Fund Distribution Agreement Template for Malaysia

The Fund Distribution Agreement is essential for investment fund managers seeking to expand their distribution network in Malaysia through authorized intermediaries. This document is required when establishing formal arrangements between fund managers and distributors for the marketing and sale of unit trusts, mutual funds, or Islamic funds in Malaysia. It must comply with the Capital Markets and Services Act 2007, Securities Commission guidelines, and for Islamic funds, Shariah requirements. The agreement typically includes detailed provisions on regulatory compliance, distribution rights, commission structures, marketing approvals, and operational procedures. It's particularly important in Malaysia's dual financial system, which accommodates both conventional and Islamic investment products.

1. Parties: Identification of the Fund Manager/Company and the Distributor, including their regulatory licenses and corporate details

2. Background: Context of the agreement, including the Fund Manager's authority to issue/manage the funds and Distributor's qualification to distribute

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including regulatory and technical terms

4. Appointment and Scope: Terms of appointment, distribution territory, exclusivity (if any), and scope of distribution rights

5. Regulatory Compliance: Obligations to comply with Malaysian securities laws, SC guidelines, and other applicable regulations

6. Distributor's Obligations: Core responsibilities including marketing, client onboarding, AML/KYC procedures, and reporting

7. Fund Manager's Obligations: Support, materials, training, and information to be provided to the Distributor

8. Fees and Commission Structure: Detailed commission structures, payment terms, and calculation methods

9. Marketing and Promotional Materials: Requirements for approval and use of marketing materials in compliance with SC guidelines

10. Representations and Warranties: Standard and specific warranties regarding licenses, capabilities, and compliance

11. Record Keeping and Reporting: Requirements for maintaining records and providing reports to the Fund Manager

12. Confidentiality: Protection of confidential information and data protection compliance

13. Term and Termination: Duration of agreement and circumstances for termination

14. Indemnification and Liability: Risk allocation between parties and liability limitations

15. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.