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Bursa Malaysia
 

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In the interest of protecting investors, three (3) separate compensation funds are 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.

An Overview

  1. 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 Malaysia Securities Berhad ("Bursa Securities"), pursuant to the Capital Markets and Services Act (“CMSA”) (previously Securities Industry Act 1983) and is applied for the purpose of compensating persons suffering monetary loss in the circumstances as provided under Section 152 of the CMSA;
    2. the Fidelity Fund of Bursa Malaysia Derivatives Berhad (“Bursa Derivatives”), pursuant to the CMSA and is applied for the purpose of compensating persons suffering monetary loss in the circumstances as provided under Section 167 of the CMSA; 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.

  2. Who is eligible for claim under the compensation funds?
    Claim under the Compensation Fund of Bursa Securities:

    Persons who have suffered monetary loss (“Claimant”) as envisaged under Section 152 of the CMSA because of:
    A defalcation or fraudulent misuse of monies or other property by a director, officer, employee or representative of a holder of a Capital Markets Services Licence who carries on the business of dealing in securities that is at that time a participating organization (“PO”); or
    An insolvency of a PO,
    and the loss is suffered in respect of monies or other property that was, in connection with the PO’s dealing in securities, entrusted to or received by the PO, or by a director, officer, employee or representative of the PO for or on behalf of the Claimant or another person, or because the PO was trustee of the monies or other property.

    Claim under the Fidelity Fund of Bursa Derivatives:

    Persons who have suffered monetary loss (“Claimant”) as envisaged under Section 167 of the CMSA because of:
    A defalcation or fraudulent misuse of monies or other property by a director, officer, employee or representative of a holder of a Capital Markets Services Licence who carries on the business of trading in futures contracts that is at that time an affiliate of the futures exchange (“TP”)

    and the loss is suffered in respect of monies or other property that was, in connection with the TP’s trading in futures contracts, entrusted to or received by the TP, or by a director, officer, employee or representative of the TP for or on behalf of the Claimant or another person, or because the TP was trustee of the monies or other property.

    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.

  3. How are claims processed?
    [for the Compensation Fund of Bursa Securities as prescribed under Part V of the Capital Markets and Services Regulations 2007 (“CMSR” / “Regulations”), in particular Regulations 17 to 21 whereas for the Fidelity Fund of Bursa Derivatives as prescribed under Part VI of the CMSR, in particular Regulations 27 to 31]
    Claimant submits claim in writing and complete the relevant claim form : Claim Form (for claim against Compensation Fund of Bursa Securities), Claim Form (for claim against Fidelity Fund of Bursa Derivatives) and 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, the Claimant may appeal within one (1) month to the Securities Commission, in regard to the claim against the Compensation Fund of Bursa Securities or the Fidelity Fund of Bursa Derivatives. 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.

  4. What is the claim limit?
    For the claim made against the Compensation Fund of Bursa Securities : RM100,000 per claim and no limit per stockbroking company.
    For the claim made 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.

  5. When is the cut-off date for submission of claims?
    For the claim made against the Compensation Fund of Bursa Securities or the Fidelity Fund of Bursa Derivatives:
    On or before the date specified in the Regulation 17 notice (for the claim against the Compensation Fund of Bursa Securities) and Regulation 27 notice (for the claim against the Fidelity Fund of Bursa Derivatives) not being earlier than three (3) months after publication of the said notice.
    If no notice published, within six (6) months from date Claimant becomes first aware of the circumstances as referred to in Sections 152 / 167 of CMSA.

    For the claim made against the Compensation Fund of Bursa Depository, the timeframe for the submission of claim is guided by the timeframe for the submission of a claim under the Compensation Fund of Bursa Securities and the Fidelity Fund of Bursa Derivatives.

Questions & Answers for Claimants

  1. 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.

  2. How do I submit a claim to the Compensation Fund?
    Claims must be submitted on or before the cut-off date to:

    The Secretariat,
    Compensation Fund of Bursa Malaysia Securities Berhad / Fidelity Fund of Bursa Malaysia Derivatives Berhad / Compensation Fund of Bursa Malaysia Depository Sdn Bhd (state whichever compensation fund is applicable)
    Bursa Malaysia Berhad,
    Enforcement Division,
    9th Floor, Exchange Square,
    Bukit Kewangan,
    50200 Kuala Lumpur,
    Malaysia

  3. How soon can my claim be processed?
    The Regulation envisages that the determination of a claim shall be made within a period of six (6) months or otherwise authorised by Bursa Malaysia.
     
  4. 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 for securities / futures contracts
    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.

  5. 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.

  6. 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. As for the claim against the Compensation Fund of Bursa Depository, the appeal shall be submitted to the Appeals Committee of Bursa Malaysia.
     
  7. In what form will the compensation be made?
    All compensations will be made by cheque.

  8. 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.

  9. 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

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