Malaysia's new Financial Services Professional Board (FSPB) can help fund houses set standards for anti-money laundering and compliance with the US Foreign Account Tax Compliance Act (Fatca), said market observers.

The industry-led board, which was launched on Wednesday last week, intends to set “clear, internationally recognised and universally applicable standards of professional conduct and ethical behaviour” in banking, insurance, the capital markets and the Islamic finance industry. But specific details of what exactly such standards advocate seem scant on the ground.

One area where the FSPB can first take a look at is the standardisation of industry practices on anti-money laundering (AML), said Lim Wei Chien, a partner at Malaysian law firm Naqiz & Partners.

While AML issues come under the purview of Bank Negara Malaysia, the country’s central bank, asset managers may have varying internal policies to check suspicious activity. The board could help set an industry-wide standard on how this can be done.

Related to this is the implementation of the US’s global Fatca rule, which Malaysia will comply with starting in June. Fatca will require all non-US-based institutions, including asset managers, to report on US citizen clients' accounts to the US Internal Revenue Service.

While Lim said many international fund houses with business arms in Malaysia have the financial capacity to comply with the US tax rules, many local players are not in the same position. FSPB could therefore be a platform to share compliance know-how between all financial institutions operating onshore.

David Ng, chief executive of Affin-Hwang Asset Management in Kuala Lumpur, praised the establishment of a self-regulating professional body: "Peer pressure can be a good thing. From an asset management perspective, it means global investors will find home-grown, local managers more credible in adhering to their governance and internal control policies."

But others are skeptical whether a voluntary organisation will raise professional standards quickly.

“There is no penalty provision if you don’t comply,” said one lawyer, who declined to be named. “I feel that it will take some time before there will be any people complying with it. It may take some time in terms of education for the end investors and also the participants to understand the new standards.”

The launch of the FSPB comes soon after the unveiling of a landmark investor code for institutional investors this June, which will require institutions to take more responsibility in improving corporate governance among the companies they invest in.

The FSPB is chaired by Azman Hashim, non-executive chairman and founder of Malaysia's AmBank Group.

Members with regulatory background include Belinda Gibson, former deputy chairman to the Australian Securities and Investment Commission, and Carlson Tong, chairman to Hong Kong’s Securities and Futures Commission.

Other board members include Abdul Kadir Kassim of law firm Kadir Andri & Partners; Johan Raslan, former executive chairman of PwC Malaysia; Megat Zaharuddin of Maybank; Ng Keng Hooi of insurer AIA; Richard Thomas of Gatehouse Bank; David Tweedie of International Valuation Standards Council; and Axel Weber of UBS.