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Compensation Fund

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Compensation Fund

In the interest of protecting investors, three (3) separate compensation funds have been established and maintained by the subsidiaries of Bursa Malaysia Berhad ("Bursa Malaysia") with the main objective to compensate investors who have suffered monetary losses or damage under certain circumstances, as prescribed under the relevant securities laws and regulations.

Pursuant to the Capital Markets and Services (Amendment) Act 2012 (CMSA Amendment Act 2012), the establishment of the Capital Market Compensation Fund came into effect from 28 December 2012 under Part IV of the Capital Markets and Services Act 2007 (CMSA). For details of the new framework of the Capital Market Compensation Fund, kindly refer to Securities Commission’s official website.

Consequently, the Compensation Fund of Bursa Malaysia Securities Berhad ("Bursa Securities") and Fidelity Fund of Bursa Malaysia Derivatives Berhad ("Bursa Derivatives") established by Bursa Securities and Bursa Derivatives respectively as required under the CMSA prior to 28 December 2012 (“old CMSA”) will no longer in existence with effect from 28 December 2012. However, all claims made in relation to the Compensation Fund of Bursa Securities and Fidelity Fund of Bursa Derivatives prior to 28 December 2012 will continue to be considered and decided by Bursa Malaysia. (For more information, kindly refer to Participating Organisations’ Circular No. R/R 13 of 2012 and Trading Participant Circular No. 36/2012).

In addition, under the Capital Markets and Services (Dispute Resolution) Regulations 2010, the Securities Industry Dispute Resolution Center (SIDREC) is established as an alternative to existing dispute resolution bodies. SIDREC is established to resolve monetary disputes between investors and capital market intermediaries registered as its members, such as stockbrokers, futures brokers, unit trust management companies, and fund managers. For more details of the dispute resolution framework maintained by SIDREC, kindly refer to SIDREC’s website.

 

An Overview

  • What are the compensation funds established and maintained by Bursa Malaysia?

    The compensation funds established and maintained by Bursa Malaysia are as follows:

    1. the Compensation Fund of Bursa Securities, pursuant to the old CMSA and is applied for the purpose of compensating persons suffering monetary loss in the circumstances as provided under the old Section 152 of the CMSA (in regard to the claims made prior to 28 December 2012);
    2. the Fidelity Fund of Bursa Derivatives, pursuant to the old CMSA and is applied for the purpose of compensating persons suffering monetary loss in the circumstances as provided under the old Section 167 of the CMSA (in regard to the claims made prior to 28 December 2012); and
    3. the Compensation Fund of Bursa Malaysia Depository Sdn Bhd ("Bursa Depository"), pursuant to Section 5(1)(b)(vii) of the Securities Industry (Central Depositories) Act 1991 ("SICDA") for the purpose of compensating persons suffering loss or damage arising from the circumstances provided under Rule 34.01 of the Rules of Bursa Depository.
  • Who is eligible for claim under the Compensation Fund of Bursa Depository?

    Persons (holders of securities account) who have suffered loss or damage ("Claimant") as envisaged under Rule 34.01 of the Rules of Bursa Depository in respect of any transaction pertaining to his securities account arising from:

    • computer crimes involving theft or criminal damage to the computer system
    • theft, damage, falsification or alteration of any record or data kept within the computer system
    • stolen or missing scrips which are under the physical control of Bursa Depository whether such scrips are kept in its premises or are in transit
    • fire or theft of any records in any vault, premise or warehouse of Bursa Depository where such records are to be kept pursuant to Section 59 of SICDA
    • professional negligence of Bursa Depository's employees or servants
    • public liability
    • infidelity of employees through their dishonest or fraudulent acts committed by such employees with intent to cause or sustain loss or to obtain financial gain for themselves, wherever committed and whether committed alone or in collusion with others.
  • How are claims processed?
    • Claimant submits claim in writing and complete the Claim Form (for claim against Compensation Fund of Bursa Depository).
    • The Compensation Committee of Bursa Malaysia deliberates on the claim.
    • Claimant receives notification from Bursa Malaysia on status of claim.
    • If dissatisfied, in relation to the claims made prior to 28 December 2012 to the Compensation Fund of Bursa Securities and Fidelity Fund of Bursa Derivatives the Claimant may appeal within one (1) month to the Securities Commission.
    • For the appeal in regard to the claim against the Compensation Fund of Bursa Depository, the appeal is within 14 days to the Appeals Committee of Bursa Malaysia.
    • Claimant collects cheque if claim is successful.
  • What is the claim limit?

    For the claim made (prior to 28 December 2012) against the Compensation Fund of Bursa Securities : RM100,000 per claim and no limit per stockbroking company.

    For the claim made (prior to 28 December 2012) against the Fidelity Fund of Bursa Derivatives : RM500,000 in respect of each TP.

    For the claim made against the Compensation Fund of Bursa Depository : RM100,000 per claim.

  • When is the cut-off date for submission of claim?

    For the claim made against the Compensation Fund of Bursa Depository, the claimant should endeavor to submit his/her claim soonest possible without any undue delay (not later than 6 months) upon becoming aware of the circumstances giving rise to the claim.

Questions & Answers for Claimants

  • How does Bursa Malaysia determine the eligibility of claims from the compensation fund?

    The following will be taken into consideration:

    • Whether the Claimant is a person who has suffered loss in the manner envisaged under the relevant law / regulation.
    • Whether the claim was in accordance with the provisions of the CMSA / CMSR / the rules concerned.
    • Whether there are bankruptcy proceedings instituted against the Claimant.
    • Whether all facts and statements of claims given to Bursa Malaysia are accurate in all material aspects.
  • How do I submit a claim to the Compensation Fund of Bursa Depository?

    Claims must be submitted on or before the cut-off date to:

    The Secretariat,
    Compensation Fund of Bursa Malaysia Depository Sdn Bhd
    Bursa Malaysia Berhad,
    Enforcement Division,
    9th Floor, Exchange Square,
    Bukit Kewangan,
    50200 Kuala Lumpur,
    Malaysia

  • How soon can my claim be processed?

    The determination of a claim will be made upon completion of investigation into the claim made and the facts and circumstances including the relevant details of the claims are made available for a determination to be made. Bursa Malaysia will endeavor to decide on the claim made within a period of six (6) months or otherwise authorised by Bursa Malaysia.

  • What are the documents required upon submitting my claim?

    All documentation in support of the claim must be submitted including but not limited to:

    • The original documents that the stockbroking company / the futures broker has given you, regarding your investments or the related transactions carried out in your securities account
    • Your agreement with the stockbroking company
    • Contract notes/Receipts/CDS statements
    • Cheque drawing records
    • Bank statements
    • To state whether any legal or court action for the said claim and if so, the details for the same.

    If you cannot produce the required documents or if further information is required from you, Bursa Malaysia may contact you for an explanation of events or submission of further material, as the case may be.

    Tip: The more evidence you provide will allow a smoother and faster claims process.

  • How will I know the outcome of my claim?

    Bursa Malaysia shall determine if the claim should be allowed, disallowed or allowed in part and will inform all claimants of its decisions in writing and reasons for disallowance.

    Tip: It is therefore necessary that you keep Bursa Malaysia updated of any changes in the information submitted, i.e. change of address, contact number, amendments to the amount of claims.

  • If my claim is unsuccessful, can I appeal for a re-consideration?

    Yes. You can submit an appeal to the Securities Commission for the claim made against the Compensation Fund of Bursa Securities or the Fidelity Fund of Bursa Derivatives in regard to the claims made before 28 December 2012.

    As for the claim against the Compensation Fund of Bursa Depository, the appeal shall be submitted to the Appeals Committee of Bursa Malaysia.

  • In what form will the compensation be made?

    All compensations will be made by cheque.

  • If my claim is successful, can I nominate a third party to accept the payment on my behalf?

    Claimants are strongly encouraged to collect payments of compensation personally. If you nominate a third party, there must be clear authority in writing, given to the third party. However, Bursa Malaysia shall have the absolute discretion to decide whether or not to accept such authorisation.

  • Can beneficiaries claim on behalf of a deceased Claimant?

    Yes. Beneficiaries can claim if they produce a grant of probate or letter of administration to the satisfaction of Bursa Malaysia