diff --git a/lib/tokenize.cpp b/lib/tokenize.cpp
index 8d07b0ff1..79536b267 100644
--- a/lib/tokenize.cpp
+++ b/lib/tokenize.cpp
@@ -6061,9 +6061,14 @@ void Tokenizer::simplifyInitVar()
         if (tok->str() == "return")
             continue;
 
-        if (Token::Match(tok, "class|struct|union| %type% *| %var% ( &| %any% ) ;") ||
-            Token::Match(tok, "%type% *| %var% ( %type% (")) {
+        if (Token::Match(tok, "class|struct|union| %type% *| %var% ( &| %any% ) ;")) {
             tok = initVar(tok);
+        } else if (Token::Match(tok, "%type% *| %var% ( %type% (")) {
+            const Token* tok2 = tok->tokAt(2);
+            if (!tok2->link())
+                tok2 = tok2->next();
+            if (!tok2->link() || (tok2->link()->strAt(1) == ";" && !Token::simpleMatch(tok2->linkAt(2), ") (")))
+                tok = initVar(tok);
         } else if (Token::Match(tok, "class|struct|union| %type% *| %var% ( &| %any% ) ,")) {
             Token *tok1 = tok;
             while (tok1->str() != ",")
diff --git a/test/testtokenize.cpp b/test/testtokenize.cpp
index d491c0982..d3a105b55 100644
--- a/test/testtokenize.cpp
+++ b/test/testtokenize.cpp
@@ -63,6 +63,7 @@ private:
         TEST_CASE(tokenize28);  // #4725 (writing asm() around "^{}")
         TEST_CASE(tokenize29);  // #5506 (segmentation fault upon invalid code)
         TEST_CASE(tokenize30);  // #5356 (segmentation fault upon invalid code)
+        TEST_CASE(tokenize31);  // #3503 (Wrong handling of member function taking function pointer as argument)
 
         // don't freak out when the syntax is wrong
         TEST_CASE(wrong_syntax1);
@@ -841,6 +842,23 @@ private:
         tokenizeAndStringify("struct template<int { = }; > struct B { }; B < 0 > b;");
     }
 
+    // #3503 - don't "simplify" SetFunction member function to a variable
+    void tokenize31() {
+        ASSERT_EQUALS("struct TTestClass { TTestClass ( ) { }\n"
+                      "void SetFunction ( Other * m_f ) { }\n"
+                      "} ;",
+                      tokenizeAndStringify("struct TTestClass { TTestClass() { }\n"
+                                           "    void SetFunction(Other(*m_f)()) { }\n"
+                                           "};"));
+
+        ASSERT_EQUALS("struct TTestClass { TTestClass ( ) { }\n"
+                      "void SetFunction ( Other * m_f ) ;\n"
+                      "} ;",
+                      tokenizeAndStringify("struct TTestClass { TTestClass() { }\n"
+                                           "    void SetFunction(Other(*m_f)());\n"
+                                           "};"));
+    }
+
     void wrong_syntax1() {
         {
             const char code[] ="TR(kvmpio, PROTO(int rw), ARGS(rw), TP_(aa->rw;))";