisory authority, including self-regulatory organisation, that exercise oversight over the Applicant or its related corporations in these jurisdictions Evidence of the Applicant’s authorisation to operate a market or conduct a business of a regulated activity in these jurisdictions, including a copy of any conditions imposed on the Applicant’s market operations and conduct of regulated activity in these jurisdiction(s) As applicable, documentation that would allow the SC to consider if the requirements and supervision of the Applicant is subject to are sufficiently equivalent to the requirements and supervision to which under the CMSA, e.g. a summary of the laws, legislation, regulations and rules applicable to the Applicant in these jurisdiction(s) Has the Applicant ever been rejected or refused license, authorisation or registration to operate similar market(s) or to conduct a business in any regulated activity in any jurisdiction? Yes (If “Yes”, please specify details) No 2B.3 OTHER INFORMATION Is there any other information which the Applicant considers necessary relevant in the assessment of this application? Yes (If “Yes”, please specify details) No 2B.4 TRUE AND CORRECT INFORMATION We hereby declare that all information provided in Form 2B and its annexures is true and correct. …………………………………………………………… …………………………………………………………… Signature Signature Name (Director) :
Name
(Director)
:
Date:
Date: