THE SECURITIES MARKET IN MALAYSIA

1. Securities Commission

The Securities Commission (SC), a statutory body reporting to the Minister of Finance, was established under the Securities Commission Act 1993. It is responsible for the regulation and development of capital markets in Malaysia through the Securities Commission Act 1993, Capital Markets and Services Act 2007 and Securities Industry (Central Depositories) Act 1991. The SC is a self-funding statutory body with investigative and enforcement powers, and reports to the Minister of Finance.

The SC regulates the offerings and issues of securities by public companies, and debentures by private companies. It also regulates the listing of such securities on Bursa Malaysia, as well as matters relating to take-overs and mergers of companies, and unit trust schemes. It is the sole approving and registering authority for prospectuses of all securities (other than unlisted recreational clubs). The SC has direct responsibility for supervising and monitoring the activities of market institutions, including the exchanges and clearing houses, and regulating all persons licensed under the Capital Markets and Services Act 2007.

The SC introduced the Capital Market Masterplan (CMP) in 2001. This is a comprehensive plan that charts the strategic positioning and future direction of the Malaysian capital market for the next 10 years. The Masterplan prioritises the immediate needs of the capital market and charts its direction and long-term growth in anticipation of global developments to its environment. Visit the SC website at http:www.sc.com.my for more information on the SC and the CMP.

2. Bursa Malaysia Berhad

Bursa Malaysia Berhad (Bursa Malaysia) is an exchange holding company, listed on the Main Board of Bursa Malaysia Securities on 18 March 2005 . Bursa Malaysia operates a securities, derivatives and offshore exchanges, clearing houses for securities and derivatives and a central depository. The company also disseminates stock quotes and information related to securities listed on the exchange. The securities exchange, established in 1973, provides a central market place for buyers and sellers to transact business in the shares, warrants, fixed income securities and various other securities of listed companies. Diversity of products also includes options and futures derivatives contracts and multi-currency off-shore instruments, traded on the derivatives exchange and offshore exchange, respectively.

Bursa Malaysia today is one of the largest bourses in Asia with almost 1,000 listed companies offering a wide range of investment choices to the world. Companies are either listed on Bursa Malaysia Securities Main Board for larger capitalised companies, the Second Board for medium sized companies or the MESDAQ Market for high growth and technology companies.
In assisting the development of the Malaysian capital market and enhancing global competitiveness, Bursa Malaysia is committed to maintaining an efficient, secure and active trading market for local and global investors.

(i) Market Participants

a) Stockbroking Companies
Currently, there are 34 stock broking companies (including five foreign brokers) offering services in the dealing of securities listed on Bursa Securities. Of these, 13 are categorised as Investment Banks. Investment banks hold merchant banking license issued by Bank Negara Malaysia under the Banking and Financial Institutions Act 1989 (BAFIA) as well as Capital Markets Services license issued by the Securities Commission under the Capital Markets & Services Act 2007. As such, investment banks are able to offer a full scope of integrated capital market and financial services which include corporate finance, debt securities trading and dealing in securities. One stock broking company still holds the universal broker status. A u niversal brokers is able to offer integrated capital market services.
As at the end of 2007, there were 146 branches.

b) Trading Participants
A Trading Participant is a company which owns at least one Preference Share of Bursa Malaysia Derivatives to conduct business as a futures broker licensed by the Securities Commission under the Capital Markets and Services Act 2007 and carries on trading in Contracts traded on the Bursa Malaysia Derivatives. Currently, there are 18 Trading Participants.

(ii) Investor Protection

In the interest of protecting investors, Bursa Malaysia currently maintains three compensation funds, namely Compensation Fund of Bursa Securities, the Fidelity Fund of Bursa Derivatives and the Compensation Fund of Bursa Depository to compensate investors who have suffered losses falling within the circumstances specified under the relevant securities laws and rules. The funds are administered by the Compensation Committee.

(iii) Risk Management

Bursa Malaysia 's enterprise risk management (ERM) framework, through the supervision of the Risk Management Committee (RMC) is aimed at managing and controlling risks appropriately for the Group. Key risks are identified and ranked for likelihood of occurrence and magnitude of impact while the appropriate action plans are developed to manage significant residual risks.

source: http://www.mida.gov.my/en/view.php?cat=3&scat=30&pg=159