Concerns about PDA impact on Bursa

by **Cals** Tue 26 Nov 2013, 16:27

Business & Markets 2013

Written by Cindy Yeap & Ho Wah Foon of theedgemalaysia.com

Tuesday, 26 November 2013 10:18

KUALA LUMPUR: Dealers and fund managers have expressed concerns about the impact that the Personal Data Act (PDA) 2010 will have on the confidential information of investors stored by the Central Depository System (CDS) that is maintained by Bursa Malaysia.

This comes following a statement by Bursa last week that under the PDA, which came into force on Nov 15, Bursa can share information with third parties ranging from regulators in and outside the country to auditors and any other party that Bursa may see fit inside and outside Malaysia.

Apart from governing bodies such as Bank Negara Malaysia, Securities Commission and the Malaysian Anti-Corruption Commission (MACC), the list also includes Bursa’s licensees, co-organisers of events, business partners and service providers.

An institutional dealer said the positive side of the rules is that it would deter syndicates from manipulating the market.

“If you are a genuine investor and have nothing to hide, you may not be bothered by these new rules.”

However, he said the disbursement of confidential information on investors may be abused.

“The rules should facilitate investigations on wrongdoers but the concern is that personal data might be abused for commercial reasons,” he said.

He recalled that earlier this year, there were investors complaining that they had received unsolicited calls recommending them to buy or sell stocks.

One seasoned deal maker reckoned that the sharing of information in one’s CDS account with parties like the Inland Revenue Board (IRB) may scare away high net worth investors who may not have fully disclosed their wealth.

“It may cause some worries for private investors and discourage retail and high net worth individuals from investing. The IRB can now access information of shareholding and audit those with large holdings of shares,” he said.

He viewed the move as the government tightening the noose on potential tax dodgers in trying to increase revenue.

“But the implication would be that those who are not involved in any wrongdoing would get the jitters. After all, who would be keen on being audited even if they are not involved in financial shenanigans?”

A senior retail dealer expressed concern over the information that can be made available for so many purposes and to various parties.

“How can investors’ CDS information be given out under so many purposes and to so many parties?

“While the stock exchange may want to help to catch wrongdoers and tax-evaders, it must also protect the interests of investors,” he said.

The observer pointed out that some changes stated may already be in practice but rules are now being tweaked as the PDPA comes into force.

According to the Nov 15 statement, by providing Bursa with personal data, he or she has given consent to its usage.

This article first appeared in The Edge Financial Daily, on November 26, 2013.