Published On: Sun, Mar 3rd, 2013

Bursa Malaysia Securities Issues Revamped Rules

Tajuddin Atan Bursa Malaysia CEO

Tajuddin Atan Bursa Malaysia CEO

Bursa Malaysia Securities Bhd issued March 1 the revamped Rules of Bursa Malaysia Securities Bhd (Revamped Rules) to strike a balance between being facilitative of business and market development and, ensuring the effectiveness for market regulation. The Revamped Rules will take effect on 2 May 2013.

Through the revamp, we have introduced some liberalisations and where appropriate, adopted a more principles-based regime in market regulation. This revamp recognises that the securities industry has changed substantially and securities brokers (also known as Participating Organisations (POs) have evolved over the years. There are now many different types of entities with differing business models, sizes, activities and risk exposures, carrying on the business of trading in securities. The POs have also matured considerably in their compliance culture.

Hence, we have strengthened the governance framework of the POs, but liberalised certain requirements imposed on POs leaving it to the POs to self-regulate. The revamp will bring greater ease to the POs in managing their compliance obligation. Amongst the liberalisations introduced is the removal of the obligations to register compliance officers and to appoint heads at the POs’ branch offices. The enhanced governance framework, on the other hand, strengthens POs’ role in terms of investor safeguards. The changes made in this regard include the requirement for all POs to have a risk management committee to monitor and manage the risks of the PO. Previously, this requirement applied only to POs that conducted capital market activities in addition to the activities of trading in securities and margin financing.

In order to reduce the regulatory burden on the POs without compromising on investor protection, we have also simplified and streamlined the rules generally as well as our processes, application and reporting requirements. Through the revamp exercise, we also streamlined all directives issued previously for ease of compliance.

Bursa Malaysia Chief Executive Officer, Dato’ Tajuddin Atan said, “The key is in striking a balance between market development and regulatory objectives. The flexibility and liberalisations put in place under the revamp would allow the POs to enhance their efficiency and reduce their cost of doing business whilst not compromising on regulatory objectives.”

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