SC releases practice notes on branching policy and additional activities for Universal Brokers


The Securities Commission (SC) today issued two sets of practice notes in relation to the stockbroking industry branching policy and additional activities for Universal Brokers (UBs).


The two practice notes, developed through extensive consultation with the Association of Stockbroking Companies Malaysia (ASCM) are:



Practice Note 1 – Flexibilities Granted to Stockbroking Companies In Relation to Branch Offices and Branching Policy for the Year-2002 and Beyond aims to explain and clarify the flexibilities granted to stockbroking companies in relation to branch offices as well as set out the branching policy for the stockbroking industry for the year 2002 and beyond.


Under the SC’s policy framework on stockbroking industry consolidation, which was announced in 2000, UBs are allowed free branching from 2002 onwards. In the case of non-UBs (which have undertaken at least 1+1 mergers), each licence surrendered will be converted into a branch office.


To further spur the formation of UBs, the SC’s policy framework on stockbroking industry consolidation also allowed UBs to undertake a broader range of capital market related activities.


In this regard, Practice Note 1 – Clarification on Additional Activities Allowed to be Undertaken by a Universal Broker explains and clarifies the additional activities – namely trading in futures contracts, trading in debt securities, undertaking full-fledged securities fund management, operating a unit trust management company and carrying out corporate finance activities – which UBs have been allowed to undertake.


Both practice notes have been effected and mirrored in the Rules of Kuala Lumpur Stock Exchange and the Malaysia Derivatives Exchange Business Rules.



SECURITIES COMMISSION
19 JULY 2002