Introducing Broker Agreement Template for Malaysia

The Introducing Broker Agreement is essential for financial institutions operating in Malaysia that wish to establish formal referral relationships within the financial services sector. This document is used when a licensed broker (Principal Broker) wants to expand their client base through partnerships with other market participants (Introducing Brokers) who can refer potential clients. The agreement must comply with Malaysian regulatory requirements, including the Capital Markets and Services Act 2007, Securities Commission guidelines, and anti-money laundering regulations. It typically includes detailed provisions for commission structures, service levels, compliance procedures, and data protection requirements. This document is particularly relevant in the context of Malaysia's growing financial services sector and the increasing importance of regulated intermediary relationships.

1. Parties: Identification of the Principal Broker and the Introducing Broker, including licensing and registration details

2. Background: Context of the agreement, brief description of both parties' businesses, and purpose of the arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Scope: Terms of appointment of the Introducing Broker and scope of authorized activities

5. Regulatory Compliance: Obligations to comply with Malaysian regulations, particularly the Capital Markets and Services Act 2007

6. Introducing Broker's Obligations: Detailed responsibilities including client introduction, due diligence, and documentation requirements

7. Principal Broker's Obligations: Services to be provided to introduced clients and support to the Introducing Broker

8. Commission Structure: Details of commission calculations, payment terms, and conditions

9. Representations and Warranties: Key assurances from both parties, including licensing status and compliance capabilities

10. Confidentiality: Provisions for protecting confidential information and compliance with PDPA 2010

11. Anti-Money Laundering Compliance: Specific AML/CTF obligations and procedures

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

13. Post-Termination Obligations: Ongoing obligations after agreement termination

14. Governing Law and Jurisdiction: Malaysian law as governing law and jurisdiction for disputes