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Questions and Answers
What was the original name of Bursa Malaysia Depositories Sdn Bhd?
What was the original name of Bursa Malaysia Depositories Sdn Bhd?
Which of the following restrictions applies to foreign ownership of property?
Which of the following restrictions applies to foreign ownership of property?
What is a requirement for companies with less than 30% Bumiputera equity?
What is a requirement for companies with less than 30% Bumiputera equity?
What is one of the functions of Bursa Malaysia Depository Sdn Bhd?
What is one of the functions of Bursa Malaysia Depository Sdn Bhd?
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Which class of properties is foreign interest explicitly restricted from acquiring?
Which class of properties is foreign interest explicitly restricted from acquiring?
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What does the AMLATF require regarding suspicious transactions?
What does the AMLATF require regarding suspicious transactions?
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Which of the following is NOT a function of the AMLATF?
Which of the following is NOT a function of the AMLATF?
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What is one of the purposes of the Companies Act 1965?
What is one of the purposes of the Companies Act 1965?
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Which of the following best describes the role of Bursa Malaysia?
Which of the following best describes the role of Bursa Malaysia?
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What should be included in the Memorandum of Association?
What should be included in the Memorandum of Association?
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What are foreign investment guidelines primarily designed to do?
What are foreign investment guidelines primarily designed to do?
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Which of the following is a component of the Articles of Association?
Which of the following is a component of the Articles of Association?
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What does the capital market primarily facilitate?
What does the capital market primarily facilitate?
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What did the Banking and Financial Institutions Act 1989 (BAFIA 1989) repeal?
What did the Banking and Financial Institutions Act 1989 (BAFIA 1989) repeal?
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What is one of the main objectives of the Capital Markets and Services Act 2007 (CMSA 2007)?
What is one of the main objectives of the Capital Markets and Services Act 2007 (CMSA 2007)?
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Which act provides the Central Bank with the power to investigate illegal activities?
Which act provides the Central Bank with the power to investigate illegal activities?
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Which act replaced the Securities Industry Act 1983 (SIA)?
Which act replaced the Securities Industry Act 1983 (SIA)?
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The Capital Market and Services Act 2007 (CMSA 2007) introduced what type of regime for capital market intermediaries?
The Capital Market and Services Act 2007 (CMSA 2007) introduced what type of regime for capital market intermediaries?
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Which institution does the Banking and Financial Institutions Act 1989 primarily regulate?
Which institution does the Banking and Financial Institutions Act 1989 primarily regulate?
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What is one of the aims of the CMSA regarding the stock exchange members?
What is one of the aims of the CMSA regarding the stock exchange members?
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What is a primary concern of the Banking and Financial Institutions Act 1989?
What is a primary concern of the Banking and Financial Institutions Act 1989?
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Study Notes
Regulations of Securities Industry - Chapter 2
- Key Acts and Regulations:
- Banking and Financial Institutions Act 1989 (BAFIA 1989)
- Capital Market and Services Act 2007 (CMSA 2007)
- Securities Industry (Central Depositories) Act 1991 (SICDA 1991)
- Securities Commission Act 1993 (SCA 1993)
- Company Act 1965
- Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA 2001)
- Other related acts and regulations
Banking and Financial Institutions Act 1989 (BAFIA 1989)
- Effective date: 1 October 1989
- Repeals previous acts: Finance Companies Act 1969 and Banking Act 1973
- Objectives/Provisions:
- Licensing and regulation of institutions carrying out banking, finance company, merchant banking, discount house, and money-broking businesses
- Guidance for regulating institutions in other financial businesses
- Integrated supervision of the Malaysian financial system
- Empowering the Central Bank to investigate and prosecute illegal activities to reduce white-collar crime
- Restrictions on deposits
Capital Market and Services Act 2007 (CMSA 2007)
- Effective date: 28 September 2007
- Repeals SIA 1983 and FIA 1993
- Introduces a single licensing regime for capital market intermediaries
Functions of Capital Market and Services Act 2007 (CMSA 2007)
- Ensures a fair and practical market for traded securities through its facilities
- Serves public interest by ensuring legal conflicts with corporate interests do not negatively affect the public
- Maintains that stock exchange members and listed corporations adhere to stock exchange rules
Functions of Capital Market and Services Act 2007 (CMSA 2007) - Additional points
- Must provide adequate and properly equipped premises for business operations
- Business needs competent personnel
- Adequate automated systems
- Necessary security arrangements
- Facilities to meet emergency situations
Securities Industry (Central Depositories) Act 1991 (SICDA 1991)
- Regulates central depositories and the deposit, holding, withdrawal, and dealing in securities
- Governs the operations of BMD Sdn Bhd
Securities Commission Act 1993 (SCA 1993)
- Legislation establishing the Securities Commission
- Established 1 March 1993
- Self-funding statutory body with investigative and enforcement powers
- Regulates the securities industry as a whole
- Covers Take-Over and Mergers.
- Extensive enforcement and investigation powers for fair, orderly market.
Company Act 1965
- Provides a comprehensive legal framework for supervising company operations
- Enforces registration of companies
Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA 2001)
- Effective date: 15 January 2002
- Provides offence of money laundering from predicate offences
- Includes measures for prevention
Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA 2001) - Functions
- Suspicious transaction reporting
- Record-keeping
- Functions of a financial intelligence unit for domestic and foreign enforcement agencies
- Investigation into money laundering
- Law enforcement for freezing, seizing, forfeiting, and prosecution
- Prohibition of falsification, concealment, and destruction of documents
Other Related Acts and Regulations
- Additional laws supporting the regulation of the securities industry
Tutorial Questions (Page 14)
- Tutorial questions relating to the listed acts and regulations on the specific areas of securities industry and regulations in Malaysia
Tutorial Questions (Page 15, 16)
- Various tutorial questions covering topics in financial markets, and stock markets
Regulatory Bodies in Malaysia
- Bank Negara Malaysia
- Securities Commission
- Bursa Malaysia Berhad
- Companies Commission of Malaysia
- Other related regulatory bodies
- Foreign Investment Committee
- Bursa Malaysia Depositories Sdn Bhd
Bank Negara Malaysia (BNM)
- Established 26 January 1959 under the Central Bank of Malaysia Act 1958
- Re-established under the Central Bank of Malaysia Act 2009, effective November 25, 2009
- Statutory body wholly owned by the Malaysian Government
- Reports to the Minister of Finance
- Keeps the Minister of Finance informed on monetary and financial sector policies
Roles and Functions of BNM
- Issues currency and manages reserves to safeguard currency value
- Acts as a banker and financial advisors
- Promotes monetary stability and a sound financial structure
- Influences the credit situation to benefit Malaysia
- Legal powers to regulate and supervise banking and non-bank financial intermediaries
Securities Commission (SC)
- Statutory body under the Securities Commission Act 1993 (SCA)
- Reports to the Minister of Finance
- Investigates and enforces areas within its jurisdiction
- Established on 1 March 1993
Securities Commission (SC) - Mission
- Promotes and maintains a fair, efficient, secure, and transparent securities market
- Facilitates orderly development of a competitive capital market
Securities Commission (SC) - Functions
- Registering prospectuses for corporations, excluding unlisted recreational clubs
- Approving corporate bond issues
- Regulating securities and future contracts
- Regulating take-overs and mergers of companies
- Regulates unit trust schemes
- Licenses and supervises all licensed persons
- Supervises exchanges, clearing houses and centralized depositories
- Ensures appropriate conduct of market institutions and licensed persons
Bursa Malaysia Depositories Sdn Bhd (BMD Sdn Bhd)
- Formerly Malaysian Central Depository Sdn Bhd
- Name changed in May 2004
- Incorporated in 1987
- Kuala Lumpur based
- Subsidiary of Bursa Malaysia Bhd
- Operates and maintains a central depository for securities traded on the exchange
Foreign Investment Committee (FIC)
- Non-citizens investing or owning property must consult the FIC.
- Provides guidelines on property acquisition involving local and foreign interests.
- Acquisition means any property transfer transaction.
- Foreign interests prohibited from owning some properties (low/medium cost residential units, properties on Malay reserves, Bumiputera quotas, stalls, agricultural land, National Heritage properties etc).
Conditions for Acquisition
- Companies without or with less than 30% Bumiputera equity need to increase holdings to at least 30%
Individual Tutorial Questions (Page 35)
- Specific questions relating to FIN346, FIN345, and relevant years/terms (specific cases)
Companies Commission of Malaysia (CCM)
- Statutory body regulating companies and businesses
- Became operational on 16 April 2002
- Formed by merging the Registrar of Companies (ROC) and the Registrar of Businesses (ROB)
- Serve as an agency for incorporation and business registration
- Provides company and business information to the public
- Ensures compliance with business registration and corporate legislation
- Maintains positive development of the corporate and business sectors
Functions of CCM
- Serves as agency to incorporate and register businesses
- Provides information to the public about companies and businesses
- Ensures compliance with business registration and corporate regulations
- Employs monitoring activities to support the growth of corporate and business sectors
Memorandum of Association
- Outlines external activities/powers of the company
- Specifies these details:
- Company name
- Company location
- Company purpose (types of business allowed)
- Member liability (limited by shares/guarantee)
- Names, addresses, and occupations of subscribers
- Share capital amount
- Share division into a fixed amount
Articles of Association
- Outlines internal company regulations
- Outlines these details:
- Director duties, rights, powers
- Director borrowing powers
- Notice and procedures for meetings
- Authority of directors
- Shareholder rights
- Capital alteration procedures
- Share issuance and call procedures
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Description
This quiz explores the key acts and regulations that govern the securities industry, focusing on significant legislation such as the Banking and Financial Institutions Act 1989 and the Capital Market and Services Act 2007. Dive into the provisions that shape the regulatory framework of the Malaysian financial system and learn about the integrated supervision of financial institutions. Test your knowledge on critical laws and their implications in the sector.
