Five unit trust consultants face sanctions in Kuala Lumpur over breaches of industry rules
KUALA LUMPUR – On December 23, the Federation of Investment Managers Malaysia (FIMM) publicly reprimanded five unit trust scheme (UTS) consultants after investigations confirmed misconduct and breaches of the organisation’s consolidated rules and ethical standards. The sanctions include registration bans ranging from six months to five years and took effect from November 24. The FIMM adviser misconduct case has drawn attention to compliance standards within Malaysia’s unit trust industry and has affected consultants based in the Klang Valley and other regions.
FIMM Adviser Misconduct cases reveal document falsification and fund misuse
The sequence of misconduct involved several consultants previously attached to prominent distributors such as Public Mutual Bhd and Kenanga Investors Bhd. Two former Public Mutual consultants, Cheu Kar Wai and Muhamad Khairulanuar Yusoof, submitted falsified academic certificates during their registration applications. Regulators later imposed two-year registration bans on both individuals.
Another consultant, Krisnan Kanniappen, also from Public Mutual, received a six-month registration ban. Investigations found that he forged investor signatures on transaction documents dated April 2022. Regulators also required him to undergo additional training on FIMM’s Code of Ethics.
More serious allegations involved Fadli Adha Abu Bakar. Evidence showed that he accepted RM5,500 in cash from an investor and issued falsified documents to portray legitimate unit trust investments between May and August 2023. Regulators imposed a five-year registration ban on him.
Another case involved Muhammad Afif Ajmal Safaruan, who previously worked with Public Mutual and later Kenanga Investors. He received a five-year registration ban. Investigators found that he requested investors to pre-sign and pre-thumb-print investment forms involving RM162,000. He later falsified documents to apply for financing facilities between August and November 2022.
These events triggered wider discussions about governance and ethical compliance within financial consultancy services in Malaysia.
FIMM Adviser Misconduct enforcement underscores zero-tolerance regulatory stance
According to an official FIMM statement released on Tuesday, the federation adopted a zero-tolerance stance toward breaches of its Consolidated Rules (FCR) and Code of Ethics. The regulator stressed that the sanctions serve as a deterrent. It also highlighted the importance of integrity and accountability in dealings with unit trust clients across Malaysia.
The federation stated that the registration bans restrict the individuals’ ability to operate in the sector. The duration of each ban depends on the severity of the violation and ranges from six months to five years. This approach aligns with broader regulatory objectives to protect investors and maintain public confidence in the capital market.
FIMM does not conduct law enforcement activities. However, it coordinates with relevant authorities when cases involve financial misappropriation or forgery. As of this report, authorities have not announced further criminal charges. Investigations may continue under applicable legal frameworks.
Public and industry response reflects concern over trust and professionalism in asset management
The announcement prompted discussions on social media platforms and financial forums among investors and industry watchers. Commentators acknowledged the need for regulatory vigilance. Many also called for stronger due diligence practices among distributors in the Malaysian financial sector.
Industry experts noted that isolated misconduct cases are not unusual. However, they said the frequency and nature of the breaches in this instance highlight the need for continuous education and robust compliance monitoring. The professional conduct of unit trust consultants plays a direct role in shaping investor confidence and the reputation of Malaysia’s capital markets.
Several observers suggested that improved verification and documentation systems could reduce opportunities for unethical practices. Others viewed mandatory training and stricter oversight as positive steps toward greater market resilience.
Implications for investor protection and industry integrity are significant for the regulatory landscape
In the short term, FIMM’s actions may lead distributors to apply closer scrutiny to consultation practices. Many firms may review internal controls and compliance frameworks. These adjustments could temporarily affect routine operations, especially in retail-focused areas such as Seri Kembangan, Batu Caves, and other parts of Selangor.
Over the longer term, the enforcement action may strengthen safety standards and transparency within Malaysia’s unit trust industry. Industry players are likely to place greater emphasis on accurate record-keeping and ethical sales conduct. Regulators may integrate these priorities into professional accreditation and monitoring systems.
The evolving regulatory environment may also encourage firms to adopt more advanced customer verification and documentation processes. These measures would support investor protection efforts. Continued vigilance and adaptive governance by bodies such as FIMM remain central to sustaining trust in Malaysia’s capital markets.
