Malaysia legislation
Section 5A
Section 5A
(a)
withdraw an approval granted under section 5 to the central depository, with effect from the date specified in the notice; or
(b)
direct the central depository to cease to provide or operate such facilities, or to cease to provide such services, as are specified in the notice, with effect from the date specified in the notice.
(2)
The Minister shall not withdraw an approval or issue a direction under subsection (1) unless the Minister, on the recommendation of the Commission, is satisfied that it is appropriate to do so for the protection of depositors or in the public interest or for the proper regulation of the markets in securities, where any one or more of the following circumstances occur:
(a)
the central depository ceases to operate a system for the central handling of securities;
(b)
the central depository is being wound up or otherwise dissolved, whether in Malaysia or elsewhere;
Securities Industry (Central Depositories) 23
(c)
the central depository has contravened any term or condition of its approval or is charged with any offence under any of the securities laws;
(d)
the central depository has failed to comply with a condition, requirement or direction given under section 61B of this Act or section 11L of the *Securities Industry Act 1983;
(e)
any information provided for the purposes of section 4
was false or misleading in a material particular;
(f)
a judgment debt of the central depository has not been satisfied in whole or in part;
(g)
a receiver, a receiver and manager, or an equivalent person has been appointed, whether in Malaysia or elsewhere, in relation to or in respect of any property of the central depository;
(h)
the central depository has, whether in Malaysia or elsewhere, entered into a compromise or scheme of arrangement with its creditors, being a compromise or scheme of arrangement that is still in operation;
(i)
the central depository on its own accord applies to the
Minister to withdraw the approval granted to it under section 5, and the Minister, on the recommendation of the Commission, deems it fit to do so.
(3)
For the purposes of paragraph (2)(a), a central depository shall be deemed to have ceased to operate a system for the central handling of securities if it has ceased to operate such system for a period of one month unless it has obtained the prior approval of the Minister to do so.
*NOTE—This Act has since been repealed by Capital Market and Services Act 2007 [Act 671]
which comes into operation on 28 September 2007 except Division 2 of Part VI which comes into operation on 1 April 2010–see subsection 381(2) Act 671, P.U. (B) 342/2007 and P.U. (B)
143/2010.
24 Laws of Malaysia ACT 453
(4)
Notwithstanding the withdrawal of an approval or the issuance of a direction under subsection (1), the Minister may permit the central depository to continue, on or after the date on which the withdrawal or direction is to take effect, to carry on such activities affected by the withdrawal or direction as the Minister may specify in the notice published under that subsection for the purposes of—
(a)
closing down the operations of the central depository or ceasing to provide the services specified in the notice; or
(b)
protecting the depositors or the public interest.
(5)
Where the Minister has granted permission to a central depository under subsection (4), the central depository shall not, by reason of its carrying on the activities in accordance with the permission, be regarded as having contravened section 3.
(6)
The Minister shall not take any action under subsection (1)
without giving an opportunity to be heard.
Effect of withdrawal