Section 5 — SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991

(a)

that the applicant is a company incorporated under the

Companies Act 1965, and an exchange holding company or a stock exchange is a shareholder of the applicant;

(b)

that the rules of the applicant make satisfactory provision—

(i)

with respect to the conditions under which securities may be deposited with, held by, withdrawn from, or transferred within, the central depository;

(ii)

for the holding of securities deposited with the central depository or its nominee company;

(iii)

for the processing of dealings in deposited securities;

(iv)

for facilitating the settlement of deposited securities;

Securities Industry (Central Depositories) 21

(v)

for the protection of the interests of depositors and the protection and control of information on deposited securities and dealings therein;

(vi)

for the monitoring of compliance with, and for the enforcement of, the rules of the central depository;

(vii)

with respect to the maintenance of a policy or policies of insurance, and the establishment and maintenance of compensation funds, for the purpose of settling claims by depositors against the central depository, its nominee companies and authorized depository agents; and

(viii)

generally for the carrying on of the business of the central depository with due regard to the interests of the public; and

(c)

that the establishment and maintenance of the central depository would promote the positive development of the capital market in Malaysia and that the interests of the public dealing with deposited securities (whether or not listed on a stock exchange) will be served by the granting of his approval.

(2)

The Minister may, in approving any application under subsection (1), impose—

(a)

requirements with respect to the paid-up or authorized capital of the central depository;

(b)

conditions relating to the shareholdings of the members of the central depository; and

(c)

any other requirements or conditions as he considers appropriate.

22 Laws of Malaysia ACT 453

(3)

Without limiting the generality of the requirements and conditions specified under subsection (2), the Minister may in writing, on the recommendation of the Commission, amend or revoke any requirement or condition imposed under that subsection or impose new requirements and conditions, if the Minister is satisfied that it is appropriate to do so for the protection of depositors or the public interest or for the proper regulation of the stock market.

Withdrawal of approval of a central depository