Further details on capital market initiatives


The Securities Commission (SC) would like to provide further details on the capital market initiatives that were announced by the Yang Amat Berhormat Prime Minister on 22 March 2005, as follows:

i) Flexibilities for stockbroking companies with 1+1 mergers

The following flexibilities will be granted to stockbroking companies that have completed 1 +1 mergers :



  • Allowed to undertake full range of corporate advisory services


Stockbroking companies that have completed 1 +1 mergers will be allowed to undertake the full range of corporate finance services, including making submissions of corporate proposals to the SC on behalf of clients. This is subject to meeting the following criteria:



  • stockbroking companies must have shareholders’ funds of RM100 million; and
  • personnel engaged to undertake corporate finance activities must have the relevant qualifications and experience and be appropriately supervised.

Stockbroking companies making submissions to SC will have to adhere to the SC’s Policies & Guidelines on the Issue/Offer of Securities.


With regards to the primary market activities pertaining to private debt securities, stockbroking companies that have completed 1 +1 merger s shall be permitted to only undertake sub-underwriting and act as an agent for placements subject to compliance with rules, guidelines and requirements imposed by the relevant regulatory authorities.



  • Allowed to operate futures broking activities within stockbroking entity


Stockbroking companies that have completed 1 +1 mergers will be allowed to operate futures broking activities within the stockbroking entity, without having to operate via a subsidiary, subject to:



  • obtaining a futures broker’s licence pursuant to the Futures Industry Act 1993; or
  • merging with its existing futures broking subsidiary.

These stockbroking companies are also required to be admitted as a participant of the derivatives exchange and clearing house.



  • Unrestricted branching in 2006


Stockbroking companies that have completed 1 +1 mergers will be allowed unrestricted branching from 2006 onwards. Currently, they are permitted to set up only up to four additional branches or Electronic Access Facilities with Permitted Activities or Electronic Access Facilities, or a combination thereof.


The relevant guidelines are being rationalised to facilitate the above activities and will be issued by the SC in due course.


ii) Universal Brokers’ access to inter-bank market



Appropriate guidelines governing Universal Brokers’ access to the inter-bank money market will be issued in due course following consultation with Bank Negara Malaysia and industry players.


iii) Next steps for foreign stockbroking and foreign fund management companies that have been allowed to establish operations in Malaysia



Foreign stockbroking and foreign fund management companies that have been allowed to establish operations in Malaysia are required to go through the requisite steps, including applicable licensing requirements, as outlined in the following guidance material available on the SC website at www.sc.com.my :



  • Application for Establishment of Foreign Stockbroking Companies under the Special Scheme
  • Application for Establishment of Foreign Fund Management Companies under the Special Scheme
  • Guidelines for Dealers and Dealer’s Representatives under the Securities Industry Act 1983
  • Guidelines for Fund Managers and Fund Manager’s Representatives under the Securities Industry Act 1983


SECURITIES COMMISSION
25 March 2005