[A Robert Chaen Investment Series]

Be warned that there are many investors and fund-raisers who are not aware that when they sell the IPO dream, they must always warn the audience or students that they must first get approval from the Security Commission Malaysia (SCM), and offer a SCM-approved prospectus when raising pre-IPO funds.

According to SCM, it is illegal to raise Pre-IPO funds under the relevant Clause in the Capital Markets and Services Act 2007: Section 212 and Section 232.

Reasons for being listed as illegal activities by Security Commission Malaysia: Carrying activities without a license, without authorization from the SCM, possible fraud scheme, issuing shares without prospectus, unauthorized usage of the SC’s name or logo in their website, raising Pre-IPO funds, unlicensed private equity or venture capital firm, offering IPO in website without license, illegal initial coin offering, marketing of foreign pre-IPO shares in Malaysia, furnishing false documents to the SC.

It is also illegal to operate a private equity firm without a SCM license. For the Public Register of License Holders, you can click here, Licensed and Registered Persons: https://www.sc.com.my/regulation/licensing/licensed-and-registered-persons

The Public Register includes:

You can also check if a particular person or company is under Investor Alert. Click here for List of Unauthorised Websites/ Investment Products / Companies / Individuals: https://www.sc.com.my/regulation/enforcement/investor-alerts/sc-investor-alerts/list-of-unauthorised-websites-investment-products-companies-individuals

The SC’s Investor Alert List provides information on persons/entities that do not comply with our securities law. This list includes persons/entities that:-
  1. Carry on capital market regulated activities without a license or registration. SC regulates the following capital market activities:- 
    1. Dealing in securities; 
    2. Dealing in derivatives; 
    3. Fund management; 
    4. Advising on corporate finance; 
    5. Investment advice; 
    6. Financial planning; and 
    7. Dealing in private retirement schemes
  2. Provide services as a market operator; or
  3. Issue or offer securities without proper approval, authorization or recognition.
Please take note that this list is not exhaustive and will be updated periodically. This list serves as a guide to investors prior to making any investment decisions. If you require any clarification or come across any suspicious capital market activities that you wish to highlight to the SC, you may contact us at 603-6204-8999 or email: aduan@seccom.com.my.

Robert Chaen’s Investment Series will cover how to make complaints to Security Commission Malaysia under whistleblower protection law, the 101 basics in investments, how to raise funds legally through six types of investors, how to use InvestSmart program by SCM, the top 10 most common negative money beliefs and how to transform them. Subscribe.


Written and compiled by:

Robert Chaen
Investment Writer, Investigative Journalist on capital market industry, ecommerce, scams, and cults. He is CEO of Biting Pen, ChangeU EAcademy, Robren Services and Robren Mega EMall.

Robert’s Biodata: https://www.changeu.co/ceo-celebrity-whisperer-robert-chaen.html

Published: 31st July 2020.


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Do you know that Raising Pre-IPO funds is Illegal in Malaysia and you need a SCM License to be a Private Equity firm?


Do you know that Raising Pre-IPO funds is Illegal in Malaysia and you need a SCM License to be a Private Equity firm?