Compensation Fund

An Overview

1. What is the Compensation Fund?
   The Compensation Fund is established and maintained by Bursa Malaysia pursuant to the Capital Markets and Services Act (“CMSA”) (previously Securities Industry Act 1983) and is applied for the purpose of compensating persons suffering loss in the circumstances as provided under Section 152 of the CMSA.
   
   
2. What monies constitute the monies of the Compensation Fund?
   The Compensation Fund consists of, in the main, contributions by stockbroking companies which are Participating Organizations of Bursa Malaysia and contributions by Bursa Malaysia.
   
   
3. Who is eligible for this Compensation Fund?
   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.
   
   
4. How are claims processed?
   [as prescribed under Part V of  the Capital Markets and Services Regulations 2007 (“CMSR” / “Regulations”), in particular Regulations 17 to 21]
   
   Claimant submits claim in writing and complete Claim Form .
   The Compensation Fund Committee of Bursa Malaysia deliberates on the claim.
   Claimant receives notification from Bursa Malaysia on status of claim.
   If dissatisfied, claimant may appeal within one (1) month to the Securities Commission.
   Claimant collects cheque if claim successful.
   
   
5. What is the claim limit?
   RM100,000 per claim.
   No limit per stockbroking company.
   
   
6. When is the cut-off date for submission of claims?
7. On or before the date specified in the Regulation 17 notice not being earlier than three (3) months after publication of the said notice.
   Within six (6) months from date Claimant becomes first aware of the circumstances as referred to in Section 152 of CMSA.

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 in the CMSA (may be amended from time to time) .
   Whether the claim was in accordance with the provisions of the CMSA / CMSR.
   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,
   Bursa Malaysia Berhad,
   Enforcement Division,
   9th Floor, Exchange Square,
   Bukit Kewangan,
   50200 Kuala Lumpur,
   Malaysia
   
   
3. How soon can my claim be processed?
   The Regulations envisage 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 has given you, regarding your investments
   Your agreement with the stockbroking company
   Contract notes
   Receipts for securities
   Cheque drawing records
   Bank statements
   
   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.
   
   
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 make and 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 client?
   Yes. Beneficiaries can claim if they produce a grant of probate or letter of administration to the satisfaction of Bursa Malaysia.