Are you having a hard time determining whether an investment scheme is legitimate? Or whether they are operated by companies that are regulated? 

These days, there are so many investment and financial schemes on the internet that you are having a hard time determining whether they are legitimate. After all, there are many such schemes that have turned out to be scams that have financially ruined many lives, while others have legitimately been good investment options.

How do you tell them apart?

You can inform yourself better through two lists that are the authoritative source in determining whether companies are operating illegally or not:

This article explores why you should refer often and reliably look to these two lists to identify scams.

Reason #1: Reported by the Public

One of the big reasons why any lists have any sort of credibility is that they have inputs from the public like you which reflects the real sentiments on the ground.

You would probably believe a list if there are a sizeable amount of people “complaining” about a company and provides you with more knowledge and awareness in making a decision about the company’s trustworthiness.

Both the Financial Consumer Alert (FCA) and Investor Alert (IAL) lists gather inputs from the public on companies and financial/investment schemes in the market.

With the proliferation of many investment-related scams during Covid-19 times, many people are increasingly being exposed to them on social media and especially messaging platforms like Whatsapp.

The rise of “investment and financial gurus” that promise returns beyond your wildest dreams is a reflection of the combination of the dire financial conditions on the ground and some people taking advantage of the vulnerable side of you wanting to make extra income to support yourself and your family.

More than ever, these lists need more inputs from you to improve their awareness in the public’s eye. The more inputs they have, the more they will become visible in the public’s attention.

 

If you are looking to submit an inquiry on any suspicious companies or schemes, you can do so by emailing or contacting Bank Negara or Securities Commission as below :

 

Reason #2: Investigated by Government Institutions

The Financial Consumer Alert List (FCA) is published and updated by Bank Negara Malaysia, while the Investor Alert List (IAL) is published by the Securities Commission. The FCA focuses more on companies and entities that are not under Bank Negara’s regulation, while the IAL focuses on unauthorised investment schemes, products and companies.

Once Bank Negara Malaysia and Securities Commissions receives inquiries from the public on certain companies and schemes that fall under their purview, they will conduct comprehensive reviews and research into them to determine whether they are harmful to you or under their regulation.

Both Bank Negara Malaysia and Securities Commission have the necessary expertise and competency to determine these companies’ legitimacy, and have formal government laws and regulations to enforce them.

Bank Negara Malaysia has the following laws that regulates financial services, insurances, and currency activities in the market :

  1. Financial Services Act 2013 / Islamic Financial Services Act 2013
  2. Insurance Act 1996
  3. Money Services Business Act 2011
  4. Currency Act 2020

Meanwhile, Securities Commission also have the following laws to ensure an orderly capital market :

  1. Capital Markets and Services Act 2007
  2. Securities Commission Malaysia Act 1993
  3. Securities Industry Act 1993
  4. Futures Industry Act 1993

They don’t simply add them to their list after receiving inquiries and complaints from the public, to prevent a systematic abuse by certain individuals. Once these companies and products are determined to be harmful, they will add them to the list with some information on the companies.

Reason #3: Consistently and Regularly Updated

The Financial Consumer Alert List (FCA) and Investor Alert List (IAL) are not those kind of static lists that gets updated once every year or two. Instead, they are very dynamic lists that constantly updates the list of companies that are considered not within their regulatory framework or harmful to the public.

The FCA list was last updated on 30 Jan 2021, where it added four companies. There are now over 400 companies that are registered under the list which dates all the way back to 2012.

The IAL list on the other hand was last updated on 9 Feb 2021, where one company was added and receives more frequent updates as investment scams have been increasing quite significantly in the past year.

The regular and consistent updates could help the public and you in being aware about the numerous companies operating potentially illegal activities.

Reason #4: Easy to Search and Easy to Use

For both Financial Consumer Alert List (FCA) and Investor Alert List (IAL), they are both easy to search and user friendly for anyone looking to search for any companies that are suspicious.

The FCA list has a search bar and are categorised by alphabetical order. Hence, if you are looking for a company by its name, you can easily do so by filtering by the first letter of the company name. If you only have one part of the name of the company, you can easily also search for them in the search bar.

The IAL list however does not a search functionality but you can easily search for the name of the company by pressing Ctrl-F and searching for the name of the company. However, it does have the benefit of listing what are the recently added entries and a category called digital assets which is a relatively new asset class in the market today.

Reason #5: Gateway to Information on Companies and Schemes

You can search for information on the Financial Consumer Alert List (FCA) through Bank Negara Malaysia here and the Investor Alert List (IAL) through Securities Commission here. These lists provide gateway information on the companies and schemes such as :

  1. Full Name of Company and Scheme
  2. Website link
  3. Date Added
  4. Comments and Remarks

While they do not provide comprehensive research and analysis on these companies conducted by Bank Negara Malaysia and Securities Commission, they do provide basic information that you can leverage on to learn more about the companies that you are trying to investigate.

Of note, you can start from the website links to investigate whether these companies are legitimate. The IAL even offers information on the physical address of the companies, where you can confirm whether they indeed are a real company.

However, probably the most useful information would be the comments and remarks in the lists. The IAL has information on what the Securities Commission thinks about the company where you will find remarks such as “Carrying out unregulated activities”, “misuse of SC’s name and logo”, and “Unlicensed capital market activities” helpful in determining whether the company or scheme is legitimate. Unfortunately, for Bank Negara’s FCA list, it has stopped providing information on the type of unregulated activities such as “gold investment”, “forex trading”, and “unlicensed activities’ since 2017.

For information on licensed companies and persons, you can try searching for them through Bank Negara Malaysia’s list of :

  1. Licensed Financial Institutions
  2. Approved and Registered Intermediaries
  3. Financial Holding Companies
  4. Money Service Business
  5. Development Financial Institution
  6. Approved Representative Offices of Foreign Banking Institutions in Malaysia

For the Securities Commission, you can search for licensed and regulated companies through its list of licensed and registered persons.

Conclusion

The Financial Consumer Alert and Investor Alert lists published by Bank Negara Malaysia and Securities Commission respectively, are great resources in which you can draw from to investigate whether a company or scheme is legitimate. They receive many inputs and inquiries from the public, and are taken up by reputable government institutions to investigate their legitimacy. They are also regularly updated, providing a comprehensive view on the ground, and are also easy to use and provides gateway information for you. You should pay attention to these lists to be more aware about them to protect yourselves against potential scams in the market.

 

Are there any particular schemes that you want to highlight? Let us know in the comments below!

 

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