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TO OUR STAKEHOLDERS
Bursa Malaysia
•
Annual Report 2014
51
REGULATORY STATEMENT
With regards to listed issuers, our focus in the area of corporate surveillance is to
ensure our listed issuers comply with the Listing Requirements (LR). To this end, we
continued to improve our detection capabilities and conducted thematic studies to
identify areas of concern and addressed them as necessary. In 2014, we monitored
the financial condition and corporate developments of listed issuers, and concerns
noted were addressed through effective regulatory actions including pre-emptive
actions. All possible material breaches of LR were forwarded to the investigation
department and those which involved potential breach of the law were sent to the
relevant regulatory authorities.
We continued to enhance our surveillance capabilities by adopting new systems, as
well as providing staff with up-skilling programmes. All these contributed to timely
regulatory measures to guard against abusive practices.
QUALITY AND TIMELY DISCLOSURES
Our focus remains on increasing the timeliness and quality of disclosures made
by listed issuers. Accordingly, we continued to review our supervisory approaches
as well as implemented new approaches relating to announcement and circulars.
In the course of our continuous supervisory activities, we also sought to ensure
that investors are provided with adequate information by reviewing corporate
announcements, circulars and media articles on corporate information as well as
monitoring the timeliness of financial report submissions. Moreover, to enhance
the quality of disclosures in Independent Advice Letters (IAL), we issued the Best
Practice Guide for IAL in July 2014. The Guide clarifies the role of an Independent
Adviser and provides guidance on the standards of disclosure in IALs.
In cultivating a stronger culture of disclosure, we undertook greater engagements
with listed issuers through our advocacy programmes on corporate disclosures for
directors of listed issuers. In 2014, we embarked on a new initiative comprising
customised advocacy sessions for listed issuers and technical advocacy
programmes for company secretaries. During the year, we undertook the following
programmes which were attended by 667 directors and senior management of
listed issuers and 665 company secretaries:
a.
Four advocacy sessions for Directors of Public Listed Companies (PLCs)
b. Six technical briefings for company secretaries
c.
Two customised advocacy sessions for selected listed issuers
The Listing Advisory Team, established in 2013, also facilitates understanding
of the disclosure requirements and other obligations as stipulated in the Listing
Requirements. In 2014, we improved its functionality by implementing an online
Customer Relationship System (the Listing Advisory Portal) to receive enquiries
on matters relating to Listing Requirements. The turnaround time in responding
to queries remained swift, ranging from one to three days depending on the
complexity of the matter.
As a result of these initiatives,2014 saw improved standards of disclosure and a high
level of adherence to the prescribed requirements.We noted a general improvement
in the quality of disclosure in circulars with queries issued on announcements being
lower at 0.82% of total general announcements, as compared to 1.1% in 2013.
The adherence to the timeliness of submission of periodic financial information
remained strong in 2014 at 99.48%, as compared to 99.52% in 2013.
CORPORATE GOVERNANCE STANDARDS AND SUSTAINABILITY PRACTICES
Bursa Malaysia is focused on having a strong culture of corporate governance (CG).
In 2014, our efforts were recognised in a survey undertaken by the Asian Corporate
Governance Association in collaboration with CLSA Asia Pacific (ACGA CG Watch).
The survey noted that Malaysia is the only capital market in the region that has
consistently improved its CG performance, with its score for CG rules and practices
improving from 52% in 2013 to 55% in 2014, and from 38% in 2013 to 43% in
2014 in the area of CG culture.
As part of this effort to improve the quality of corporate governance disclosures in
annual reports, we undertook an assessment of 300 annual reports of listed issuers.
We assessed the quality and level of disclosures in the Corporate Governance
Statement, Audit Committee Report and Statement of Internal Control. We issued
the report and engaged with the listed issuers by providing them with the results of
our assessment to improve their disclosures.
As in previous years, we engaged with gatekeepers such as the Minority
Shareholder Watchdog Group and the Institute of Internal Auditors, as well as
international investors, to promote good CG culture.
Continuing our efforts to improve market quality through good sustainability
performance and reporting, we assessed listed issuers’ sustainability reports
to identify areas for improvement and new opportunities, and engaged with
investors and other stakeholders to formulate strategies to improve sustainability
performance and reporting.
STANDARDS OF BUSINESS CONDUCT OF BROKERS
We remain focused on ensuring sound business conduct, that brokers comply with
minimum financial requirements, and that incidences which pose systemic risk
to the market do not arise. Thus, in 2014 we continued our on-site audits and
monitoring of brokers’ financial health, client asset protection, business conduct
and compliance with our rules. All brokers were found to comply with the minimum
financial requirements. Additionally, there were no material findings that could
cause systemic risk to the industry and no industry-wide breaches in 2014.
Futhermore, we rolled out several initiatives in 2014 to increase the ease of doing
business. These initiatives included:
a.
Straight Through Processing (STP) for Registration – Application requirements
of participants were simplified to enable one-time applications for participants
by establishing an electronic link between Securities Commission’s Electronic
Licensing Application (ELA) System and Bursa Malaysia’s Integrated
Participants Registration Information System (IPRIS).
b. Non Face-to-Face Approach for Flexible Account Opening for Individual Clients
– A regulatory framework was introduced to allow brokers to open accounts
without requiring clients to be present in person or before an acceptable
witness, thus enabling the use of technology such as online mediums to
expedite the opening of accounts.
c.
Flexibilities onAccount Opening for Prescribed Corporate Clients –A regulatory
framework was introduced to simplify the requirements of account opening
documentation for prescribed corporate clients.