What is SCLE Module 19?
Module 19, Advisory Services (Rules and Regulations), is one of the Securities Commission Licensing Examinations run by the Securities Industry Development Corporation (SIDC). It covers the laws, rules and conduct standards for people who give investment advice or advise on corporate finance. Together with Module 12, it is the competency route for a Capital Markets Services Representative's Licence for those regulated activities.
The exam format
| Run by | Securities Industry Development Corporation (SIDC) |
|---|---|
| Questions | 60 multiple-choice questions |
| Time | 90 minutes |
| Pass mark | 70% |
| Book | Regulation module: prescribed printed reference materials are allowed (check SIDC's current list) |
| Split option | Module 19A (40 questions, 60 minutes) and Module 19B (30 questions, 60 minutes), both with a 70% pass mark |
| Validity | A pass is valid for two years from the exam date |
Fees and exam modes change from time to time, so check SIDC's current examination terms when you book.
What the exam covers
- Regulatory framework: the SC, the CMSA, Bursa Malaysia, regulated activities and the basics of contract and agency law.
- Licensing: the CMSL and CMSRL, fit and proper requirements, competency modules and CPE.
- Conduct and suitability: know your client, suitability assessments, product disclosure, client money and complaints.
- Conflicts of interest: disclosure of interests, information barriers, front running, personal dealing and soft commissions.
- Market misconduct: false trading, market rigging, misleading statements and insider trading, with criminal and civil penalties.
- AML and investor protection: AMLA reporting, customer due diligence, sanctions, record keeping and redress schemes.
- Fund raising and listing: SC and Bursa approvals, the prospectus, Principal Advisers, public spread and related party rules.
- Take-overs: the 33% mandatory offer threshold, the 2% creep rule, offer price, independent advice and compulsory acquisition.
Free official resources, and what we add
SIDC publishes the exam terms and study outlines, and the SC publishes the CMSA, the Licensing Handbook and its guidelines free on its website. There is no free official question bank. Our questions are original and each explanation names the law or guideline it comes from.
How to prepare
- Read the SIDC study outline so you know exactly which laws and guidelines are in scope.
- Learn the key numbers: the 33% control threshold, the 2% creep in six months, 25% public spread, 5% substantial shareholding and six years for AML records.
- Be clear on the market misconduct offences and the penalty of up to ten years and a fine of not less than RM1 million.
- Practise applying suitability and conflict rules to short scenarios, as many questions are written that way.
- Practise one topic at a time here, then sit full 60-question mocks in 90 minutes.
Practice questions with answers
Tap a question to see the correct answer and explanation.
Which Act is the main law governing capital market intermediaries and market conduct in Malaysia?
- The Financial Services Act 2013 (Act 758)
- The Companies Act 2016
- The Islamic Financial Services Act 2013
- The Capital Markets and Services Act 2007
Answer: D, The Capital Markets and Services Act 2007. The CMSA 2007 sets out licensing, conduct, market misconduct, fund raising and take-over provisions. The FSA 2013 governs banks and insurers under BNM. Source: Capital Markets and Services Act 2007 (CMSA).
A firm wants to carry on the business of investment advice. What must it hold?
- A Type A poisons licence
- A Capital Markets Services Licence
- A business permit from the local council
- A banking licence from BNM
Answer: B, A Capital Markets Services Licence. No person may carry on a business in any regulated activity unless it holds a Capital Markets Services Licence for that activity, or is exempt or registered. Source: Capital Markets and Services Act 2007 (CMSA).
An adviser recommends a high-risk product to a client with a short horizon and low risk tolerance. What is the main problem?
- The client may only pay by cheque, not transfer
- The product is unlisted and so cannot be sold
- The adviser's fee may be too low for the work involved
- It is unsuitable for the client
Answer: D, It is unsuitable for the client. Recommendations must be suitable for the client's profile and have a reasonable basis. A mismatch with risk tolerance and horizon is a conduct breach. Source: SC Guidelines on Conduct for Capital Market Intermediaries.