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Broker To Broker Referral Agreement for Malaysia

Broker To Broker Referral Agreement Template for Malaysia

A legally binding agreement governed by Malaysian law that establishes a formal referral relationship between two licensed brokers. The agreement outlines the terms and conditions for client referrals, including compensation structure, compliance requirements under Malaysian financial regulations, confidentiality obligations, and operational procedures. It ensures compliance with the Capital Markets and Services Act 2007 and other relevant Malaysian financial services legislation while protecting both parties' interests and establishing clear protocols for client handling and commission sharing.

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What is a Broker To Broker Referral Agreement?

The Broker to Broker Referral Agreement is essential for financial intermediaries operating in Malaysia who wish to establish formal referral relationships with other brokers. This document is particularly important in the Malaysian financial services sector, where strict regulatory oversight requires clear documentation of business relationships and commission arrangements. The agreement helps ensure compliance with Malaysian financial regulations, including the Capital Markets and Services Act 2007 and relevant Securities Commission guidelines. It typically includes detailed provisions for client handling, confidentiality, data protection, commission structures, and regulatory compliance requirements. This agreement is commonly used when brokers want to leverage each other's expertise or market access while maintaining regulatory compliance and protecting their business interests.

What sections should be included in a Broker To Broker Referral Agreement?

1. Parties: Identification of the referring broker and receiving broker, including licensing details and registered addresses

2. Background: Context of the agreement and brief description of the parties' businesses and intention to establish a referral relationship

3. Definitions: Key terms used throughout the agreement, including 'Referred Client', 'Referral Fee', 'Services', etc.

4. Scope of Agreement: Details of the referral arrangement, including types of clients and services covered

5. Referral Process: Step-by-step process for making and accepting referrals

6. Regulatory Compliance: Obligations to comply with Malaysian financial regulations and maintaining necessary licenses

7. Compensation Structure: Terms of referral fees, calculation methods, and payment procedures

8. Representations and Warranties: Each party's assertions regarding their authority, licenses, and capacity to perform

9. Confidentiality: Protection of confidential information and client data

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

11. General Provisions: Standard clauses including governing law, notices, and amendment procedures

What sections are optional to include in a Broker To Broker Referral Agreement?

1. Non-Solicitation: Restrictions on directly soliciting referred clients, used when parties want additional protection

2. White Labeling: Terms for using each other's branding, included when services will be white-labeled

3. Training and Support: Details of any training or support provided between parties, included for complex service arrangements

4. Insurance Requirements: Specific insurance coverage requirements, included for high-risk referral arrangements

5. Dispute Resolution: Specific dispute resolution procedures, included when parties prefer alternative dispute resolution methods

6. Cross-Border Provisions: Additional terms for international referrals, included when dealing with foreign brokers

What schedules should be included in a Broker To Broker Referral Agreement?

1. Schedule A - Referral Fee Structure: Detailed breakdown of fee calculations, tiers, and payment terms

2. Schedule B - Referral Process Workflow: Detailed step-by-step procedures for handling referrals

3. Schedule C - Required Documentation: List of documents required for client referrals and compliance

4. Schedule D - Approved Services: Comprehensive list of services covered under the referral arrangement

5. Appendix 1 - Contact Information: Key contact persons and their details for both parties

6. Appendix 2 - Compliance Checklist: Regulatory compliance requirements and verification procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Broker Agreement

Cost

Free to use

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