Enforcement
We take a very strict view of breaches to our Business Rules and Listing Requirements and undertake enforcement proceedings and actions according to the severity of the breach as these infractions have the potential to undermine investors' rights and protection.
Enforcement Statistics
Our enforcement actions are aimed to deter future breaches, educate market participants, promote a better culture of compliance and standards of business conduct and corporate governance practices. To this end and in line with our primary obligation to protect investors, maintain a fair and orderly market and market of integrity, we generally focus on material breaches of our Rules. Warnings or caution would be issued for less serious breaches. Besides imposing penalties, errant parties are given the opportunity to institute/undertake remedial or corrective actions (where possible).
As at 31 December 2012, the total enforcement actions for various breaches of the LR amounted to 117, involving 25 PLCs, and 50 directors (of 10 PLCs).
In our assessment of our enforcement activities for 2012, we noted that the common areas of breaches where enforcement actions were taken against the PLCs and/or Directors were in respect of delay in making immediate announcements of defaults in payments, delay in submission of financial statements, delay in making material/requisite announcements, and breaches in relation to making inaccurate/incomplete announcement (including issuance of misleading financial statements and response to media/UMA query) to Bursa resulting in reprimands (both private and public) against the PLCs and either a private reprimand, public reprimand or public reprimand coupled with fines imposed on the culpable directors.
Details of the enforcement actions taken in 2012 are set out below.
| Sanctions Imposed# | PLCs | Directors | Total |
|---|---|---|---|
| Public Reprimand and Fine | - | 60 | 60 |
| Public Reprimand | 31 | 16 | 47 |
| Private Reprimand | 9 | 1 | 10 |
| Total | 40 | 77 | 117 |
| Total Fines Imposed (RM) | - | 2,234,750 | 2,234,750 |
As for violations of our Business Rules, enforcement actions were instituted against participants, their dealer’s representatives and agents generally for supervisory breaches by participating organizations and market/trading offences by dealer’s representatives. The total number of sanctions in 2012 was 146 which included reprimands (both public and private), striking off, suspension and fines amounting to RM814,500.
| Type of Action Taken# | Participating Organisations/ Securities Clearing Participants | Dealer's Representatives/ Registered Persons (Securities) | Authorised Depository Agents | Trading Participants/ Derivatives Clearing Participants/ FBRs/Local Participants | Total |
|---|---|---|---|---|---|
| Reprimand (Public/Private) and/or Fine and/or Suspension/Striking off and/or Additional Conditions | 2 | 13 | - | 1 | 16 |
| Private Reprimand and/or Fine | 4 | - | 1 | - | 5 |
| Private Reprimand and/or Fine | 4 | - | 1 | - | 5 |
| Caution | 24 | 7 | 1 | 24 | 56 |
| Total Sanctions | 38 | 9 | 7 | 15 | 69 |
| Total Fines Imposed (RM) | 68 | 29 | 9 | 40 | 146 |
# more than one sanction may have been imposed on a director, PLC or other market participants and the total number of sanctions reported is greater than the number of persons or entities against whom we took action.
As part of our effort to educate market participants, inform the market of the range of actions taken, instill market confidence and ensure transparency in our enforcement actions, information on common breaches of our Rules are posted on our website and where the sanctions imposed include a public reprimand public sanctions, a media release (together with the basis for the findings of the breach) were issued.