Capital Market Operations and Relief Measures in Response to COVID-19

Capital-Market-Relief-Measures-COVID-19-(banner).png
The Securities Commission Malaysia (SC) has approved several measures to safeguard and support the integrity of the capital market during this period of unprecedented volatility and uncertainty resulting from the broader market impact of Covid-19.

Below are the measures introduced by the SC:
  1. Ensuring Continuous Trading and Market Operations

    The Securities Commission Malaysia (SC), the Exchange and all capital market intermediaries will continue to operate during the Movement Control Order (MCO). The trading hours of the Exchange is as usual from 9:00 a.m. to 5:00 p.m.
  2. Suspension of Short-selling Activities

    Short-selling activities is suspended temporarily until 30 April 2020. It involves intraday short- selling (IDSS), regulated short-selling (RSS), as well as intraday short-selling by proprietary day traders. This temporary suspension does not apply to permitted short selling (PSS).
  3. Broker’s Margin Financing Flexibilities

    Brokers may, at their discretion, not make margin calls or impose haircuts on any collateral and securities purchased and carried in margin accounts. They are also empowered to exercise discretion whether or not to impose force selling measures on clients.

    The SC has also approved a broader list of accepted collaterals for margin financing. With this flexibility, brokers can now accept other collaterals, such as bonds, unit trusts, gold and immovable properties to maintain their clients’ margin accounts, and value these collaterals accordingly.

    All the above, which takes effect 27 March - 30 September 2020, are subject to brokers meeting their own capital adequacy ratio and shareholder funds as required by Bursa Malaysia. They are also expected to exercise discretion in accordance with their own credit risk policies.

    Meanwhile, to facilitate compliance with the Movement Control Order (MCO), brokers, trading participants, clearing participants and authorised depository agents are encouraged to operate shorter counter service hours for their clients.
  4. Waiver of The SC Annual Licensing Fees for Year 2020

    The Securities Commission Malaysia has announced a waiver of the SC annual licensing fees for year 2020 on the core regulated activity of all Capital Markets Services Licence (CMSL) entities with Profit Before Tax of RM5 million or less during Financial Year 2019. This waiver will benefit 231 licensed entities.

    A waiver for all individual CMSL holders and Capital Markets Services Representative’s Licence (CMSRL) holders is also introduced, which will benefit 9,663 licensed individuals.

    A qualifying CMSL entity who has already made the payment prior to the announcement will be offered a credit to offset next year’s licensing fees.
  5. Waiver of Listing-Related Fees for 12 Months

    Both the SC and Bursa Malaysia have agreed to waive all listing related fees for a period of 12 months for companies with market capitalisation of less than RM500 million seeking listing on the Main Market, as well as for companies seeking to list on the LEAP and ACE Markets. Further details can be found on Bursa Malaysia website.
  6. Flexibilities for Listed Issuers
     
    1. Deferment of Annual General Meetings
      Public listed companies (PLC’s) are entitled to apply for deferment of dates of Annual General Meetings (AGMs) with the Companies Commission Malaysia (SSM), beyond the prescribed 6-month period as stipulated under the Companies Act 2016. More information on the deferment can be found at the SSM website.

      The SC also has granted a two-month extension for REITs managers of listed REITs with a financial year-end of 31 December 2019 to hold AGMs by 30 June 2020.
    2. One Month Extension for Issuance of Periodic Reports
      One-month extension for issuance of periodic reports for Main and ACE markets on the issuance of quarterly reports and annual reports, due by 31 March 2020 and 30 April 2020. For LEAP market, the extension is for issuance of semi-annual and annual audited financial statements, due on 31 March 2020 and 30 April 2020.

      Information on the extension of time can refer to Bursa’s announcement dated 17 March 2020 and 26 March 2020 at www.bursamalaysia.com.
    3. Deferment of Regulatory Filings and Submissions
      The Securities Commission Malaysia (SC) is extending deadlines for market participants who are required to comply with the regulatory filings and submissions to the SC.
    4. For further details, please visit the SC website at https://www.sc.com.my/regulation/technical-notes-and-practice-notes/circular-to-capital-markets-services-licence-holders or email [email protected] for clarification.
  7. Providing Training and Examination Flexibilities
     
    1. Reduction in The Minimum Training Requirements
      The minimum Continuing Professional Education (CPE) requirements is reduced to 10 CPE points from 20 CPE points effective 1 July 2020 for a period of 12 months for all CMSRL holders and Employees of Registered Persons (ERPs).

      The minimum training requirements is also reduced to three days from the current five days effective 1 July 2020 for a period of 12 months for Trading Representatives and Marketing Representatives.
    2. One-Off Training Subsidy for Audit Oversight Board Registered Firms
      The one-off training subsidy is applicable for existing registered firms of Audit Oversight Board (AOB) with less than 10 audit partners, up to RM30,000 per firm for Approved Training Programmes conducted by the Malaysian Institute of Certified Public Accountants (MICPA).
    3. Postponements of SIDC Courses, Familiarisation Programmes and SC Licensing Examinations
      Course participants and examination candidates are allowed to roll-over fees paid to future dates without any penalty. They are also entitled for refunds without any penalty for course withdrawals or date deferments for SC Licensing examinations. Participants will be informed of new exam dates.
    4. Further queries regarding above can email to [email protected].
  8. PRS Pre-Retirement Withdrawals

    PRS members below 55 years old can withdraw up to RM 1,500 per provider from their sub-account B. Withdrawals are exempted from tax penalty effective 30 April – 31 December 2020. Applications for the pre-retirement withdrawals can be submitted to respective PRS Provider(s).

    Any queries regarding above can be emailed to Private Pension Administrator (PPA) Malaysia at [email protected] or reach them via mobile at 1300-131-772.
More information and clarification on the measures can be found on the Securities Commission Malaysia (SC) website at www.sc.com.my/covid-19 or reach via email at [email protected] or [email protected].

CAPITAL MARKET FREQUENTLY ASKED QUESTIONS RELATED TO COVID-19

Part I: Market Trading and Operations
  1. Is the capital market open during the MCO?
     
    • Yes, the capital market, as an essential financial services, will operate as usual to support the economy, listed companies and investors, throughout the MCO.
    • The Securities Commission Malaysia (SC) and all capital market intermediaries including Bursa Malaysia Bhd (Bursa) will continue to operate as normal but all provision of services and movement of staff members will be adjusted to comply with the MCO.
    • Trading hours of the exchange remain the same, from 9:00am to 5:00pm (mid-day break 12.30pm to 2:30pm) from Monday to Friday.
    • The SC will closely monitor the exchanges, institutions and capital market intermediaries and their activities, to ensure they continue to effectively facilitate transparent, fair and orderly capital market activities.
    1. Useful link: Media release                                                                                                        
    2. SC: Capital Market to Operate as Usual
  2. What measures are in place to ensure that the market continues to operate in a fair and orderly manner?
     
    • The SC and Bursa have business continuity measures in place, including backup sites, recovery facilities and alternative communications channels to operate the market in a crisis situation.
    • Robust market management measures (e.g. circuit breakers, static and dynamic price limit) are in place to manage excessive volatility.
    • Healthy clearing funds, margins and deposits levels are in place to ensure clearing and settlement risks are managed.
    • The SC and Bursa are monitoring ongoing developments to proactively manage risks in the marketplace and will introduce additional precautionary measures as appropriate.
    1. Useful link: Media release                                                                                                        
    2. SC: Capital Market to Operate as Usual
    3. Continued, Reliable Access to the Malaysian Capital Market is Vital for Immediate and Long-Term Market Confidence
  3. I work in one of the intermediaries. The MCO requires everyone to stay at home to prevent the spread of Covid-19. How can this be achieved if the markets remain open and intermediaries have to operate?
     
    • All capital market intermediaries have in place business continuity frameworks to ensure the continuity of their business in times of crisis. As part of their pandemic response plan, intermediaries should implement social distancing measures.
    • Employees in non-critical functions are required to work from home.
    • Only employees involved in providing essential financial services or critical operations necessary to support the provision of essential financial services may be required to be physically present within a place of business.
    • Employers can also consider split teams where some employees would work from the office while others work from home to minimise interaction.
    • In accordance with MCO requirements, employees who are required to work at the office must be issued a verification letter or work travel pass by the employer.
  4. What is the scope of the short selling suspension?
     
    • The SC and Bursa have temporarily suspended short selling until 30 April 2020
    • The suspension will apply to intraday short selling (IDSS) and regulated short selling (RSS), as well as intraday short selling by proprietary day traders.
    • It does not apply to permitted short selling (PSS), which is short selling activities for Exchange Traded Funds (ETF).
    1. Useful link: Media release                                                                                                        
    2. SC and Bursa Suspend Short-Selling Amid Covid-19 Volatility
Part II: Covid-19 Relief Measures
  1. What are the relief measures for capital market participants during this period?

     
    • To ease the cost burden of capital market participants, the SC announced several relief measures on 24 March 2020 that will immediately benefit 231 licensed entities, 30 registered audit firms and 9663 licensed individuals.
    • These measures complement the wider relief effort under the Economic Stimulus Package 2020 (ESP 2020) announced by the Government on 27 February 2020.
    1. Useful link: Media release                                                                                                        
    2. SC Announces Further Relief Measures for Capital Market Licensed Entitie
    3. For holders of Capital Markets Services Licence (CMSL) and Capital Markets Services Representatives Licence (CMSRL)
    • Waiver of the SC’s annual licensing fees for 2020 on the core regulated activity1  of all CMSL entities with Profit Before Tax of RM5 million or less during Financial Year 2019.
       
      1. A qualified CMSL entity which has already made the payment prior to the announcement on 24 March will be offered a credit to offset against next year’s licensing fees. This amount will be credited into their respective accounts in the Electronic Licensing Application (ELA) system but processing fee remains applicable and chargeable.
    • Waiver of the annual licensing fees for the Year 2020 for all individual CMSL holders and CMSRL holders.
       
      1. Individual CMSL holders and CMSRL holders (including Trading Representatives) who have made the payment prior to the announcement on 24 March will be offered a credit to offset next year’s licensing fee. This amount will be credited into their respective accounts in the Electronic Licensing Application (ELA) system but processing fee remains applicable and chargeable.
    • Reduction of the minimum Continuing Professional Education (CPE) requirements from the current 20 CPE points to 10 CPE points effective 1 July 2020 for a period of 12 months for all CMSRL holders and Employees of Registered Persons (ERPs).
       
      1. This will ease the burden of CMSRL holders and ERPs whose licence anniversary date or cycle period falls between 1 July 2020 and 30 June 2021. Individuals who have collected more than 10 CPE points prior to their licence anniversary date in the second half of 2020, may carry forward their excess points to the next anniversary period. For example, Person A and Person B shares the same anniversary date of 15 August 2020. To date, Person A has collected 5 CPE points, while Person B has fulfilled the 20 CPE points. Person A will be required to collect the remaining 5 CPE points by the anniversary date of his licence. Person B will be allowed to carry forward the excess of his 10 CPE points to the next anniversary or cycle period.
      2. Licensed intermediaries and registered persons are expected to monitor and ensure that their representatives comply with the CPE requirement.
    • Reduction of the minimum training requirements to three days from the current five days, effective 1 July 2020 for a period of 12 months for Trading Representatives and Marketing Representatives
    1. For Public-Listed Companies (PLCs)
    • Waiver of all listing related fees for a period of 12 months for companies with market capitalisation of less than RM500 million seeking to list on the Main Market.
    • Waiver of all listing related fees for a period of 12 months for companies seeking to list on the LEAP and ACE Markets.
    1. Please refer to the Circular entitled The Economic Stimulus Package 2020 - Waiver of Fees and Charges issued by Bursa Malaysia on 3 March 2020 for further details of these measures.
    2. For Audit Oversight Board
    • One-off training subsidy for existing registered firms of Audit Oversight Board (AOB) with less than 10 audit partners, up to RM30,000 per firm for Approved Training Programmes conducted by the Malaysian Institute of Certified Public Accountants (MICPA).
    1. For Participating Organisations / Brokers
    • Margin financing flexibilities for brokers and investors
       
      1. Effective 27 May until 30 September 2020, brokers may, at their discretion, not make margin calls or impose haircuts on any collateral and securities purchased and carried in margin accounts.
      2. Previously, brokers were required to automatically liquidate clients’ margin accounts if the equity in those accounts falls below 130% of the outstanding balance. Brokers may avail themselves of this flexibility and modification provided they can comply with their own capital adequacy ratio and shareholder funds as required by Bursa Malaysia.
      3. Brokers can now accept other collaterals, such as bonds, unit trusts, gold and immovable properties to maintain their clients’ margin accounts, and value these collaterals accordingly.
    • Brokers, trading participants, clearing participants and authorised depository agents are encouraged to operate shorter counter service hours for their clients.
    1. Useful link: Media release                                                                                                        
    2. Margin Financing Flexibilities for Capital Market Participants
    3. 1 For entities licensed for more than one regulated activities, core activity means the activity that the intermediary is primarily licensed for.
  2. What other flexibilities are given to licence holders?
     
    • The SC have also accorded several regulatory reporting reliefs to licensed persons and other stakeholders which were communicated on 20 March 2020.
    • Details of the various reliefs can be obtained at the link below.
    1. Useful link: Media release                                                                                                        
    2. SC Grants Regulatory Flexibilities for Market Participants
  3. Can PLCs hold their AGMs after the six-month period from the close of their financial year?
     
    • Pursuant to a statement issued by Companies Commission Malaysia(SSM) on 16 March 2020, PLCs may apply to defer their Annual General Meetings (AGMs) with the SSM, beyond the prescribed 6-month period as stipulated under the Companies Act 2016.
    • In addition, the SC has granted a 2-month extension for Real Estate Investment Trust (REITs) managers of listed REITs with financial year-end of 31 December 2019 to hold their AGMs by 30 June 2020.
    • Listed issuers are reminded to comply with their continuing disclosure obligations under the Listing Requirements including the obligation to make immediate announcements of any material information to ensure that shareholders and investors continue to receive information in a timely manner.
  4. Can PLCs defer the announcement of quarterly or annual reports?
     
    • Listed issuers are granted an automatic one-month extension for issuance of quarterly and annual reports for the Main and ACE Markets, as well as semi-annual and annual audited financial statements for the LEAP Market, that are due on 31 March 2020 and 30 April 2020.
    • More information on the extension of time can be found in Bursa’s announcements dated 17 March 2020 and 26 March 2020 at www.bursamalaysia.com
    1. Useful link: Media release                                                                                                        
    2. SC Grants Regulatory Flexibilities for Market Participants
Part III: Investors
  1. Can I still open an investment account during MCO?
     
    • Yes, but this is subject to the investor meeting all relevant eligibility criteria, and terms and conditions set by the brokers, trading participant or fund managers (Investment Service Providers).
    • Certain Investment Service Providers may have in place arrangements that facilitate an account to be opened online.
  2. Will I be able to access my CDS, Unit Trust and investment account?
     
    • Yes, you can access your investment accounts as usual, through the online or digital channels provided by your investment service providers.
    • Please check the respective websites or call the Investment Service Provider’s customer service lines to obtain further information on your accounts.
  3. Will I still be able to obtain regular updates / statements on my investment products i.e. unit trust, shares?
     
    • Unit trust management companies remain fully operational and are expected to provide their services as usual.
    • You are encouraged to contact your unit trust management company should there be any delay in receiving your statements.
  4. Can I still trade my investment products as usual?
     
    • Yes, trading activities continue as usual during the MCO.
    • Please check the respective websites or call the Investment Service Providers’ customer service lines to obtain further information.
  5. Can I continue to lodge enquiries or complaints to the SC regarding my investments in the capital market?
     
    • The SC’s walk-in complaints service has been suspended for the time being due to the MCO. However, members of the public can continue to email their enquiries or complaints to us at [email protected]. The Consumer and Investor Office will continue to respond to your inquiries and attend to the complaints filed.
    • Alternatively, you can call our Aduan hotline at +603 6204 8999 (9.30am-5.30pm Monday to Friday).
    • General public enquiries can be emailed to [email protected].
  6. Is SIDREC still operational during this time?
     
    • Yes, SIDREC is still operational at this time although walk-in services have been suspended in view of the MCO
    • Investors are advised to contact SIDREC via telephone at +6016-620 5698 or email at [email protected]
  7. Where can I learn more about capital market products and services, and anti-scam awareness during this period?
     
    • The SC, through its InvestSmart®’s initiatives, continues to provide regular updates and information to ensure investors are informed and able to make investment decisions that are appropriate for them.
    • For more information, you may visit www.investsmartSC.my, download InvestSmart® mobile application or follow InvestSmart® on Instagram, Facebook and Twitter.
    • The public is advised to be extra cautious of scams and illegal schemes during this difficult time. There are unscrupulous parties who may be waiting to take advantage of unsuspecting individuals. Always deal only with licenced/ registered person before you part with your money to purchase any capital market products
    1. Useful link: Licensing                                                                                                        
    2. Licensed and Registered Persons
PRS Pre-Retirement Withdrawals that are Exempted from Tax Penalty
  1. Who is eligible to apply for pre-retirement withdrawal from sub-account B that is exempted from the tax penalty?
     
    • All PRS members below the age of 55 years old are eligible to apply for this withdrawal.
    • There are no restrictions for members aged 55 years old and above to make withdrawals of any amount under any circumstances.
  2. When can I submit the application for the pre-retirement withdrawal from sub-account B that is exempted from the 8% tax penalty?
     
    • Members can submit applications starting from 30 April 2020 to their PRS Provider. The temporary tax penalty exemption is effective till 31 December 2020.
  3. What is the maximum withdrawal amount I can make for this temporary relief?
     
    • Members may request for withdrawal from one or more funds managed by each PRS Provider up to a maximum amount of RM1,500 per Provider.
    • In order to assist PRS contributors, below is the list of PRS Providers and their contact details:

      PRS Provider

      Contact Details

      Affin Hwang Asset Management Bhd

      Tel: 603 – 2116 6000
      Email: [email protected]
      WhatsApp: 012-6068685

      AIA Pension and Asset Management Sdn. Bhd

      Tel: 603-2056 1027 & 603-2056 1026
      Email: [email protected]

      AmFunds Management Bhd

      Tel: 603 – 2032 2888
      Email: [email protected]

      Kenanga Investors Bhd

      Tel: 1-800-88-3737
      Email: [email protected]
      Web: www.kenangainvestors.com.my

      Manulife Investment Management (M) Bhd
      (formerly known as Manulife Asset Management Services Bhd)

      Tel: 603-2719 9271
      Email: [email protected]

      Principal Asset Management Bhd
      (formerly known as CIMB-Principal Asset Management Bhd)

      Tel: 603 – 7718 3000
      Fax: 603 – 7718 3003
      Email: [email protected]
      Web: www.principal.com.my
      Customer care centre: 50,52 & 54 Jalan SS21/39 Damansara Utama 47400 Petaling Jaya Selangor

      Public Mutual Bhd

      Hotline: 603 – 2022 5000
      Email: [email protected]mutual.com.my

      RHB Asset Management Sdn. Bhd

      Tel: 603 – 9205 8000
      Hotline: 1-800-88-3175
      Email: [email protected]

  4. How long would it take for a pre-retirement withdrawal request to be processed?
     
    • Completed pre-retirement withdrawal request will be processed within 10 business days after the PRS Provider receives a completed request.
  5. How many times can withdrawals be made from each PRS Provider?
     
    • Members may withdraw once from each PRS Provider during the exemption period.
  6. Can I request to withdraw all the amount in sub-account B from one or more PRS Providers?
     
    • Yes, members may request to withdraw all amounts from sub-account B of more than one PRS Provider. However, for withdrawals above RM1500, the balance will attract an 8% tax penalty.
    1. Scenario
    2. Member has the following PRS accounts:PRS-(1).png
    3. Under this scenario, the member is allowed to withdraw the full amount from sub-account B of Provider A as it is below the RM1,500 limit. For withdrawal from Provider B, if a member withdraws RM1,500, no penalty will be imposed during the exemption period. The additional RM500 if withdrawn will attract the 8% tax penalty as it exceeds the RM1,500 limit from sub-account B.
    • If you have any further enquiries, please contact your PRS Provider or the Private Pension Administrator Malaysia at [email protected] or call 1300-131-772.
  7. Must I disclose a reason for withdrawal under this temporary relief?
     
    • No, there is no requirement for members to make any disclosure on the reasons for the pre-retirement withdrawal.
    • While this temporary exemption from payment of the tax penalty is provided in the short run, members are encouraged in the long run to continue to save for their retirement.
Part IV: Capital Market Intermediaries
  1. How can issuers and principal advisers (PA) undertake the necessary filing of regulatory documents to the SC such as corporate proposals, information memorandum among others?
     
    • During the MCO period, all issuers and PA are advised to make online submissions to the SC.
    • Softcopy submissions to Equities Department can be filed via email to [email protected].
    • Hard copy of the submissions must be submitted to the SC within 5 market days after the MCO is lifted.
    • pplications submitted electronically to Managed Investment Schemes Department that are complete will be processed according to the existing time charter.
  2. What is the status of corporate and fund proposals? Is there any change to the time charter?
     
    • No, there is no change to the time charter. The SC continues to process all submitted corporate proposals and will respond to the principal advisers within the stipulated operating timeline.
  3. How can I get more information about matters relating to Managed Investment Schemes?
     
    • Please refer to “Appendix MIS – FAQs on Operational Matters during MCO” available at www.sc.com.my/covid-19. This document will be updated from time to time. All updates and revisions will be dated for easy reference. You are encouraged to regularly check this document.
Unit Trusts & PRS
  1. Can I still market and distribute Unit Trust / PRS?
     
    • Yes. Intermediaries are still allowed to market and distribute their products but they are required to adhere to the MCO, especially with regard to the restricted movement of individuals, and other related directives/advisories.
    • Distributors should explore other non face-to-face avenues to engage with investors such as phone calls and online platforms, and to increase investors’ awareness on the availability of such alternative avenues.
Trainings and examinations
  1. What are the arrangements for courses, Familiarisation Programmes and SC Licensing Examinations conducted by SIDC during the MCO? Can I seek a refund?
     
    • Courses, familiarisation programmes and SC licensing examinations conducted by SIDC during the MCO period are currently put on hold.
    • SIDC is contacting those who have registered to inform them of the postponements and changes in schedules.
    • New dates will be published on www.sidc.com.my once the MCO is lifted.
    • Course participants and examination candidates will be allowed to roll-over fees paid to future dates without any penalty.
    • Course participant are also entitled to cancel their applications and SIDC will arrange for refunds upon request without any penalty.
    • For SC Licensing Examinations, affected candidates are allowed to defer the examinations without incurring any penalty. Similarly, refunds may be arranged upon request without penalty. The Secretariat will be in touch with affected candidates on new examination dates via email.
    • Queries can be emailed to [email protected]
Part V: Others
  1. I am a witness in one of SC’s cases. Will I have to go to court in view of the MCO?
     
    • The Chief Registrar of the Federal Court has issued circulars to the effect that all hearing for civil and criminal trials from 18 March to 14 April 2020 will be adjourned to another date which will be notified.
    • However, the circulars also explained that certain court proceedings or filing of cause papers may proceed subject to conditions determined by the court. For further details, please refer to related circulars below:
    • Circular 1
    • Circular 2
Sources: https://www.sc.com.my/covid-19


Disclaimer

This report has been prepared and issued by Bond and Sukuk Information Platform Sdn Bhd (“the Company”). The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile.
 
The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, the Company does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.
Stay on top of what’s happening in bond and sukuk markets.
Enter security code:
 Security code
 

Sign up to receive update on BIX Malaysia articles and tutorials or you can Read Our Last Edition »