Asmah Laili Yeon

Law enforcement in Malaysian securities markets

The objective of this paper is to discuss issues of law enforcement in Malaysian Securities Markets.This survey was conducted among 107 principal and representative licensees registered with the Securities Commission of Malaysia.They consist of licensed dealers, investment advisers and fund managers.The majority of the respondents were capital markets and services representative licensees (CMSRL), while only 17 respondents were capital markets and services licensees.On a scale of one to five, respondents were found to be generally satisfied with the roles and responsibilities of enforcement bodies i.e. Securities Commission and Bursa Malaysia (mean of satisfaction = 3.660 to 3.952).The study shows that there is a positive relationship between the views and attitudes of respondents towards the implementation of the legal philosophy by the enforcement bodies (r= .524, r= .480). As the main enforcement agencies, Securities Commission and Bursa Malaysia should further enhance efforts to monitor and enforce the law of capital markets. In conclusion, this paper provides useful information in relation to factors contributing to non compliance of participants of the capital markets. The enforcement bodies can implement measures on how to curb the unethical behaviour by carrying out ethics training and introducing new rules and regulations for the industry.

Non-compliance of licence holders towards disclosure based regulation in Malaysian securities markets

Purpose The purpose of this paper is to examine non-compliance of licence holders towards disclosure-based regulation in Malaysian securities markets in relation to the implementation of the disclosure-based regulation. Design/methodology/approach This survey was conducted among 107 principal and representative licensees registered with the Securities Commission of Malaysia. They consist of licensed dealers, investment advisers and fund managers. The majority of the respondents were capital markets and services representative licensees, while only 17 respondents were capital markets and services licensees. Findings The survey indicates that non-compliance occurs because of lack of ethical values and orientation of the players in the industry. In addition, non-compliance was also reported to occur due to lack of understanding of law and regulations, inefficient company’s surveillance, control and internal monitoring programmes and weaknesses in the implementation and enforcement of law. Other reasons include greed (wanting to be rich quickly), selective application of the law, complicity between offenders and regulators, slow judicial processes and high legal cost for victims to pursue compensation. Practical implications As the enforcement agency, Securities Commission should further enhance efforts to monitor and enforce the law of capital markets. On the other hand, the courts have to impose fines on criminals based on the extent of the losses investors have suffered by investors and on the effects of the crime on market stability. More importantly, ethics training should be carried out to license holders by the relevant bodies and agencies in the securities market. Originality/value This paper provides measures on how to curb the unethical behaviour by carrying out ethics training and introducing new rules and regulations for the industry.

Legal perspective on civil remedies in the Malaysian securities industry

Malaysia’s capital market has performed well in 2009 and this is reflected from the Malaysia’s biggest rise of capital in the form of Maxis Bhd’s RM11.2 billion of initial public offering in 2009. Nevertheless, self-interests may create behaviors that pose risks to the safety of investors and the integrity of markets.Therefore, the Malaysian Securities Commission (SC) implemented a civil action against the offender of securities crimes in order to protect investors and to cover losses faced by investors because of securities crimes. The objective of this paper is to discuss and analyze the law and enforcement of civil action in securities industry in Malaysia.This is a legal research and involved examining legal data such as statutes and court cases.The Capital Markets and Services Act 2007(CMSA 2007) regulate matters relating to the activities, markets and intermediaries in the capital markets.The CMSA 2007 provides provisions relating to civil remedies to the victims of securities crimes and further empowers the SC to enforce administrative and civil actions.The analysis on enforcement of civil actions of SC shows that the outcome of the said strategy is very encouraging and accepted well by the industry player.