Front Matter Page
© 2013 International Monetary Fund
March 2013
IMF Country Report No. 13/59
Malaysia: Publication of Financial Sector Assessment Program Documentation—Detailed Assessment of Implementation of IOSCO Objectives and Principles of Securities Regulation
This Detailed Assessment of Implementation of IOSCO Objectives and Principles of Securities Regulation in Malaysia was prepared by staff of the International Monetary Fund and the World Bank as background documentation for the periodic consultation with the member country. It is based on the information available following the FSAP discussions that ended on September 7, 2012, with the officials of Malaysia. Based on the information available at the time of these discussions, the assessment was completed in February 2013. The related ROSC was published together with the FSSA on February 28, 2013. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Malaysia or the Executive Board of the IMF.
The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information.
Copies of this report are available to the public from
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International Monetary Fund
Washington, D.C.
Front Matter Page
Financial Sector Assessment Program
Malaysia
IOSCO Objectives and Principles of Securities Regulation
Detailed Assessment of Implementation
February 2013
International Monetary Fund
Monetary and Capital Markets Department
The World Bank
Financial and Private Sector Development
Vice-Presidency
East Asia And Pacific Region Vice-Presidency
Contents
Glossary
I. Summary, Key Findings, and Recommendations
A. Introduction
B. Institutional and Market Structure—Overview
C. Preconditions for Effective Securities Regulation
D. Recommended Action Plan and Authorities’ Response
II. Detailed Assessment
Tables
1. Summary Implementation of the IOSCO Principles—Detailed Assessments
2. Recommended Action Plan to Improve Implementation of the IOSCO Principles
3. Detailed Assessment of Implementation of the IOSCO Principles
Glossary
ABS |
Asset-Backed Securities |
AML |
Anti-Money Laundering |
AMLATFA |
Anti-Money Laundering and Terrorist Financing Act (2001) |
ANC |
Adjusted Net Capital |
AOB |
Audit Oversight Board |
ARAMIS |
Automated Real time Alerts for Market Intelligent Supervision (Bursa Malaysia Market Surveillance System) |
ARMADA |
Automated Risk Management and Decision Making Analysis System |
BAFIA |
Banking and Financial Institutions Act 1989 |
BNM |
Bank Negara Malaysia (Malaysian Central Bank) |
BPA |
Bond Pricing Agency |
BTS |
Bursa Trade Securities (Bursa Malaysia Securities Trading System) |
Bursa Malaysia |
Bursa Malaysia Berhad (Malaysian Exchange Holding Company) |
CAR |
Capital Adequacy Ratio |
CBA |
Central Bank of Malaysia Act 2009 |
CG Code |
Malaysian Corporate Governance Code (for publicly listed companies) |
CIS |
Collective Investment Scheme |
CMDF |
Capital Markets Development Fund |
CME |
Chicago Mercantile Exchange |
CMP1 |
Capital Market Masterplan 1 (2001–2010) |
CMP2 |
Capital Market Masterplan 2 (2011–2020) |
CMSA |
Capital Markets & Services Act, 2007 (as amended) |
CMSL |
Capital Market Services License |
CMSRL |
Capital Markets Services Representative License |
CP |
Clearing Participant (at the derivatives clearing house) |
CPO |
Crude Palm Oil |
CRA |
Credit Rating Agency |
CUTA |
Corporate Unit Trust Adviser (sells unit trusts and provides financial planning) |
ED |
Executive Director (of the SC) |
ETF |
Exchange Traded Funds |
ETP Bond |
Electronic Trading Platform (for trading and reporting OTC bond transactions) |
Exchange Group |
The subsidiaries under Bursa Malaysia that operate the securities and derivatives exchanges, the securities and derivatives clearing services, depository services and bond trading and trade repository services: Bursa Malaysia Securities Berhad; Bursa Malaysia Derivatives Berhad; Bursa Malaysia Securities Clearing Sdn Bhd; Bursa Malaysia Derivatives, Clearing Sdn Bhd, Bursa Malaysia Depository Sdn Bhd; and Bursa Malaysia Bonds Sdn Bhd |
FIMM |
Federation of Investment Managers Malaysia |
FMC |
Fund Management Company (discretionary portfolio manager) |
FRA |
Financial Reporting Act, 1997 |
FRF |
Financial Reporting Foundation |
FRS |
Financial Reporting Standards (Malaysian) |
FSEC |
Financial Stability Executive Committee |
High Level Group |
High Level Financial and Market Stability Group |
JSG |
Joint Surveillance Group |
IAC |
Independent Advice Circular |
IASB |
International Accounting Standards Board |
IAS |
International Accounting Standard |
ICM |
Islamic Capital Markets |
IFAC |
International Federation of Accountants |
IFRS |
International Financial Reporting Standards |
IO |
Investigating Officer |
IOSCO |
International Organization of Securities Commissions |
ISA |
International Standards on Auditing |
ISQC |
International Standards on Quality Control (auditors) |
IUTA |
Institutional Unit Trust Adviser (financial institution or other regulated entity authorized to sell CIS) |
KLCI |
Kuala Lumpur Composite Index |
MASB |
Malaysian Accounting Standards Board |
MGS |
Malaysian Government Securities |
MIA |
Malaysian Institute of Accountants |
Minister |
Minister of Finance |
Ministry |
Ministry of Finance |
MMOU |
IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information |
OTC |
Over-the-counter |
PAC |
Persons Acting in Concert (in a take-over bid context) |
PIE |
Public Interest Entity (these include companies listed on the stock exchange and institutions that are subject to supervision by Bank Negara Malaysia and the Securities Commission) |
PID |
Public Interest Director |
PIDM |
Perbadanan Insurans Deposit Malaysia (the Malaysian Deposit Insurer) |
PIDM Act |
Perbadanan Insurans Deposit Malaysia Act, 2011 |
PO |
Participating Organization (member firm in Bursa Malaysia Securities) |
RAC |
Risk Adjusted Capital |
REF |
Registered Electronic Facility |
REIT |
Real Estate Investment Trust |
Regulatory Guidance |
Guidance on the Regulatory Role of Bursa Malaysia Berhad |
SAC |
Shariah Advisory Council (part of the SC) |
SC |
Securities Commission Malaysia |
SCA |
Securities Commission Act 1993 |
SICDA |
Securities Industry (Central Depositories) Act, 1991 |
SIDC |
Securities Industry Development Corporation |
SIDREC |
Securities Industry Dispute Resolution Centre |
SIFI |
Systemically Important Financial Institution |
SMARTS |
Securities Markets Automated Research Trading and Surveillance System |
SRO |
Self-Regulatory Organization |
SROC |
Systemic Risk Oversight Committee |
Take-over Code |
Malaysian Code on Take-overs and Mergers, 2010 |
TCP |
Trade Clearing Participant (at the Securities Clearing House) |
TP |
Trading Participant (member firm at Bursa Malaysia Derivatives) |
UTC |
Unit Trust Consultant (individual selling unit trusts) |
UTF |
Unit Trust Fund (CIS) |
UTMC |
Unit Trust Management Company (operator of a CIS) |