Kuala Lumpur, 22 September 2015
Amendments to Securities Laws Come Into Force
The Securities Commission Malaysia (SC) today announced the coming into force of the Capital Markets and Services (Amendment) Act 2015 (CMSA) and Securities Commission (Amendment) Act 2015 (SCMA) on 15 September 2015.
The amendments to securities laws were made to facilitate innovative fundraising structures, enhance investor protection, clarify responsibilities of issuers and advisers, and expand the scope of SC’s supervisory powers.
The CMSA Amendment introduced a new recognised market framework to facilitate the establishment of alternative trading platforms, including equity crowdfunding (ECF) platforms. Under this framework, private companies that are hosted on a registered ECF platform are provided a safe harbour from provisions in the Companies Act 1965, which prohibit private companies from offering shares to members of the public. The introduction of ECF is in line with SC’s objective to promote capital market inclusion and widen avenues for capital raising.
To promote a more conducive environment for the issuance and subscription of corporate bonds, the CMSA Amendment has clarified the roles and responsibilities of persons in charge of preparing disclosure documents. A person who is aware of any false or misleading statement in a disclosure document is now required to forthwith inform SC.
Minority shareholder protection in relation to takeovers and mergers transactions is also strengthened where SC is now empowered to appoint an Independent Adviser where the offeree fails to do so.
The CMSA Amendment also seeks to preserve netting provisions of market contracts and strengthen crisis management of market institutions, such as exchanges and clearing houses.
The SCMA Amendments were amended to align securities laws with IOSCO principles. To elevate the standards of auditors and quality of financial statements, the Audit Oversight Board’s regulatory reach is extended to capital market institutions, scheduled funds, and reporting accountants. SC’s examination powers have also been expanded to include persons performing outsourced functions for regulated entities, including branches and subsidiaries.
Click here to view the revised SCMA and CMSA.
SECURITIES COMMISSION MALAYSIA