Introduction

1. Overview of the Securities Commission Act 1993

o Brief History: The Securities Commission Act 1993 (SCA 1993) was enacted by the
Malaysian Parliament to establish a statutory body to regulate and develop the capital
market in Malaysia.
o Purpose and Scope: The Act's primary objective is to ensure fair, efficient, and
transparent capital markets, thereby protecting investors and facilitating economic
growth.
o Significance: The SCA 1993 marked a significant step in the evolution of Malaysia’s
financial regulatory framework, enhancing market integrity and investor confidence.
Section 1: Structure and Functions of the Securities Commission
1. Establishment of the Securities Commission
o Creation: The SCA 1993 established the Securities Commission Malaysia (SC) as a
statutory body under the Ministry of Finance.
o Composition: The Commission comprises a chairman and commissioners appointed
by the Minister of Finance, reflecting a balance of expertise in law, finance, and
economics.
2. Functions and Powers of the SC
o Primary Functions: The SC is responsible for supervising the capital markets,
including the regulation of securities, futures, and collective investment schemes.
o Regulatory and Supervisory Powers: The SC has broad powers to make rules, issue
guidelines, and enforce compliance to ensure market integrity and investor protection.
o Market Development: The SC plays a crucial role in promoting market development
and innovation, fostering a competitive and efficient capital market environment.
Section 2: Regulatory Framework
1. Licensing and Registration
o Requirements: Market intermediaries such as brokers, fund managers, and financial
advisers must obtain licenses from the SC, adhering to strict eligibility criteria.
o Procedures: The licensing process involves a thorough assessment of the applicant's
financial stability, management expertise, and compliance history.
2. Market Conduct and Surveillance
o Regulatory Measures: The SC implements various measures to prevent market
abuse, such as insider trading and market manipulation.
o Monitoring Mechanisms: Advanced surveillance systems and regular audits are
employed to detect and deter unethical practices.
3. Enforcement and Compliance
o Enforcement Powers: The SC can impose administrative sanctions, initiate civil
proceedings, and refer cases for criminal prosecution.
 o Penalties and Sanctions: Penalties range from fines and license suspension to
imprisonment for severe violations, ensuring a robust deterrent against misconduct.
Section 3: Case Studies and Practical Applications
1. Case Study Analysis
o Case 1: Analysis of a landmark case involving insider trading, highlighting the SC's
investigative process and legal actions taken.
o Case 2: Examination of a major corporate fraud case, focusing on the SC's role in
uncovering the fraud and enforcing penalties.
o Implications: Discussion on how these cases have shaped regulatory practices and
market behavior.
2. Impact on Market Participants
o Investors: Enhanced protection and confidence due to stringent regulatory oversight.

o Brokers and Fund Managers: Greater accountability and adherence to best

practices, albeit with increased compliance costs.
o Listed Companies: Improved transparency and governance standards, fostering
long-term growth and stability.
Section 4: Comparative Analysis
1. Comparison with International Standards
o U.S. Securities Exchange Act of 1934: Comparison of regulatory frameworks,
enforcement mechanisms, and market impact.
o Key Similarities and Differences: Examination of the approaches to market
regulation and investor protection in both jurisdictions.
2. Lessons and Recommendations
o Best Practices: Identification of effective regulatory strategies from the U.S. and
other markets that could enhance the SC's operations.
o Recommendations: Proposals for legislative amendments, technological upgrades,
and increased international cooperation to bolster the SC's effectiveness.

Conclusion
 Key Findings: Recap of the main points discussed, emphasizing the SCA 1993's role in
shaping Malaysia’s capital markets.
 Overall Impact: Reflection on the Act's success in achieving its objectives and its
contribution to economic development.
 Future Directions: Suggestions for future reforms and initiatives to ensure the continued
growth and stability of Malaysia’s financial markets.