Securities Law - Chapter 4
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Questions and Answers

Which of the following is NOT a learning objective for this chapter on securities law in Malaysia?

  • Analyze the impact of global financial markets on the Malaysian securities industry. (correct)
  • Discuss the Acts and Regulations pertaining to the Securities Industry in Malaysia.
  • Explain the laws and regulations governing the operation of the securities industry in Malaysia.
  • Differentiate each Acts and Regulations pertaining to the Securities Industry in Malaysia.

    • The learning objectives for this chapter aim to equip students with the ability to identify market misconduct using securities law provisions.

    True (A)

    What are the three primary objectives students should achieve after studying this chapter?

    The three primary objectives are to discuss the Acts and Regulations related to the Securities Industry in Malaysia, differentiate those Acts and Regulations, and explain the laws and regulations governing the securities industry's operation.

    Applying the provisions of securities law helps in discovering ______ in the market.

    <p>market misconduct</p> Signup and view all the answers

    Match the learning objective with its corresponding description:

    <p>Discuss the Acts and Regulations pertaining to the Securities Industry in Malaysia. = Understand the specific laws and rules governing the securities industry. Differentiate each Acts and Regulations pertaining to the Securities Industry in Malaysia. = Compare and contrast different laws and regulations to see their unique features. Explain the laws and regulations governing the operation of the securities industry in Malaysia. = Provide a comprehensive understanding of how the securities industry functions within a legal framework. Apply the provisions of securities law in discovering market misconduct. = Use legal knowledge to detect illegal or unethical activities in the market.</p> Signup and view all the answers

    Which of these sections relate to prohibited conduct related to securities?

    <p>175, 176, 177, 178, 181 (B)</p> Signup and view all the answers

    The maximum penalty for a person found guilty of contravening sections 175, 176, 177, 178, 179 or 181 is 10 years imprisonment and a fine of at least one million ringgit.

    <p>True (A)</p> Signup and view all the answers

    What is the primary purpose of the Securities Industry (Central Depositories) Act 1991 (SICDA)?

    <p>To regulate central depositories and the deposit, holding, withdrawal, and dealings in securities deposited with them.</p> Signup and view all the answers

    The ______ of Malaysia is exempt from the restrictions on the establishment of a central depository under section 3(2).

    <p>Central Bank</p> Signup and view all the answers

    Match the following terms with their corresponding descriptions:

    <p>Central depository = An organization responsible for holding and managing securities in electronic form Securities = Financial instruments representing ownership or debt Market rigging = Manipulating the market to create a false impression of price or demand False or misleading statements = Providing inaccurate or deceptive information about securities</p> Signup and view all the answers

    Which of the following acts is NOT specifically mentioned as pertaining to the Securities Industry in Malaysia?

    <p>Malaysian Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA) (E)</p> Signup and view all the answers

    The ______ is a body corporate established by the Securities Commission Act 1993 (SCA).

    <p>Securities Commission</p> Signup and view all the answers

    The Securities Commission Act 1993 (SCA) outlines the establishment of the 'Securities Board' as the primary regulatory body for the securities industry in Malaysia.

    <p>False (B)</p> Signup and view all the answers

    What is the primary function of the Securities Commission according to the provided text?

    <p>The primary function of the Securities Commission is to regulate the securities industry in Malaysia.</p> Signup and view all the answers

    Match the following acts with their corresponding abbreviations:

    <p>Securities Commission Act 1993 = SCA Capital Markets and Services Act 2007 = CMSA Securities Industry (Central Depositories) Act 1991 = SICDA Companies Act 1965 = CA Financial Service Act 2013 = FSA Islamic Financial Service Act 2013 = IFSA</p> Signup and view all the answers

    Which Act primarily regulates the securities industry in Malaysia?

    <p>Securities Commission Act 1993 (SCA) (A)</p> Signup and view all the answers

    The Securities Commission has the ability to acquire, hold, and dispose of movable and immovable property.

    <p>True (A)</p> Signup and view all the answers

    Which of the following sections in the Financial Service Act 2013 (FSA) deals with the restriction on offering shares, debentures, etc. for subscription or purchase?

    <p>Section 363 (B)</p> Signup and view all the answers

    The Securities Commission has the function of ensuring the ______ and ______ of capital markets in Malaysia.

    <p>fairness, efficiency</p> Signup and view all the answers

    The Financial Service Act 2013 (FSA) is primarily aimed at promoting economic growth.

    <p>False (B)</p> Signup and view all the answers

    What is the primary goal of the Financial Service Act 2013 (FSA)?

    <p>To promote financial stability</p> Signup and view all the answers

    Reporting institutions are required to keep records for all transactions, regardless of the amount involved.

    <p>False (B)</p> Signup and view all the answers

    The ______ Act 2013 is designed to regulate and supervise financial institutions, payment systems, and other relevant entities.

    <p>Financial Service</p> Signup and view all the answers

    Which of the following is NOT a type of transaction that a reporting institution is required to record?

    <p>Purchase of real estate (B)</p> Signup and view all the answers

    Match the following sections of the Financial Service Act 2013 (FSA) with their respective provisions:

    <p>Section 363 = Restriction on offering shares, debentures, etc. for subscription or purchase. Section 364 = False and misleading statements. Section 365 = Dividends payable from profits only. Section 366 = Fraudulently inducing persons to invest money.</p> Signup and view all the answers

    A reporting institution must report any transaction that exceeds the amount specified by the ______.

    <p>competent authority</p> Signup and view all the answers

    Which section of the Financial Service Act 2013 (FSA) focuses on providing relief from requirements regarding the form and content of accounts and reports?

    <p>Section 169A (B)</p> Signup and view all the answers

    Section 368A of the Financial Service Act 2013 (FSA) deals with the power of the Registrar to require a statement of valuation of assets.

    <p>False (B)</p> Signup and view all the answers

    What information must be included in the record of a transaction?

    <p>The record must include the identity and address of the person conducting the transaction, the beneficiary or person on whose behalf the transaction is conducted, the accounts involved, the type of transaction, the identity of the reporting institution, and any other relevant information that might indicate suspicion of unlawful activity.</p> Signup and view all the answers

    Match the following information with the corresponding requirement for record-keeping:

    <p>Identity and address of the person conducting the transaction = (a) Type of transaction = (d) Identity of the reporting institution = (e) Identity and address of the beneficiary = (b)</p> Signup and view all the answers

    Which section of the Financial Service Act 2013 (FSA) addresses the issue of dividends being payable only from profits?

    <p>Section 365</p> Signup and view all the answers

    When should a reporting institution report a transaction to the competent authority?

    <p>Both A and B (D)</p> Signup and view all the answers

    What is the purpose of record-keeping and reporting requirements for reporting institutions?

    <p>Record-keeping and reporting requirements aim to prevent money laundering and related financial crimes by providing authorities with information about suspicious transactions.</p> Signup and view all the answers

    Under what circumstances can an investigating officer enter premises without a search warrant?

    <p>When they have a reasonable suspicion that an offense related to the Act has been committed. (A)</p> Signup and view all the answers

    The form of the record for a transaction can only be determined by the competent authority.

    <p>True (A)</p> Signup and view all the answers

    An investigating officer is allowed to seize and detain any property, record, report, or document found during a search.

    <p>True (A)</p> Signup and view all the answers

    What is the maximum fine for contravening any provision of this Act or regulations made under it?

    <p>Two hundred and fifty thousand ringgit</p> Signup and view all the answers

    An investigating officer can seize and detain any ______ found during a search of premises.

    <p>property, record, report or document</p> Signup and view all the answers

    Match the following actions with the corresponding allowed actions for an investigating officer:

    <p>Enter Premises = Without a search warrant if there is reason to suspect an offense under the Act has been committed. Search Premises = For any property, record, report or document. Inspect Documents = Make copies of or take extracts from any seized record, report or document. Seize and Detain = Any property, record, report or document found during a search.</p> Signup and view all the answers

    Who is responsible for reporting suspicious transactions under Part V of the Act?

    <p>Reporting institutions (B)</p> Signup and view all the answers

    The Act explicitly defines what a 'suspicious transaction' is.

    <p>False (B)</p> Signup and view all the answers

    What is the purpose of Part IV of the Act?

    <p>Retention of Records</p> Signup and view all the answers

    Flashcards

    Securities Industry

    The sector involving financial instruments for trading and investment.

    Acts and Regulations

    Laws enacted to govern operations in the securities industry.

    Market Misconduct

    Unethical behavior in the trading of securities, like insider trading.

    Securities Law

    Laws regulating the issuance and trading of financial securities.

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    Regulatory Compliance

    Adherence to laws and regulations governing the securities industry.

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    Record-Keeping

    The process of maintaining detailed documentation of transactions by institutions.

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    Reporting Institution

    An entity responsible for reporting transactions to the competent authority.

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    Competent Authority

    An official body that specifies regulatory requirements for transactions.

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    Transaction Reporting Threshold

    A specified amount above which transactions must be reported.

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    Identity Information

    Records include the identity and address of parties involved in a transaction.

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    Type of Transaction

    The nature of the transaction (e.g., deposit, withdrawal, exchange).

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    Suspicious Transactions

    Transactions that raise suspicion of unlawful activity must be reported.

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    Affected Accounts

    The accounts involved in a transaction must be identified and recorded.

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    Penalty for securities offences

    Conviction for securities offences results in up to 10 years imprisonment and a fine of at least one million ringgit.

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    Stock market manipulation

    Actions aimed at deceiving or misleading investors to affect stock prices.

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    False or misleading statements

    Making untrue claims that could mislead investors or affect market prices.

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    Fraudulent inducement

    Encouraging someone to trade securities based on false information.

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    Securities Industry Act 1991

    Regulates central depositories and dealings in securities; includes rules against misconduct.

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    Profit and Loss Account

    A financial statement summarizing revenues, costs, and expenses over a period.

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    Balance Sheet

    A snapshot of a company's assets, liabilities, and equity at a specific point in time.

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    Directors' Report

    A report detailing the operations and financial performance of a company for shareholders.

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    False and Misleading Statements

    Statements that deliberately mislead stakeholders about financial performance.

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    Dividends Payable from Profits Only

    Dividends can only be paid from a company's profits, not from capital or reserves.

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    Penalty for Improper Use of 'Limited'

    Legal penalties imposed for misusing the designations 'Limited' or 'Berhad' in a company name.

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    Frauds by Officers

    Deceptive practices performed by company officers for personal gain or misleading stakeholders.

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    Regulation of Financial Institutions

    Oversight and rules governing the behaviour of financial entities and markets focused on stability.

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    Securities Commission Act 1993 (SCA)

    Establishes the Securities Commission as a body corporate in Malaysia.

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    Functions of the Commission

    The Commission has the authority to enter contracts and manage properties.

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    Perpetual succession

    The capability of the Commission to continue indefinitely despite changes in membership.

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    Anti-Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA)

    Legislation aimed at preventing money laundering and terrorist financing in Malaysia.

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    General Penalty (SCA)

    Penalty for those who contravene provisions of the SCA.

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    Capital Markets and Services Act 2007 (CMSA)

    Regulates capital markets and financial services in Malaysia.

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    Islamic Financial Services Act 2013 (IFSA)

    Regulates Islamic financial services in Malaysia.

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    Financial Services Act 2013 (FSA)

    Legislation governing the financial services sector in Malaysia.

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    Investigating Officer Powers

    Authorities given to an investigating officer to enter and search premises without a warrant.

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    Contravention

    The act of violating any provision of the Act or its regulations.

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    Search Premises

    The action of entering and inspecting locations for evidence or records.

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    Inspect Records

    The act of examining or reviewing documents for compliance.

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    Seizure of Property

    Taking possession of items from premises as evidence.

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    Reporting Suspicious Transactions

    Mandatory obligation for institutions to report any suspected illegal activities.

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    Detention Period

    The duration for which seized items can be kept by an officer.

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    Penalties for Offences

    Fines or consequences imposed for violating the Act or regulations.

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    Study Notes

    Securities Law - Chapter 4

    • This chapter covers securities law in Malaysia
    • Learning objectives include discussing acts and regulations, differentiating pertaining to the securities industry, explaining governing laws and regulations, and applying securities law in discovering market misconduct.
    • Key acts and regulations include the Securities Commission Act 1993 (SCA), Capital Markets and Services Act 2007 (CMSA), Securities Industry (Central Depositories) Act 1991 (SICDA), Companies Act 1965 (CA), Financial Service Act 2013 (FSA), Islamic Financial Service Act 2013 (IFSA), and Anti Money Laundering and Anti-Terrorism Financing Act 2001 (AMLATFA).
    • The Securities Commission Act 1993 (SCA) establishes a body corporate, allowing the commission to enter into contracts, acquire property and deal with interests.
    • The Capital Markets and Services Act, 2007, is an act to consolidate the securities and Futures Industry Acts.
    • The Companies Act 1965 covers companies' accounts and audit.
    • The Financial Service Act 2013 promotes financial stability in the money and foreign exchange market.
    • The Islamic Financial Services Act 2013 regulates and supervises Islamic financial institutions
    • A general penalty of up to one million ringgit or imprisonment for up to five years applies to offenses
    • Other offenses contain differing penalties.
    • The functions of the Securities Commission include advising the minister on securities and derivatives, regulating matters, ensuring laws' compliance, regulating takeovers and mergers, and promotion of investor confidence.
    • Powers and functions of a central banking system and body corporate are discussed
    • Record keeping by institutions, reporting of institutions, and retention of records are described
    • Offenses relating to false trading, market rigging and stock manipulation are subject to prohibitions under division 1.
    • Penalties for various offenses are outlined.
    • Provisions of Malaysia's Anti-Money Laundering and Anti-Terrorism Financing Act of 2001 and related guidelines are covered.

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    Description

    Explore the intricacies of securities law in Malaysia with this quiz on Chapter 4. Participants will discuss key acts, regulations, and governance surrounding the securities industry. Gain insights on market misconduct and the legal frameworks that shape financial practices.

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