245 Divisions in SC

Divisions in SC

The SC has a few divisions, namely:

1. Strategy and development

This division is the forefront in setting up policies to regulate the market and make recommendations for any legislative and regulatory reforms for the purpose of market integrity. To achieve the other objectives, this division initiates and facilitates the development of new products for the capital market. In line with the state agenda towards a competitive market and efficiency, it develops and implements information systems to support SC’s objectives and operations. Accordingly, in pursuit of the Capital Market Master Plan, this division is also responsible to facilitate the development of the Islamic Capital Market in Malaysia. In the event investors require assistance in the recovery of ownership of their shares which have been deposited into the Minister of Finance securities account, this division assists these investors.

Section 159 of the Securities Commission (Amendment) Act 1993 grants SC the power to make regulations. This division conducts research on global issues in the securities market and also supports and facilitates the goals under the Capital Market Master Plan. It also conducts consultation briefing meetings with industry and professional bodies should there be any proposed new regulatory reforms. A corporation could address its concerns and issues at industry level within this division.

2. Market supervision division

This division monitors and detects irregularities in trading patterns that may breach trading rules or legal requirements. It has the delegated power to assess, appraise and audit market institutions, brokers, dealers and other intermediaries. In market supervision, integrity in the system is part of the integrity of the market. Therefore, the market supervision division handles licensing applications for brokers, advisers and their representatives as well as applications for licences by fund management and asset management companies. This division also formulates licensing policies to cater to changes in societal investors’ expectation and on expected delivery in the delivery system of policing brokers.

3. Enforcement division

This division comprises the following departments:

a. Financial Reporting Surveillance and Compliance Department.,

b. Investigation Department.

c. Prosecution Department and Complaints Unit.

Although SC is a self-funding entity and a corporation, it has policing powers and is granted wide investigation powers under the Securities Commission (Amendment) Act 1993. It also has the power to enter building by force, if necessary (Section 133). Its policing powers include the power to call for examination (Section 134) and the power to seek surrender of documents (Section 132).

Financial reporting to investors is the essence of investors’ confidence as informed investors. A disclosure based regulation in a market based economy requires integrity in financial reporting that is in line with standards required. This division ensures financial reporting complies with the standards required. It also investigates possible contravention of securities laws, conducts prosecution of securities offences, initiates administrative hearings and carries out disciplinary proceedings against licensed persons and handles public complaints on improper conduct and other irregularities in the securities and futures industries.


4. Corporate finance and investment division

This division comprises the following departments:

a. Takeover and Mergers Department.

b. Trust and Investment Management Department.

c. Asset Valuation Audit Department.

This division regulates the issue, offer and/or listing of securities, regulates the takeovers and mergers of companies, regulates unit trusts and other collective investment schemes and examines all asset valuations that form part of corporate proposals.

Its Takeover and Mergers Department will review offer documentations, comprising clearance of disclosure in offer documents and Independent Advice Circulars (IACs), and processes applications under the equity requirement for public companies.

In processing applications, it assesses the equity structure of offerees to ensure that their structure subsequent to the take-over offer complies with the requirements of the National Development Policy (NDP). It also ensures that any conditions imposed in relation to the equity structure of the offeree shall be disclosed in the offer documents.

To facilitate a cooperative timely delivery of regulatory approval, a corporation is advised to submit draft offer documents and applications to this division within 4 days after the offerors’ take-over offer announcements. The division is to complete its review of the offer document within 16 days to allow time for printing. Above all, the dispatch of the offer documents to offeree shareholders will have to be done within 21 days from take-over offer announcements. The IACs will be dispatched within 10 days subsequent to the dispatch of the offer documents.

Its Trust and Investment Management grants approval of the establishment of unit trust schemes including approval of the management company and the trustee. If the disclosure on the fund’s information is satisfactory, it will register the prospectus and deed of the fund within 21 calendar days (excluding public holidays) from the date of submission. It also monitors the eligibility criteria of the management company, in particular the Bumiputra and foreign participation, in accordance with the National Development Policy requirement. Certain functions of the management company are delegated in relation to the proposed fund. The management company must ensure that the delegation of functions complies with the Guiding Principles for Outsourcing of Back Office Functions for Capital Market Intermediaries.


5. Corporate resources division

This division comprises the following departments:

a. Finance and Accounts Department.

b. Human Resources Department.

c. Administration and Property Department.

d. Security Department.

e. New Building Project Unit.

It handles the payroll, placing and monitoring of investments, cash management, tax and budget. It keeps the SC staff developed to meet the increasingly challenging demands of the work of the SC. It looks into the maintenance of office premises and assets as well as the provision of supplies and services. It also monitors the design and construction of the SC building and its maintenance.

6. Islamic capital market

This division carries out research and development activities including formulating and facilitating a long-term plan to further strengthen the ICM in Malaysia. It works closely with the Syariah Advisory Council which was established to advice the SC on Shariah matters pertaining to the ICM.

It also looks into compliance of capital market products that represents Shariah-complaint securities, and develops ICM products; of which under SC, the list to date are Shariah-compliant securities, sukuk, Islamic unit trusts, Shariah indices, warrants (TSR), call warrants and crude palm oil futures contract.



BCS 202/05 Corporate Compliance Management Copyright © 2011 by Wawasan Open University. All Rights Reserved.


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