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Amendment Act · As enacted

Securities Commission (Amendment) Act 2015

Feedback & supportAmends the Securities Commission Act 1993

Official textFrom Laws of Malaysia Online, unchanged

s 1Short title and commencement

(1)

This Act may be cited as the Securities Commission

(Amendment) Act 2015.

(2)

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette, and the Minister may appoint different dates for the coming into operation of—

(a)

different provisions of this Act; or

(b)

all or different provisions of this Act in respect of different classes or categories of persons or capital market products, including Islamic capital market products.

s 2General amendment

The Securities Commission Act 1993 [Act 498], which is referred to as the “principal Act” in this Act, is amended by inserting after the words “Securities Commission” wherever appearing the word “Malaysia” including in the long title, short title, Parts and shoulder notes of the principal Act.

securities commission (Amendment)

act 2015

s 3Change in reference to short title of principal Act

All references to the Securities Commission Act 1993 in any written law or document shall, when this Act comes into operation, be construed as references to the Securities Commission Malaysia

Act 1993.

s 4Change of name of Commission

The Securities Commission established under section 3 of the principal Act shall, when this Act comes into operation, be known as the “Securities Commission Malaysia”.

s 5Amendment of section 2

Subsection 2(1) of the principal Act is amended—

(a)

by inserting after the definition of “Audit Oversight

Board” the following definition:

‘ “Bank Negara Malaysia” means the Central Bank of Malaysia established under the Central Bank of

Malaysia Act 2009 [Act 701];’;

(b)

by inserting after the definition of “Court” the following definition:

‘ “dealing in derivatives” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(c)

by substituting for the definition of “document” the following definition:

‘ “document” has the meaning assigned to it in the

Evidence Act 1950 [Act 56];’;

(d)

by inserting after the definition of “private retirement scheme” the following definition:

‘ “public interest entity” means the entity specified in Part 1 of Schedule 1;’;

Securities Commission (Amendment)

(e)

by deleting the definition of “committee”;

(f)

by inserting after the definition of “Board” the following definition:

‘ “Board committee” means any committee established by the Board under section 18;’;

(g)

by inserting after the definition of “record” the following definition:

‘ “schedule fund” means the funds specified in Part 2 of Schedule 1;’;

(h)

by inserting after the definition of “books” the following definition:

‘ “Board” means the Board established under section 4;’;

(i)

in the definition of “Shariah Advisory Council”, by substituting for the words “the Capital Markets and

Services Act 2007” the words “section 31zi”;

(j)

by inserting after the definition of “securities laws” the following definition:

‘ “self-regulatory organization” has the meaning assigned to it in the Capital Markets and Services

Act 2007;’;

(k)

by inserting after the definition of “public interest entity”

the following definition:

‘ “recognized market” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(l)

by inserting after the definition of “Board committee”

the following definition:

‘ “capital market” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(m)

by substituting for the definition of “officer” the following definition:

‘ “officer”, in relation to—

(a)

the Commission, means any officer employed under section 20 and includes an Investigating Officer of the Commission appointed under section 125; and

(b)

a corporation, has the meaning assigned to it in the Companies Act 1965;’;

(n)

by substituting for the definition of “prescribed investment”

the following definition:

‘ “prescribed investment” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(o)

by substituting for the definition of “director” the following definition:

‘ “director” has the meaning assigned to it in the

Capital Markets and Services Act 2007;’;

(p)

in the definition of “Chairman”, by substituting for the words “paragraph 4(1)(a)” the words “paragraph 4(2)

(a)

”;

(q)

by substituting for the definition of “corporation” the following definition:

‘ “corporation” has the meaning assigned to it in the Companies Act 1965;’;

(r)

by inserting after the definition of “capital market” the following definition:

‘ “capital market products” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(s)

by inserting after the definition of “Islamic capital market business or transaction” the following definition:

‘ “Islamic capital market product” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

Securities Commission (Amendment)

(t)

by substituting for the definition of “clearing house” the following definition:

‘ “clearing house” means a clearing house approved under the Capital Markets and Services Act 2007;’;

(u)

by substituting for the definition of “record” the following definition:

‘ “record” includes information stored or recorded by means of a computer, electronic or digital medium or any other means of storage or recording;’;

(v)

by inserting after the definition of “specify” the following definition:

‘ “trade repository” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(w)

by substituting for the definition of “prescribed investment scheme” the following definition:

‘ “prescribed investment scheme” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(x)

by inserting after the definition of “prescribed investment scheme” the following definition:

‘ “private retirement scheme” has the meaning assigned to it in the Capital Markets and Services

Act 2007;’;

(y)

by substituting for the definition of “unit trust scheme”

the following definition:

‘ “unit trust scheme” has the meaning assigned to it in the Capital Markets and Services Act 2007;’;

(z)

by substituting for the definition of “company” the following definition:

‘ “company” has the meaning assigned to it in the

Companies Act 1965 [Act 125];’;

(aa)

in the definition of “Deputy Chief Executive”, by substituting for the words “paragraph 4(1)(aa)” the words

“paragraph 4(2)(b)”;

(bb)

by substituting for the definition of “securities laws” the following definition:

‘ “securities laws” means—

(a)

this Act;

(b)

the Capital Markets and Services Act 2007;

(c)

the Securities Industry (Central Depositories)

Act 1991 [Act 453];

(d)

any other legislation which the Commission is empowered to administer or enforce; and

(e)

any other regulations, rules, orders, notifications or other subsidiary legislation made under paragraphs (a), (b), (c) and (d);’; and

(cc)

by inserting after the definition of “Fund” the following definitions:

‘ “Islamic capital market business or transaction”

means—

(a)

the business of carrying any regulated activity;

(b)

any proposal, scheme, transaction, arrangement, activity or matter relating to any capital market product, or under Part IIIA or Part VI of the

Capital Markets and Services Act 2007;

(c)

any transaction relating to a derivative; or

(d)

the establishing, operating or maintaining of a securities market or a derivatives market, which is consistent with the principles of Shariah as may be determined by the Shariah Advisory Council;’.

Securities Commission (Amendment)

s 6Amendment of section 2a

Section 2a of the principal Act is amended—

(a)

in the shoulder note, by deleting the words ‘and “securities law” ’;

(b)

by substituting for the words ‘Any reference in this Act to “this Act” or a “securities law” ’ the words ‘Any reference in this Act to “this Act” ’; and

(c)

by substituting for the words “subsidiary legislation made under this Act or a securities law, as the case may be” the words “subsidiary legislation made under this Act”.

s 7Amendment of section 2g

Section 2g of the principal Act is amended by substituting for subsection (1) the following subsection:

“(1) Where under any of the provisions of the securities laws, power is given to the Commission—

(a)

to inspect and make copies of or take extracts from any book required under any of the provisions of the securities laws to be kept or maintained; or

(b)

to require any person, or where any person is required under the securities laws, to submit to the Commission any information, document or book, the Commission shall have access to the same and may—

(A)

require that the same be submitted within such period, at such intervals, in such manner, in such form, and in writing or by means of any visual recording, whether of still or moving images, or sound recording, or any electronic, magnetic, mechanical or other recording whatsoever, on any substance, material, thing or article, as the Commission may set out in the specification;

(B)

obtain clear reproductions in writing; or

(C)

copy or move it to a storage or recording device.”.

s 8Substitution of section 4

The principal Act is amended by substituting for section 4

the following section:

“Board of Commission

(1)

There shall be a Board of the Commission.

(2)

The Board shall consist of the following members who shall be appointed by the Minister:

(a)

a Chairman;

(b)

a Deputy Chief Executive; and

(c)

seven other members, who may include persons representing the government and private sector.

(3)

The Board shall—

(a)

be responsible for monitoring the overall governance of the Commission;

(b)

be responsible for reviewing and approving the strategic plan and budget of the Commission;

(c)

be responsible for reviewing and adopting appropriate systems and controls to manage the enterprise risks of the Commission;

(d)

have oversight of the affairs and business of the

Commission and keep under constant review the performance of the Commission in giving effect to its objects, carrying out its functions and the use of the financial resources of the Commission; and

(e)

be responsible for such other matters as may be provided under the securities laws.

(4)

A member of the Board shall at all times act honestly and in the best interest of the Commission and use reasonable diligence in the discharge of his functions.

Securities Commission (Amendment)

(5)

A member of the Board shall not make improper use of any information acquired or exercise any improper influence by virtue of his position to gain directly or indirectly an advantage for himself or for any other person.”.

s 9New sections 4a and 4b

The principal Act is amended by inserting after section 4 the following sections:

“Appointment of members of Board 4a. (1) A person to be appointed as the Chairman or the

Deputy Chief Executive under section 4 shall be a person of integrity and impeccable reputation with proven experience and recognized knowledge in the financial or capital markets.

(2)

The Minister, in appointing other members of the

Board under subsection 4(2), shall have regard to—

(a)

diversity of the Board members in terms of interest, knowledge, skills and experience; and

(b)

the person’s probity and standing and his knowledge, skills and experience in law, economics, finance, accounting or in any other relevant discipline, which will enable him to discharge his functions as a member of the Board.

Chairman and Deputy Chief Executive 4b. (1) The Chairman shall be entrusted with the day-to-day administration and management of the Commission and may, unless otherwise provided under the securities laws or any other written law, exercise all powers and do all acts which may be exercised or done by the Commission under the securities laws or any other written law.

(2)

During the absence of the Chairman or inability of the Chairman to act due to any cause, the Deputy Chief

Executive shall carry out the functions of the Chairman.

(3)

For the purposes of subsection (2), in the case where the Deputy Chief Executive is absent or unable to act due to any cause, a senior member of management of the Commission designated by the Board shall carry out the functions of the

Chairman.

(4)

Notwithstanding subsection (1), the Chairman may bring any matter in relation to the Commission’s functions to the Board for deliberation or direction, where he deems it necessary.”.

s 10Substitution of section 5

The principal Act is amended by substituting for section 5

the following section:

“Disqualification of Board members

(1)

No person shall be appointed to be or remain as a member of the Board if he—

(a)

is or becomes a full-time officer in any public listed company;

(b)

is or becomes an officer or a director of an entity that is licensed, registered, recognized or approved under the securities laws;

(c)

is or becomes a member of the Senate or House of

Representatives or any Legislative Assembly;

(d)

is convicted of a criminal offence involving fraud, dishonesty, corruption or violence;

(e)

is or becomes a bankrupt or suspends payment or compounds with his creditors; or

(f)

is or becomes involved in any activity which may interfere with his independence in discharging his functions.

(2)

The prohibition in paragraph (1)(a) shall not apply to a member of the Board who is from the Ministry that is charged with the responsibility for finance.”.

Securities Commission (Amendment)

s 11Substitution of section 6

The principal Act is amended by substituting for section 6

the following section:

“Tenure of office

(1)

The Chairman shall be appointed for a term of three years and shall be eligible for reappointment for the same term.

(2)

The Deputy Chief Executive and any other member of the Board shall be appointed for a term of two years and shall be eligible for reappointment for the same term.”.

s 12Substitution of section 7

The principal Act is amended by substituting for section 7

the following section:

“Resignation

A member of the Board may, at any time, resign his office by giving notice in writing to the Minister.”.

s 13Substitution of section 8

The principal Act is amended by substituting for section 8

the following section:

“Revocation of appointment

The Minister may, at any time, revoke the appointment of a member of the Board if the member—

(a)

becomes of unsound mind or otherwise becomes incapable of discharging his functions;

(b)

is absent from three consecutive meetings of the Board, in the case of the Chairman, without leave of the

Minister and in the case of the Deputy Chief Executive or other members of the Board, without leave of the

Chairman;

(c)

conducts himself in such a way as to bring disrepute to the Commission;

(d)

fails to comply with his obligations under section 13;

(e)

is disqualified under section 5.”.

s 14Amendment of section 9

Section 9 of the principal Act is amended by substituting for the word “Commission” wherever appearing the word “Board”.

s 15Amendment of section 10

Section 10 of the principal Act is amended—

(a)

by substituting for the word “Commission” wherever appearing the word “Board”; and

(b)

by inserting after subsection (1) the following subsection:

“(1a) The Chairman shall preside at all meetings of the Board.”.

s 16Substitution of section 11

The principal Act is amended by substituting for section 11

the following section:

11.

“Board may invite others to meeting

The Board may invite any person to attend any meeting or deliberation of the Board for the purpose of advising the

Board on any matter under discussion, but the person so invited shall not be entitled to vote at the said meeting or deliberation.”.

Securities Commission (Amendment)

s 17Amendment of section 13

Section 13 of the principal Act is amended—

(a)

by substituting for subsection (1) the following subsection:

“(1) A member of the Board or any member of the Board committee who has or acquires a direct or indirect interest in relation to any matter under discussion by the Board or Board committee shall disclose to the Board or Board committee, as the case may be, the existence of his interest and the nature of that interest.”;

(b)

in subsection (3), by substituting for the words “Commission or committee” wherever appearing the words “Board or

Board committee”;

(c)

in subsection (4), by substituting for the words “Commission or committee” wherever appearing the words “Board or

Board committee”; and

(d)

in subsection (5), by substituting for the words “Commission or committee” wherever appearing the words “Board or

Board committee”.

s 18Amendment of section 14

Section 14 of the principal Act is amended—

(a)

in subsection (1), by substituting for the words “Commission or committee” the words “Board or Board committee”;

and

(b)

by substituting for subsection (2) the following subsection:

“(2) Every meeting of the Board or Board committee in respect of the proceedings of which minutes have been so made shall be deemed to have been duly convened and held and all members thereat to have been duly qualified to act.”.

s 19Amendment of section 15

Section 15 of the principal Act is amended—

(a)

in paragraph (a), by substituting for the words “securities and derivatives industries” the words “the capital market”;

(b)

in paragraph (b), by substituting for the words “securities and derivatives” the words “the capital market”;

(c)

in paragraph (e), by inserting after the words “unit trust schemes” the words “and private retirement schemes”;

(d)

in paragraph (f), by substituting for the words “exchange holding company, exchange” the words “exchange holding company, stock exchange, derivatives exchange”;

(e)

in paragraph (g), by substituting for the words “securities and derivatives markets” the words “capital market”;

(f)

in paragraph (i)—

(i)

by substituting for the words “dealings in securities and dealing in derivatives” the words “the capital market”; and

(ii)

by substituting for the words “securities or derivatives” the words “the capital market”;

(g)

in paragraph (j), by substituting for the words “law relating to securities and derivatives” the words “securities laws”;

(h)

in paragraph (k), by substituting for the words “securities and derivatives markets” the words “the capital market”;

(i)

in paragraph (l), by substituting for the words “market bodies in the securities and derivatives industries” the words “market institutions in the capital market”;

(j)

in paragraph (m), by substituting for the words “authorize and supervise” the words “authorize, approve and supervise”;

Securities Commission (Amendment)

(k)

in paragraph (n), by substituting for the words “in the securities and derivatives industries” the words “, registered persons, approved persons and participants in the capital market”;

(l)

by substituting for paragraph (o) the following paragraph:

“(o) to register or recognize all auditors of public interest entities or schedule funds for the purposes of this Act, and to exercise oversight over any person who prepares a report in relation to financial information of public interest entities or schedule funds, in relation to capital market activities;”;

(m)

by inserting after paragraph (o) the following paragraph:

“(oa) to promote confidence in the quality and reliability of audited financial statements in Malaysia, and to promote and develop an effective and robust audit oversight framework in Malaysia;”;

(n)

in paragraph (p), by substituting for the words “securities and derivatives markets” the words “capital market”;

and

(o)

in paragraph (r), by substituting for the words “ securities and derivatives markets;” the words “capital market.”.

s 20Amendment of section 17

Section 17 of the principal Act is amended—

(a)

by substituting for the shoulder note the following shoulder note:

“Delegation of Board’s and Chairman’s functions”;

(b)

by substituting for subsection (1) the following subsection:

“(1) The Board may delegate any of its functions to—

(a)

any of the members of the Board;

(b)

any Board committee established by the Board;

(c)

any officer of the Commission.”;

(c)

by inserting after subsection (1) the following subsection:

“(1a) The Chairman may delegate any of his functions to—

(a)

any committee established by the Chairman;

(b)

any officer of the Commission.”; and

(d)

in subsection (2), by substituting for the word “Commission”

the words “Board or Chairman”.

s 21Amendment of section 18

Section 18 of the principal Act is amended—

(a)

in the shoulder note, by substituting for the words

“Commission may establish” the word “Board”;

(b)

in subsection (1), by substituting for the words “The

Commission may establish such committee as it considers necessary or expedient to assist it” the words “The

Board may establish such committee, in any form and by whatever name called, as the Board considers fit or necessary to assist the Board”;

(c)

by substituting for subsection (2) the following subsection:

“(2) A Board committee established under subsection (1)

may comprise—

(a)

any Board member; and

(b)

any other person, as may be appointed by the Board.”;

Securities Commission (Amendment)

(d)

by inserting after subsection (2) the following subsections:

“(2a) In appointing a person under paragraph (2)(b), the Board shall have regard to the person’s integrity, reputation, knowledge, skills and experience, which will enable him to discharge his functions as a member of the Board committee.

(2b)

The functions of a Board committee established under subsection (1) shall be determined by the Board.”;

and

(e)

by deleting subsections (3), (4), (5), (6) and (7).

s 22New section 18a

The principal Act is amended by inserting after section 18

the following section:

“Procedures of Board committee 18a. (1) The Board committee may elect any of its members to be the chairman and may regulate its own procedure and, in the exercise of its powers under this subsection, such committee shall be subject to and act in accordance with any direction given to the Board committee by the Board.

(2)

Meetings of the Board committee established under section 18 shall be held at such time, place and in such manner as the chairman of the Board committee may, subject to subsection (1), determine.

(3)

The Board committee may invite any person to attend any meeting of the Board committee for the purpose of advising the Board committee on any matter under discussion but the person so invited shall not be entitled to vote at any such meeting.

(4)

The members of the Board committee or any person invited to attend any meeting of the Board committee may be paid such allowances and other expenses as the Board may determine.”.

s 23Amendment of section 20

Section 20 of the principal Act is amended—

(a)

in the shoulder note, by deleting the words “and servants”;

and

(b)

in subsection (2), by deleting the words “and servants”.

s 24Substitution of section 21

The principal Act is amended by substituting for section 21

the following section:

21.

“Commission may issue policies on discipline and ethical behaviour

The Commission may, from time to time, issue policies with respect to discipline and ethical behaviour, by whatever name called or in any form, for officers of the Commission or any business stakeholders dealing with the Commission.”.

s 25Amendment of section 22

Section 22 of the principal Act is amended—

(a)

in the shoulder note, by deleting the words “and servants”;

(b)

in subsection (1), by deleting the words “and servants”;

and

(c)

in subsection (2), by deleting the words “and servants”.

s 26Substitution of section 22a

The principal Act is amended by substituting for section 22a the following section:

“Commission may establish or participate in body corporate 22a. (1) The Commission may, with the approval of the

Minister, establish or participate in any body corporate for

Securities Commission (Amendment)

the purpose of promoting research and training in relation to the capital market, or for the purpose of carrying out its functions under this Act.

(2)

The Commission may—

(a)

receive a grant or donation;

(b)

make a grant or donation; or

(c)

provide any other form of assistance, for the establishment or operations of the body corporate under subsection (1).

(3)

Monies received under paragraph (2)(a) shall be kept in a designated trust account.

(4)

The Commission shall disburse the monies in the designated trust account to the person entitled in accordance with the purpose for which the monies were received by the

Commission.

(5)

Where the Commission establishes a body corporate under subsection (1), the Commission may take any action or do all such things as may be necessary or expedient for—

(a)

the interest of the public or for the protection of investors;

(b)

the effective administration of the securities laws; or

(c)

ensuring compliance with any conditions or restrictions as imposed on the body corporate under the securities laws.”.

s 27Amendment of section 23

Subsection 23(2) of the principal Act is amended—

(a)

in paragraph (d), by deleting the word “and” at the end of the paragraph;

(b)

in paragraph (e), by substituting for the full-stop at the end of the paragraph the words “; and”; and

(c)

by inserting after paragraph (e) the following paragraph:

“(f) all other monies lawfully received by the

Commission.”.

s 28Amendment of section 24

Section 24 of the principal Act is amended—

(a)

in subsection (2a), by substituting for the words “an electronic facility registered” the words “a recognized market”; and

(b)

in subsection (3), by inserting after the word “exchanges”

the words “or the operator of a recognized market, as the case may be,”.

s 29Amendment of section 26

Section 26 of the principal Act is amended—

(a)

in paragraph (a), by substituting for the word “servants”

the word “agents”; and

(b)

by substituting for paragraph (e) the following paragraph:

“(e) generally, making any payment or grant for carrying into effect the provisions of the securities laws.”.

s 30Amendment of section 29

Subsection 29(3) of the principal Act is amended by substituting for the word “possible” the word “practicable”.

Securities Commission (Amendment)

s 31Amendment of section 30

Section 30 of the principal Act is amended by substituting for the words “The Commission may from time to time, with the approval of the Minister, borrow,” the words “The Minister may, on the recommendation of the Board, approve for the Commission to borrow,”.

s 32Amendment of section 31a

Section 31a of the principal Act is amended—

(a)

by deleting the definition of “public interest entity”;

(b)

in the definition of “auditor”, by inserting after the words

“public interest entity” the words “or schedule fund”;

(c)

in the definition of “registered auditor”, by inserting after the words “public interest entity” the words “or schedule fund”;

(d)

in the definition of “recognised auditor”, by inserting after the words “public interest entity” the words “or schedule fund”; and

(e)

by inserting after the definition of “auditor” the following definition:

‘ “executive chairman” refers to the executive chairman of the Audit Oversight Board appointed under section 31c;’.

s 33Amendment of section 31b

Section 31b of the principal Act is amended—

(a)

by substituting for the words “relating to audit oversight”

the words “for the purposes of Part IIIA”;

(b)

in paragraph (b), by deleting the word “and” at the end of the paragraph;

(c)

in paragraph (c), by substituting for the words “public interest entities.” the words “public interest entities or schedule funds; and”; and

(d)

by inserting after paragraph (c) the following paragraph:

“(d) to exercise oversight over any person who prepares a report in relation to financial information of public interest entities or schedule funds, in relation to capital market activities, as may be required to be prepared under the securities laws or guidelines issued by the Commission.”.

s 34Amendment of section 31c

Section 31c of the principal Act is amended—

(a)

in subsection (1), by inserting after the words “section 31b” the words “relating to audit oversight”;

(b)

in subsection (2), by substituting for the word “Commission”

the word “Board”;

(c)

in subsection (3)—

(i)

by substituting for the word “Commission” the word “Board”; and

(ii)

in paragraph (c), by inserting after the words

“public interest entities” the words “or schedule funds”; and

(d)

in subsection (4)—

(i)

by deleting the words “shall serve on a full-time basis and” after the words “executive chairman”;

and

(ii)

in paragraph (b), by inserting after the words

“public interest entity” the words “or schedule fund”.

Securities Commission (Amendment)

s 35Amendment of section 31d

Section 31d of the principal Act is amended by deleting subsection (2).

s 36Amendment of section 31e

Subsection 31e(1) of the principal Act is amended—

(a)

by deleting the words “under section 31b,”;

(b)

in paragraph (b), by inserting after the words “public interest entities” the words “or schedule funds”;

(c)

in paragraph (f), by inserting after the words “public interest entities” the words “or schedule funds”;

(d)

in paragraph (g), by deleting the word “and” at the end of the paragraph; and

(e)

by inserting after paragraph (g) the following paragraph:

“(ga) to carry out inspection on persons specified under paragraph 31b(d); and”.

Read on from s 37