Bursa sets record straight on remisiers issues

PETALING JAYA: Liberalisation of brokerage fees is the way forward for the Malaysian securities industry, Bursa Malaysia Securities Bhd says in response to concerns raised by the Remisiers’ Association of Malaysia, or Persama.

“Exchanges globally are moving towards liberalisation of brokerage fee. In tandem with this trend, the brokerage in Malaysia too was liberalised in 2002,” the stock market regulator told StarBiz in a statement.

“Through this liberalisation, the securities industry will be encouraged to innovate in line with technology evolution,” Bursa said, adding that embracing technology had enabled participating organisations to disseminate market information and communicate efficiently to a wider spectrum of investors.

On that note, Bursa clarified that the country did not have a brokerage-fee framework that Persama claimed was unhealthy for the market.

To recap, Persama on Monday issued a press statement voicing its concerns over what it claimed to be a “disorderly brokerage rate” as creating an uneven playing field that favoured high-frequency trading, thus making stock prices very volatile.

The association, which represents more than 900 remisiers in Malaysia, also said the “undercutting-rate” practice was “anti-competition”, benefiting only the big banks, while squeezing out remisiers/dealers.

In addition, Persama said the survival of the local remisier industry was also under threat because of the rising number of financially distressed counters as well as a possible abuse of the new personal data protection rules.

According to Bursa, there was no serious surge in the number of companies that triggered the criteria of Practice Note 17 (PN17) or Guidance Note 3 (GN3) as claimed by Persama.

“Year to date, a total of 16 companies have triggered the criteria of PN17/GN3, compared with 14 companies in 2012.”

“The number of companies that were delisted as a result of failure to comply with the PN17/GN3 obligations pursuant to Bursa’s Listing Requirements has decreased in 2013, compared with 2012. In 2013, a total of three companies were delisted, compared with nine companies in 2012,” it added.

Persama in its statement claimed argued that more than 350 listed companies had been classified as PN17 firms in recent years, with more than 150 delisted.

On personal data protection, Bursa Malaysia stressed that Section 43 of the Securities Industry (Central Depositories) Act 1991 (SICDA) governs the confidentiality of information and documents relating to the affairs of the depositor (CDS information).

“Disclosure of CDS information is only allowed under circumstances specified in Section 45 of SICDA, for example, to persons duly authorised to investigate into any offence where the disclosure is in respect of the securities account and affairs of the depositor suspected of the offence.

“Therefore, in respect of CDS information, Bursa Malaysia Depository Sdn Bhd will only disclose the same if permitted by Section 45 of SICDA” it said .