Page 58 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

Enhancing regulatory framework for Pre-emptive measures through cease
capital market services providers and desist directives

In 2018, the SC introduced a registration The SC also issues cease and desist directives to
framework for capital market services providers with entities and individuals who are suspected of
the release of the Guidelines on Registration and carrying out illegal schemes or unlicensed activities.
Conduct of Capital Market Services Providers (CMSP Where necessary, the cease and desist orders were
Guidelines). Under these new guidelines, all trustees accompanied by media releases to ensure the
and issuing houses are required to register with the public is sufficiently warned about these illegal or
unlicensed schemes or activities.
SC effective 2 January 2019.

In 2018, the SC issued five cease and desist orders:
The new registration framework streamlines the
requirements and introduces registration criteria
such as entry standards and ongoing conduct January
obligations to create a level-playing field among • CopyCash Foundation was directed to
trustees. To enhance efficiency, the new CMSP immediately cease all its activities including a
Guidelines will implement a one-time registration purported plan to launch an ICO in Malaysia.
instead of the current product-based registration,
which requires trustees for unit trust funds to renew April & May
registration periodically. • AlgoMerchant and Dagang Algomecs were
directed to cease providing trading solutions and
The new registration framework is consistent investment strategy to investors.
with the SC’s efforts to ensure proportionality
in regulation and realigning the SC’s regulatory • These activities fall within the definition of
providing investment advice, dealing in securities
approach in order to enhance capital market and/or fund management under Schedule 2 of
efficiency. It also seeks to ensure that capital market the CMSA.
services providers prioritise investors’ interest in all
their decision-making processes. The framework July
places greater emphasis on the responsibilities
of board and management by holding them • Lendingstar Malaysia was directed to cease its
activities of operating a recognised market and
accountable for the conduct of the registered providing automated trading facilities as these
entities and their representatives. activities require registration with or a licence
from the SC under the securities laws.

PuRSuInG cREdIBLE dETERREncE September
THRouGH EnFoRcEMEnT
• Lavidacoin was directed to cease all promotional
activities pending further review.
Enforcement remains an integral part of the
SC’s ongoing efforts to instil a culture of good • A media release from the SC reminded investors
governance. The SC’s enforcement approach is to be cautious and exercise due diligence
premised on achieving credible deterrence through before participating in any investment schemes
the exercise of its administrative, civil and criminal particularly those involving cryptocurrencies and
digital tokens.
powers.

48 | PART 2 »» SHAPING MARKET CONDUCT

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