ENFORCEMENT
Enforcement Approach
In enforcing breaches of our rules, we strive to ensure that our processes and actions are effective and timely, fair, independent and transparent. To this end, our enforcement approach encapsulates the following:-
- Prioritisation of our enforcement actions on serious/material breaches of the rules (i.e. breaches which have significant/material impact to the market)
- Greater emphasis on director enforcement in respect of breaches of the Listing Requirements by listed issuers
- Ensure fair, independent and efficient processes
- Where possible, enhanced transparency of enforcement
Due process, independence of decision-making and rights of a defaulting party
In undertaking enforcement action, principles of natural justice and due process will be adhered to/accorded where the parties subject to enforcement are accorded fair hearing i.e. they are given an opportunity to provide explanation and procure legal representation. Enforcement decisions for serious/material breaches will be made by the relevant regulatory committees of Bursa Malaysia comprising the Market Participants Committee (breaches of Business Rules), Listing Committee (breaches of Listing Requirements) and Appeals Committee (appeals against first instance decision of Market Participants Committee and Listing Committee). These regulatory committees are independent as the members of these committees essentially consist of independent external parties/industry experts with diverse practitioner experience in various areas of the capital market.
Factors taken into consideration in deciding enforcement actions/penalties
In deciding the appropriate actions/penalties to be imposed for a breach of our rules, a variety of factors are taken into consideration. These factors include:
- nature and impact of the breach:
- disciplinary history/antecedent character and background as well as conduct of the defaulting party:
- circumstances and manner under which the breach was committed:
- mitigating and aggravating factors: and
- public interest/deterrent element of the proposed penalty.
As such, depending on the assessment of these various factors in respect of the facts and circumstances of each individual case, the enforcement proceedings may differ (i.e. expedited enforcement proceedings or full enforcement proceedings) and the actions/penalties imposed may also vary even for the same/similar breach by different parties.
Under the Listing Requirements, enforcement action can be initiated against directors who are found to have contravened specific obligations imposed on the directors or where there is a breach committed by the listed issuers and the said director is found to have caused, aided, abetted or permitted the commission of the breach by the listed issuer. In ascertaining whether the director has caused, aided, abetted or permitted the listed issuer’s breach, Bursa Malaysia will examine the culpability of each director including the discharge of the director’s fiduciary duties (i.e. duty of care, skill and diligence) to the listed issuer based on documentary evidence and representations made.
Types of Penalties
The types of penalties that may be imposed by Bursa Malaysia under its rules include the following:-
- Reprimand (private or public)
- Fines
- Remedial actions (e.g. mandatory training, limited review of financial statements)
- Suspension
- De-listing (against listed issuers) or striking off/termination of participantship
Transparency of Enforcement to the Market
In this regard, we disseminate and share relevant key information pertaining to enforcement to the market with the view of enhancing the effectiveness of our enforcement actions. With greater transparency of our enforcement approach as well as decisions/actions, we hope that the market is aware and understands the enforcement actions taken by Bursa Malaysia. The transparency of enforcement is accomplished through, amongst others, publication of our public enforcement actions as well as posting of our Key Enforcement Cases on Bursa Malaysia’s website.
In addition, we have also issued the Communication on Bursa Malaysia’s Enforcement/Disciplinary Proceedings & Processes (ICON-DP) on 30 August 2017 which provides an overview of the enforcement/disciplinary proceedings and processes applicable under the Business Rules and Listing Requirements. This is aimed at providing greater transparency and clarity on Bursa Malaysia’s enforcement/disciplinary proceedings and processes, thus enhancing market/industry understanding of the same.
Consultation with the Securities Commission on Enforcement
In initiating and undertaking enforcement, where necessary Bursa Malaysia consults the Securities Commission to ensure effective regulation of the capital market. This is particularly pertinent when there is a contravention of both the rules of Bursa Malaysia and the law under the purview of the Securities Commission. In such circumstances, Bursa Malaysia will consult the Securities Commission as to the appropriateness of initiation of enforcement action by Bursa Malaysia.