DETAILS OF THE BUDGET 2005 ANNOUNCEMENT ON STRENGTHENING THE CAPITAL MARKET

Following the announcement by Yang Amat Berhormat Prime Minister on measures to further strengthen the capital market, the Securities Commission (SC) would like to provide additional details of these measures as follows:

  1. The SC will issue up to five new licences to foreign stockbrokers
    The SC will issue up to five new licences to enable major foreign stockbrokers to establish operations in Malaysia. These foreign stockbrokers may own 100% equity. They will be allowed to undertake the same range of activities as non-Universal Brokers (non-UBs) and operate from a single location.
    The five foreign stockbrokers may, if they so choose, purchase 100% equity in an existing non-UB which has complied with the consolidation policy.


  2. The SC will issue up to five new licences to foreign fund managers
    The SC will issue up to five new licences to enable leading global fund managers to establish operations in Malaysia. These foreign fund managers will be allowed to own 100% equity and will be allowed to participate in the institutional segment of the Malaysian fund management industry.


  3. 100 per cent foreign ownership in the futures broking industry
    Foreign participants will be allowed to own 100% equity in futures brokers, futures fund managers and futures trading advisers through the issuance of new licences or the purchase of equity in existing operations.


  4. 100 per cent foreign ownership in venture capital industry
    Foreign participants will be allowed to own 100% equity in venture capital and venture capital management corporations.


  5. Four additional branches allowed for local stockbroking companies which have merged with at least one other stockbroking company
    Local stockbroking companies that have complied with the minimum of a 1+1 merger will be allowed to establish four additional branches, electronic access facilities (EAFs) or electronic access facilities with permitted activities (EAFPAs).


  6. No restrictions on the number of foreign dealer representatives
    Restrictions on the employment of foreign dealers by domestic stockbrokers are lifted.

The SC will be releasing guidelines in relation to the above and further details will be posted on the SC website.



SECURITIES COMMISSION
13 September 2004