SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 453 SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991 As at 1 March 2013 2 SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991 … … … 28 March 1991 Date of publication in the Gazette … … 11 April 1991 Latest amendment made by Act A1216 which came into operation on … … … … 5 January 2004 Date of Royal Assent … … PREVIOUS REPRINTS First Reprint … … … … … 2001 Second Reprint … … ……… 2006 3 LAWS OF MALAYSIA Act 453 SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation PART II CENTRAL DEPOSITORY 3. Restriction on establishment of a central depository 4. Application for approval to establish and maintain a central depository 5. Power of Minister to approve the establishment of a central depository 5A. Withdrawal of approval of a central depository 5B. Effect of withdrawal 5C. Arrangements as to the discharge of duties of exchange holding company and central depository 6. Minister may establish advisory committees 7. Commission to approve amendment to rules of central depository 8. Duty of a central depository to ensure orderly dealings in deposited securities 9. Authorized deposited agents, issuers, etc., to comply with rules of a central despository 10. Central depository to provide assistance to the Commission 4 Laws of Malaysia ACT 453 PART III PROVISIONS RELATING TO DEPOSITED SECURITIES DIVISION I – DEPOSITED SECURITIES Section 11. Interpretation 12. Duties of a central depository 13. Authorized depository agent 14. Stock exchange to prescribe securities that may be deposited with a central depository 15. (Deleted) 16. (Deleted) 17. Undeposited securities not to be traded on a stock market or utilized to settle market trade 18. Verification of scrips and transfer to a central depository or nominee company 19. Central depository and authorized depository agent not liable for loss 20. Issuance of jumbo certificates 21. Central depository deemed a bare trustee DIVISION II – WITHDRAWAL OF SECURITIES 22. (Deleted) 23. (Deleted) 24. Prohibition of withdrawal DIVISION III – SECURITIES ACCOUNTS AND RECORDS 25. Securities accounts 25A. Authorized nominee shall hold deposited securities for one beneficial owner in respect of each securities account 26. Issuance of statements of accounts 27. Duty of central depository to keep certain records 28. Physical stock count of scrips Securities Industry (Central Depositories) 5 DIVISION IV – SECURITIES TRANSACTIONS, ENTRIES AND MISCELLANEOUS Section 29. Dealings effected by means of electronic process 29A. Dealings in deposited securities shall be effected by beneficial owners or authorized nominees 30. Entries in securities accounts 31. Entries in securities accounts in respect of direct business, etc. 32. Entries in securities accounts to specify date, time and person making the entries 33. Record of an entry prima facie evidence 34. Record of depositors to be issued to issuer on request 35. A depositor to be treated as if he were a member 36. Prohibition against acquisition of, or dealings in, deposited securities by a central depository 37. Public offer 38. Bonus, rights issues, etc. 39. Underwriters to open securities accounts 40. Charging of pledging of securities 41. Securities in suspence 41A. Notice of trust PART IV SECRECY PROVISIONS 42. Duty to take reasonable security measures 43. Duty to maintain secrecy 44. Restrictions on disclosure of information by authorized depository agents 45. Permitted disclosures 46. Regulation of access to the computer system 6 Laws of Malaysia ACT 453 PART V OFFENCES Section 47. Falsification of records or accounts 48. Destruction, concealment, mutilation and alteration of records prohibited 49. Furnishing false or misleading information 50. Offence by bodies corporate 51. General penalty PART VI ENFORCEMENT 52. (Deleted) 53. Power of Comission to require production of records 54. (Deleted) 55. (Deleted) 56. Disclosure to Commission 57. Investigation by Commission 58. Power of Court to make certain orders 58A. Application for winding up PART VII GENERAL 59. Preservation of records and accounts 60. Power of Commission to compound 61. Criminal prosecution 61A. Commission may be represented by officer in civil proceedings 61B. Powers concerning compliance with rules of the central depository, etc. 62. Indemnity 62A. Power of exemption 63. Regulations Securities Industry (Central Depositories) 7 Section 64. Reference to allottee in the Companies Act 1965 65. (Deleted) 66. Reference to owner in section 102 of the Companies Act 1965 67. Reference to company in section 103 of the Companies Act 1965 68. Reference to members of a public company in section 166 of the Companies Act 1965 9 LAWS OF MALAYSIA Act 453 SECURITIES INDUSTRY (CENTRAL DEPOSITORIES) ACT 1991 An Act to provide for the regulation of central depositories, and the deposit, holding, withdrawal of, and dealings in, securities deposited therewith and to provide for matters incidental thereto. [15 June 1992, P.U. (B) 270/1992] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agorig with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: PART I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Securities Industry (Central Depositories) Act 1991. (2) This Act shall come into force on such date as the Minister may, by notification in the Gazette, appoint and the Minister may appoint different dates for the coming into operation of different provisions of this Act. 10 Laws of Malaysia ACT 453 Interpretation 2. (1) In this Act, unless the context otherwise requires— ―access‖, in relation to a computer system, means the placing of information on that system and the retrieval of information from that system; ―Act‖ includes any regulations made under this Act; ―authorized depository agent‖, in relation to any central depository, means a person appointed under section 13 to be an agent of that central depository; ―authorized nominee‖ means a person who is authorized to act as a nominee as specified under the rules of a central depository; ―bearer security‖ means a security the title to which is transferable by delivery (with or without endorsement) of the scrip representing such security; ―beneficial owner‖, in relation to deposited securities, means the ultimate owner of the deposited securities who is the person who is entitled to all rights, benefits, powers and privileges and is subject to all liabilities, duties and obligations in respect of, or arising from, the deposited securities, and does not include a nominee of any description; ―buying in‖ means the buying effected by a stock exchange or its clearing house, according to the rules of the stock exchange, of securities which a seller has failed to deliver on a day fixed for settlement; ―Central Bank of Malaysia‖ means the Central Bank established under the Central Bank of Malaysia Act 1958 [Act 519]; ―central depository‖ means a company approved by the Minister under section 5— Securities Industry (Central Depositories) (a) (b) 11 to establish and operate a system for the central handling of securities, whether or not listed on any stock exchange,— (i) whereby all such securities are deposited with and held in custody by, or registered in the name of, the company or its nominee company for the depositors and dealings in respect of those securities are effected by means of entries in securities accounts without the physical delivery of scrips; or (ii) which permits or facilitates the settlement of securities transactions or dealings in securities without the physical delivery of scrips; and to provide other facilities and services incidental thereto; ―charge‖ includes a mortgage; ―Commission‖ means the Securities Commission established under the Securities Commission Act 1993 [Act 498]; ―computer system‖, in relation to a central depository, means the computer system established by a central depository forming part of the system for the central handling of securities which inter alia consists of— (a) the central equipment comprising hardware, and software associated with that hardware, located at the premises of the central depository; and (b) the terminals located at the premises of the users; 12 Laws of Malaysia ACT 453 ―dealer‖ has the same meaning as is assigned to that expression under subsection 2(1) of the *Securities Industry Act 1983 [Act 280]; ―dealing‖, in relation to any deposited security, includes the charging or pledging of the deposited security by a depositor; ―debt securities‖ means debentures, bonds, notes, or other similar instrument representing or evidencing indebtedness, whether secured or otherwise; ―deposited security‖ means a security standing to the credit of a securities account and includes a security in a securities account that is in suspense; ―depositor‖ means a holder of a securities account; ―exchange holding company‖ has the same meaning as is assigned to that expression under subsection 2(1) of the *Securities Industry Act 1983; ―information‖ includes data recorded in a form which can be processed by equipment operating automatically in response to instructions given for a particular purpose; ―issuer‖, in relation to any deposited security, means the public company, corporation, government, or the body, corporate or unincorporate, which issued the security, and includes any person performing the functions of a registrar or an issuing house for such issuer in respect of such security; ―listed deposited security‖ means a deposited security quoted on an official list of a stock exchange; ―Minister‖ means the Minister of Finance; * NOTE—This Act has since been repealed by Capital Market and Services Act 2007 [ Act 671] which comes into operation on 28 September 2007 except Division 2 of Part VI which comes into operation on 1 April 2010–see subsection 381(2) Act 671, P.U. (B) 342/2007 and P.U. (B) 143/2010. Securities Industry (Central Depositories) 13 ―nominee company‖, in relation to a central depository, means a company appointed by the central depository for the purpose of holding any deposited security; ―non-bearer security‖ means a security other than a bearer security; ―official list‖, in relation to a stock exchange, means a list specifying all securities which have been admitted for quotation on the stock exchange; ―participating organization‖ has the same meaning as is assigned to that expression under subsection 2(1) of the *Securities Industry Act 1983; ―record‖ includes, in addition to a record in writing— (a) any photograph; (b) any disc, tape, sound-track or other device in which sounds or other data (not being visual images) are embodied so as to be capable (with or without the aid of some other instrument) of being reproduced therefrom; and (c) any film, tape or other device in which visual images are embodied so as to be capable (with or without the aid of some other instrument) of being reproduced therefrom, and any reference to a copy of a record includes— (i) * in the case of a record falling within paragraph (b) but not paragraph (c) of this definition, a transcript of the sounds or other data embodied therein; NOTE—This Act has since been repealed by Capital Market and Services Act 2007 [ Act 671] which comes into operation on 28 September 2007 except Division 2 of Part VI which comes into operation on 1 April 2010–see subsection 381(2) Act 671, P.U. (B) 342/2007 and P.U. (B) 143/2010. 14 Laws of Malaysia ACT 453 (ii) in the case of a record falling within paragraph (c) but not paragraph (b) of this definition, a still reproduction of the images embodied therein, whether enlarged or not; and (iii) in the case of a record falling within both