Module 2A: Business Challenges and Regulatory – What Directors Need to Know (Equities and Futures Broking) Expectations

Capital Market Director Program

03
Mar 2020

3 March 2020

2:00 pm - 5:30 pm

Securities Commission Malaysia

MYR 1250 *Fee is not inclusive of 6% SST

Module 2A: Business Challenges And Regulatory Expectations

Scope of Coverage

  1. Nature of the relevant business (stockbroking, investment banking and futures broking), including its shifting trends and regulatory and competitive changes
  2. Overview of the expected competencies to understand the nature, conduct and performance of the relevant business
  3. Challenges in the operations, systems and procedures to meet the expectations laid out in the applicable SC Guidelines with particular reference to the following areas of:
  4. Customer due diligence;
  5. Insider and/or price sensitive information;
  6. Real or perceived conflicts of interest situations;
  7. Market misconduct, including front running and scalping;
  8. Compliance function and compliance officers;
  9. Breaches of securities laws, rules and regulations;
  10. AML/CFT framework;
  11. Bursa Malaysia’s approach to ensuring fair and orderly market.

Learning Outcomes

At the end of the programme, participants will be able to:

  1. Identify and discuss the nature, challenges and opportunities in the relevant business (stockbroking, investment banking and futures broking);
  2. Evaluate the relevant provisions in the applicable guidelines that directors of licensed intermediaries need to be cognizant of;
  3. Assess the challenges facing directors of relevant business (stockbroking, investment banking and futures broking) in overseeing the application of and conformance with the applicable guidelines;
  4. Exercise judgement appropriately in dealing with issues of business challenges and regulatory expectations brought to the attention of the board.

Learning Outcomes

Candidates are expected to have good knowledge, understanding and ability to apply in the following areas:

  • The principles of contract law and relevant issues
  • The laws which are relevant to the advisory services in the Malaysian capital market
  • The system and procedures of licensing of persons who carry on the investment advisory business in Malaysia
  • The features and prohibitions of investment advisory activities
  • The regulations governing the issue and offer of equity securities, listing of corporations and quotations of securities on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities) (Main Market) and proposals which result in a significant change in the business direction or policy of corporations listed on the Main Market under the Securities Commission Malaysia’s Equity Guidelines
  • The regulations setting out who can act as principal advisers for the submission of corporate proposals and the competency standards required
  • The regulations governing the conduct of due diligence for corporate proposals by issuers, advisers and experts
  • The activities and current trends connected to money laundering and terrorism financing and the Malaysian regulatory approach towards them
  • The characteristics and regulations governing take-overs in Malaysia
  • The regulations governing valuations of property assets in conjunction with corporate proposals for submission to the Securities Commission Malaysia or for inclusion in prospectuses and circulars
  • The regulations governing the issuance and registration of prospectuses
  • The regulations governing the issue, subscription, purchase, invitation to subscribe or purchase private debt securities or sukuk to retail investors
  • The regulations that must be observed for the purposes of exclusively making available unlisted capital market products to sophisticated investors in Malaysia or persons outside Malaysia
  • The regulations governing the issuers of structured warrants
  • The regulations governing listing of securities under the Bursa Securities Main Market Listing Requirements, Bursa Malaysia Securities Berhad ACE Market Listing Requirements and Bursa Malaysia Securities Berhad LEAP Market Listing

Candidates’ Prerequisites

It is estimated that this module will require a minimum of 200 hours of study time. Candidates are expected to have relatively strong capability in the application and analysis of information provided in this outline and its reference. The amount of study hours needed depends on the education background and work experience of the candidates. Candidates are also expected to update themselves with the latest changes relevant to this module as all questions will be continuously updated to reflect these changes.

Methodology

This course will be delivered using effective learning methods which include presentations, discussions and review examination questions.

Individual 

Compliance officers, risk management officers, audit officers, sales and trading officers, settlement officers.

Institutions 

Stockbroking firms, asset management companies, investment and commercial banks.

PROGRAMME – DAY ONE 

8.30 am Registration
9.00 am LEGAL CONSIDERATIONS AND CODE OF CONDUCT

  • Outline of the law of contract
  • Essential elements of a contract
  • Other elements of contract
  • Exclusion and limitation clauses
  • Remedies for breach of contract
10.45 am Refreshment
11.00 am NEGLIGENT MISSTATEMENT

  • Negligence
  • Defences
  • General liability of stockbrokers
  • False and misleading statements under securities laws

LICENSING OF PERSONS WHO CARRY ON THE BUSINESS OF INVESTMENT ADVICE, ADVISING ON CORPORATE FINANCE AND THEIR REPRESENTATIVES 

  • Advising on corporate finance, Investment advice, CMSL and CMSRL defined
  • Requirement to be licensed
  • Criteria for the grant of licence
  • Revocation and suspension of licence
  • Duties and obligations of licence holder

PROHIBITED CONDUCT AND INSIDER TRADING 

  • Prohibited conduct
  • Insider trading
1.00 pm Lunch
2.00 pm GUIDELINES ON PREVENTION OF MONEY LAUNDERING AND TERRORISM FINANCING FOR CAPITAL MARKET INTERMEDIARIES

  • Part I: Introduction and Applicability
  • Part II: Risk-Based Approach Application
  • Part III: Customer Due Diligence
  • Part IV: Retention of Records
  • Part V: Suspicious Transactions
  • Part VI: Compliance and Training Programmes
  • Part VII: Combating  Terrorism Financing

GUIDELINES RELATED TO ADVISORY SERVICES  AND ITS APPLICATIONS
1. EQUITY GUIDELINES

  • Part I: General
  • Part II: Policy Guidelines
  • Part III: Submission and Implementation
3.45 pm Refreshment
4.00 pm GUIDELINES RELATED TO  ADVISORY SERVICES  AND ITS APPLICATIONS (CONT)
2. PRINCIPAL  ADVISER GUIDELINES

  • Chapter 1: General
  • Chapter 2: Eligibility to Act as Principal Advisers
  • Chapter 3: Additional Eligibility Criteria for Principal Advisers Submitting Specific Corporate Proposals

3. GUIDELINES ON DUE DILIGENCE CONDUCT FOR CORPORATE PROPOSALS

  • Chapter 1: General
  • Chapter 2: Definitions
  • Chapter 3: Mandatory Obligations
  • Chapter 4: Best Practices

4. MALAYSIAN CODE ON TAKE-OVERS AND MERGERS 2016

  • Citation and Commencement
  • General Principle 1 to 12
  • Acquisition pursuant to subsection 218(3)
  • Revocation and saving

5. RULES ON TAKE-OVERS, MERGERS AND COMPULSORY ACQUISITION

  • General
  • Take-Over Offer
  • Process And Procedure of Take-Over Offer
  • Conduct During Offer
  • Compulsory Acquisition And Right Of Minority Shareholders

 

5.30 pm End of Day One

PROGRAMME – DAY TWO

8.30 am Registration
9.00 am GUIDELINES RELATED TO  ADVISORY SERVICES  AND ITS APPLICATIONS (CONT)
6. ASSET VALUATION GUIDELINES

  • Chapter 3: Appointment of Valuer
  • Chapter 4: Valuation
  • Chapter 7: Requirements for Valuation of Specific Property Assets
  • Chapter 8: Submission of Report
10.45 am Refreshment
11.00 am 7. PROSPECTUS GUIDELINES

  • Part I: Division 1- Equity
  • Part I: Division 2- Debenture and Sukuk
  • Part I: Division 3 – Structured Warrant
  • Part I: Division 5 – Abridged Prospectus
  • Part I: Division 6 – Supplementary and Replacement Prospectus
  • Part II: Procedures for Registration
  • Part III: Prospectus-Related Guidelines
  • Division 1- Plain Language Guide for Prospectus
  • Division 2- Electronic Prospectuses and Application Guidelines
  • Division 3- Advertising Guidelines
  • Part IV: Practice Notes

8.  GUIDELINES ON ISSUANCE OF CORPORATE BONDS AND SUKUK TO RETAIL INVESTORS

  • Part A: General
  • Part B: Requirements for an Issuance of Corporate Bonds or Sukuk
  • Part C: Approval for an Issuance of Corporate Bonds or Sukuk
  • Part D: Additional Shariah Requirements for Sukuk
  • Part E: Requirements for an Issuance of Sustainable and Responsible Sukuk
  • Part F: Requirements for an Issuance of ASEAN Green Bonds and Sukuk
1.00 pm Lunch
2.00 pm 9. GUIDELINES ON UNLISTED CAPITAL MARKET PRODUCTS UNDER THE LODGE AND LAUNCH FRAMEWORK

  • Section A: General Requirements
  • Section B: Specific Requirements
    • Part 2: Structured Products
    • Part 3: Corporate Bonds and Sukuk
    • Part 4: Asset-Backed Securities
  • Section C: Additional Requirements for Shariah-Compliant Unlisted Capital Market Products Under the Lodge and Launch Framework
  • Section D: Transitional Provisions
3.45 pm Refreshment
4.00 pm 10. LODGEMENT KIT: UNLISTED CAPITAL MARKET PRODUCTS UNDER THE LODGE AND LAUNCH FRAMEWORK

  • Part 2: Structured Products
  • Part 3: Corporate Bonds and Sukuk
  • Part 4: Asset- Backed Securities
5.30 pm End of Day Two

PROGRAMME – DAY THREE

8.30 am Registration
9.00 am GUIDELINES RELATED TO  ADVISORY SERVICES  AND ITS APPLICATIONS (CONT)
11. ISSUER ELIGIBILITY GUIDELINES – STRUCTURED WARRANTS

  • General
  • Eligible Issuers of Structured Warrants
  • Requirements on Issuers
  • Supervisory Action
  • Submission of Declaration
10.15 am Refreshment
10.30 am BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING REQUIREMENTS 

  • Chapter 2: General
  • Chapter 3: Admission
  • Chapter 4: Admission for Specific Applicants
  • Chapter 4A: Foreign Listing
  • Chapter 4B: Listing of Sukuk and Debt Securities
  • Chapter 5: Structured Warrants
  • Chapter 6: New Issues of Securities
  • Chapter 8: Continuing Listing Obligations
  • Chapter 9: Continuing Disclosure
  • Chapter 10: Transactions
  • Chapter 12: Share Buy-Backs
  • Chapter 13: Arrangements and Reconstructions
  • Chapter 14: Dealings in Listed Securities
  • Chapter 15: Corporate Governance
  • Chapter 16: Suspension, De-listing and Enforcement
  • Practice Notes
1.00 pm Lunch
2.00 pm BURSA MALAYSIA SECURITIES BERHAD ACE MARKET LISTING REQUIREMENTS

  • Chapter 2: General
  • Chapter 3: Admission
  • Chapter 4: Sponsors
  • Chapter 5: Foreign Listing
  • Chapter 6: New Issue of Securities
  • Chapter 8: Continuing Listing Obligations
  • Chapter 9: Continuing Disclosure
  • Chapter 10: Transactions
  • Chapter 12: Share Buy-Backs
  • Chapter 13: Arrangements and Reconstructions
  • Chapter 14: Dealings in Listed Securities
  • Chapter 15: Corporate Governance
  • Chapter 16: Suspension, De-listing and Enforcement
  • Guidance Notes

BURSA MALAYSIA SECURITIES BERHAD LEAP MARKET LISTING REQUIREMENTS

  • General
  • Admission
  • Advisers
  • New Issues of Securities
  • Continuing Listing Obligations
  • Transactions
  • Suspension, De-Listing and Enforcement
3.30 pm Refreshment
3.45 pm Revision and Feedback Session on Set of Questions
5.30 pm End of Programme

THOMAS CHAN

Thomas is a training consultant with i-Biz Concept Sdn Bhd and has been conducting training for more than fifteen years, specialising in a broad range of financial areas. His background is in investment management, financial planning, corporate finance and relationship management. He is a regular speaker for various SIDC accredited courses as well as certification programmes such as the Certified Financial Planner (CFP). He has spent more than a decade in the financial services industry working within major financial institutions, fund management companies and insurance companies. He is a Certified Financial Planner and previously, held a Capital Market Services Representative Licence for fund management. He studied for his Master Degree in Finance and Bachelor Degree in Marketing at University of Strathclyde, United Kingdom, where he completed a number of research papers, among them “The underpricing of IPO phenomenon in Malaysia” and “Is the Malaysian stock market efficient?”.

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