1998
January Following the establishment of the National Economic Action Council (NEAC) on January 7, 1998, a National Economic Recovery Plan (NERP) was introduced as a blueprint for Malaysia’s economic recovery. The NERP focuses on pursuing a consistent line of action for the economic recovery of the nation. The recommendations include wide-ranging proposals for economic stabilisation and structural reforms as well as to address socio-economic priorities and sectors affected by the crisis. High on the priority list are actions to restore stability in the currency and capital markets (including the bond market), as well as to strengthen financial markets and economic fundamentals.
1999
June

The government announced that the SC would be the single regulatory authority for the corporate bond market. Following that, the NEAC established the National Bond Market Committee (NBMC) to–

provide overall policy direction for the orderly development of the corporate bond market;
conduct detailed studies on issues relating to corporate bond market development; and
identify and recommend appropriate implementation strategies.
2000
January Exemption from stamp duty granted for all instruments relating to the issue and transfer of private debt securities, which issue has been approved by Bank Negara Malaysia (BNM) or the SC.
Stamp Duty and Real Property Gains Tax exemption granted to securitisation transitions executed on or after 30 October 1999 but not later than 31 December 2000.
March A pre-announced auction calendar for Malaysian Government Securities (MGS) and indication of the size of its issue per quarter prior to the issue date was introduced. The MGS Auction Calendar was announced in line with the government’s commitment to facilitate the establishment of a reliable and efficient benchmark yield curve. This auction calendar can enhance the transparency and facilitate the formulation of investment strategies by investors. Efforts have been made to consolidate fragmented MGS issues by reopening the smaller sized “on-the-run” issues to create a more reliable, deep and evenly distributed benchmark yield curve for the pricing of corporate bonds.
July The SC became the sole regulator for all fund-raising activities following amendments to the Securities Commission Act 1993 (SCA), Companies Act 1965 (CA), Banking and Financial Institutions Act 1989 (BAFIA), Futures Industry Act 1993 (FIA) and Securities Industry (Central Depositories) Act 1991 (SICDA). The SC also assumed the role as the approving and registering authority for prospectuses in respect of all securities other than securities issued by unlisted recreational clubs. The Registrar of Companies (now the Companies Commission of Malaysia) is responsible for the lodgement of prospectuses. Following the above, the SC became the single regulator for the corporate bond market when it moved towards a full disclosure-based regulatory (DBR) approach with the release of–
The SC announced, on behalf of the NBMC, the NBMC Negative List denoting circumstances where the utilisation of proceeds from issuance of private debt securities is not permitted.
The Controller of Foreign Exchange issued the Exchange Control Guidelines on the Issuance of Private Debt Securities for Lead Arrangers to ensure compliance with the exchange control conditions/requirements under the new regulatory framework.
The Banking and Financial Institutions (Amendments of Definition of Deposit) Order 2000 was gazetted with effect from 1 July 2000. With this Order, non-licensed institutions will be allowed to enter into repurchase agreements (repo) transactions with licensed institutions under BAFIA.

October

The SC announced on behalf of the NBMC the relaxation of some restrictions on the utilisation of proceeds from issuance of private debt securities in the NBMC Negative List, in line with the relaxation of lending restrictions by BNM.
2001

January

All securitisation transactions approved by the SC are exempted from Stamp Duty and Real Property Gains Tax.

February

The Capital Market Masterplan (CMP) was launched. It set the strategic position and future direction of capital market development for Malaysia. The CMP is premised upon six key objectives, expressed in 152 recommendations and seeks to chart the strategic positioning and future direction of the Malaysian capital market for the next 10 years. It is intended to provide market participants with strategic clarity as to the vision and objectives for the capital market amid the changing market place. Seventeen of the recommendations in the CMP relate specifically to the development of the bond market.

The SC issued a practice note on issue, offer or invitation of foreign currency-denominated private debt securities.

April

The SC introduced the Guidelines on the Offering of Asset-backed Securities (ABS Guidelines).
September The SC, via a set of answers to frequently-asked questions on the ABS Guidelines, addressed issues pertaining to special purpose vehicles in a securitisation transaction, the approval process, the originator, requirements for assets that may be securitised, true sale requirements, servicer and exchange control matters.

December

The SC announced on behalf of the NBMC further relaxation of some restrictions on the utilisation of proceeds from issuance of private debt securities.
BNM released the Guidelines on Securities Borrowing and Lending (SBL) and the Guidance Notes on Repurchase Agreement (repo) Transactions.
2002
March Malaysian Derivatives Exchange introduced a 5-year MGS futures contract.
October The SC released a consultative paper to seek public comments on proposed revisions to two sets of guidelines: the Guidelines on the Offering of Private Debt Securities (PDS Guidelines) and the Guidelines on the Offering of Asset-backed Securities (ABS Guidelines).
The SC released Guidelines on Dealings in Unlisted Debt Securities by Universal Brokers.
November The NBMC adopted the Report on Asset Securitisation in Malaysia: The Way Forward For The Malaysian Market.
2003
March The Malaysian capital market entered the final phase of its move from a merit-based to a DBR framework for fund-raising. The SC marked this milestone with the release of seven revised fund-raising guidelines, which includes the PDS Guidelines and the ABS Guidelines.
August The SC announced on behalf of the NBMC further relaxation of some restrictions on the utilisation of proceeds from issuance of private debt securities for the construction of hypermarkets.

September

The establishment of a tax neutral framework for securitisation transactions and a 5-year tax deduction on expenses incurred in the issuance of ABS was announced in the Budget 2004.

Malaysian Derivatives Exchange (MDEX) introduced 3-year and 10-year MGS futures contracts.

December The SC announced the release of the Guidelines on the Offering of Structured Products. The introduction of these guidelines will facilitate universal brokers, merchant banks, commercial banks including Islamic banks and performance-guaranteed special purpose vehicles established by any of the abovementioned institutions to issue “structured products” tailored to the needs of sophisticated investors.
2004
July

The SC issued Practice Note 2 on Issue, Offer or Invitation of Ringgit- denominated PDS by a Multilateral Development Bank or Multilateral Financial Institution in Malaysia.

The SC introduced the Guidelines on the Offering of Islamic Securities (IS Guidelines). With the release of the IS Guidelines, the PDS Guidelines no longer apply to the issuance of Islamic securities in Malaysia. However, the SC’s Policies and Guidelines on the Issue/Offer of Securities and Guidelines on the Offering of Asset-backed Securities will continue to apply to Islamic securities, where relevant.
September Budget 2005 announced the removal of witholding taxes on interest income derived from investments by non-residents in all ringgit- denominated bonds and Islamic securities, other than convertible loan stocks. The said exemption is effective from 11 September 2004.
October An Information Note to provide further guidance on issuance of ringgit-denominated bonds in Malaysia by multilateral development banks or multilateral financial institutions was jointly issued by the SC and BNM. This Information Note should be read together with the PDS Guidelines and Practice Note 2
November The SC issued Practice Note 1 and Practice Note 2 to the IS Guidelines, which exempt specific classes of issuers from various requirements of the IS Guidelines. The SC also issued Practice Note 1 to the Guidelines on the Minimum Contents Requirements for Trust Deeds in order to ensure equal applicability of these guidelines to Islamic securities.
2005
March

The SC announced on behalf of the NBMC the repeal of the NBMC Negative List. The NBMC Negative List is repealed in tandem with BNM’s recent relaxation of the banks’ bridging finance lending restrictions. With the repeal of the NBMC Negative List, regulatory parity will be achieved for fund-raising exercises by the private sector.

The SC may still impose new financing restriction from time to time, upon consultation with the NBMC.

An updated Information Note was jointly issued by the SC and BNM to include ringgit-denominated bonds issued in Malaysia by multilateral development banks or multilateral financial institutions as eligible securities to be transacted for re-purchase (repo) operations with the BNM. This Information Note should be read together with the PDS Guidelines and Practice Note 2.

 

April The SC issued Practice Note 3 to the PDS Guidelines, in order to provide a more facilitative framework for the approval of negotiable instruments of deposit (NIDs) with tenure of more than five years.

July

The SC issued Practice Note 1 to the Guidelines on Dealing in Unlisted Debt Securities by a Universal Broker to facilitate cross-selling of unlisted debt securities by dealer’s representatives of both universal brokers (UBs) and eligible non-UBs to their eligible individual customers.

September

Existing income tax deductions for Islamic bonds were extended to encapsulate the new definition of Islamic securities.

The amendment to Schedule 1 of the Securities Commission Act 1993 (SCA), together with the SC’s Guidance Note on the Secondary Trading of Foreign Currency-denominated Debentures and Foreign Currency-denominated Islamic Securities, exempts the requirement to obtain SC’s prior approval pursuant to section 32 of the SCA for secondary trades in foreign currency-denominated debentures and foreign currency-denominated Islamic securities (collectively, “foreign currency-denominated bonds”), provided that such trades are carried out between sophisticated investors.

The SC also released the revised Practice Note 1 to the PDS Guidelines and the revised Practice Note 1 to the IS Guidelines, under which Malaysian public companies who issue foreign currency-denominated bonds are given exemptions if such bond issuances are made only to investors outside Malaysia and/or sophisticated investors in Malaysia.

December The SC issued Practice Note 3 to the IS Guidelines, in order to provide a more facilitative framework for the approval of Islamic negotiable instruments with tenures of more than five years.
2006
January

The SC issued the Guidelines on the Registration of Bond Pricing Agencies to provide for the registration procedures and regulatory requirements that should be met by bond pricing agencies

The SC issued a practice note which details the recognition system for credit rating agencies

April

The SC issued Practice Note 4 to the PDS Guidelines and Practice Note 4 to the IS Guidelines in order to promote the scripless issuance of CP and CP/MTN under a debt programme or an Islamic securities programme

October

The SC issued Practice Note 2B to the PDS Guidelines and IS Guidelines, in order to provide a more facilitative framework for the approval of ringgit-denominated private debt securities and Islamic securities in Malaysia by foreign multinational corporations (MNCs).
2007
March

Specific flexibilities are accorded under the SC’s Practice Note 1A to expedite the issuances of foreign currency-denominated bonds and sukuk in Malaysia. The facilitative regulatory framework represents Malaysia’s continuous efforts to develop the bond market, as well as to enhance Malaysia’s position as an international Islamic financial centre. This Practice Note 1A should be read together with the Joint Information Note released by Bank Negara Malaysia and the SC on the issuance of foreign currency-denominated bonds and sukuk.

2008
January

The SC released Practice Note 1 issued pursuant to the Guidelines on the Offering of Asset Backed Securities. The PN sets out the regulatory and disclosure requirements to be met by principal advisors and originating banks in a primary collateralised loan obligations (CLOs) transaction. These additional disclosure requirements are put in place to enhance transparency and clarity of information to investors and parties involved in a primary CLOs transaction.

December

The SC released Practice Note 5 which is issued pursuant to the Guidelines on the Offering of Islamic Securities and the Guidelines on the Offering of Private Debt Securities to clarify application of these Guidelines on a listing of Islamic securities and debt securities under an exempt regime on Bursa Malaysia. Among others, the Note clarifies that the listing on Bursa Malaysia would not require an additional approval from the SC under section 212(4) of the Capital Markets and Services Act 2007. The Listing Requirements of Bursa Malaysia and a set of frequently asked questions on the listing framework are available on Bursa Malaysia’s website at http://www.bursamalaysia.com

2011

March

The SC issued Guidelines on the Registration of Credit Rating Agencies (Guidelines) to ensure independent and high quality ratings with appropriate oversight of the credit rating agencies (CRAs), given their key role in capital markets. The Guidelines enhance the agencies’ standards in key areas such as transparency of rating criteria and policies, objectivity of rating process, managing conflicts of interest, and will also enable the SC to supervise CRAs in a more vigorous manner. These Guidelines supersede the Practice Note on Recognition of Credit Rating Agencies for the Purpose of Rating Bond Issue, issued by the SC on 25 January 2006.

 

July

The SC issued the revised Private Debt Securities (PDS) Guidelines, Sukuk Guidelines and Trust Deed Guidelines to enhance the regulatory framework for fundraising and product regulation in the Private Debt Securities and Sukuk markets. The revised PDS and Sukuk Guidelines streamline the approval process and time-to-market for the issuance of corporate bonds and sukuk. The revisions also facilitate a more informed investment decision-making process with additional provisions to ensure greater disclosure of relevant information to investors. The revised Sukuk Guidelines provide greater clarity on the application of Shariah rulings and principles endorsed by the SC’s Shariah Advisory Council in relation to Sukuk transactions while the Trust Deed Guidelines improves disclosure standards and protection for corporate bond and sukuk holders. The revised Private Debt Securities Guidelines, Sukuk Guidelines and Trust Deed Guidelines will supersede the Guidelines on the Offering of Private Debt Securities, Guidelines on the Offering of Islamic Securities, Guidelines on the Minimum Contents Requirements for Trust Deeds and all the related Practice Notes respectively.