Supervisory Body

Securities  Commission

• Securities exchange (Bursa Malaysia Securities Bhd)
• Derivatives exchange (Bursa Malaysia Derivatives Bhd)
• Bond Trading (Bursa Malaysia Bonds Sdn Bhd)
• Securities depository (Bursa Malaysia Depository Sdn Bhd)
• Securities clearing house (Bursa Malaysia Securities Clearing Sdn Bhd)
• Derivatives clearing house (Bursa malaysia Derivatives Clearing Bhd)

Labuan Offshore Financial Services Authority

• Offshore exchange (Labuan International Financial Exchange)

Name of Clearing & Settlement Organization

Equities

Bursa Malaysia Securities Clearing Sdn Bhd (wholly owned subsidiaryof Bursa Malaysia) - the Central Counterparty (CCP) for equities clearing & settlement

Derivatives

Bursa Malaysia Derivatives Clearing Sdn Bhd (wholly owned subsidiary of Bursa Malaysia derivatives Bhd) - the CCP for derivatives clearing & settlement

Bonds

Settlement : The settlement is done through the Real Time Electronic Transfer of Funds and Securities (RENTAS) operated by the Central Bank of Malaysia

Offshore Markets (LFX)

Clearing : The clearing function is performed by LFX, which is responsible to notify the Trading Agents.
Settlement : This is performed by Citibank Worldwide Securities Services (CWSS) and Deutsch Bank (Malaysia) Berhad (DBMB)

Settlement Cycle

Equities

T + 3  (Fixed Delivery Settlement System)

Derivatives

Daily settlement to market

Bonds

T + 1 (Tom) for Notes and treasury bills (discount based)
T + 2 (Spot) for Notes, Malaysia Government Securities, Private Debt Securities, Government Investment Issue

Offshore Market (LFX)

T + 3 (Rolling Settlement Cycle)

Name of Central Securities Depository

Equities

Bursa Malaysia Depository Sdn Bhd (wholly-owned subsidiary of Bursa Malaysia)

Offshore Market (LFX)

- Citibank Worldwide Securities Services (CWSS)
- Deutsch Bank (Malaysia Berhad (DBMB))

Commissions on Transactions levied by Exchange

Clearing fees effective from 1st Jan 2008
- On market transaction 
0.03% of transaction value (payable by both and seller) with a maximum of RM1000.00 per contract. No minimum.
- Direct Business transaction 
0.03% of transaction value (payable by both and seller) with a maximum of RM1000.00 and a minimum of RM10.00.

Stamp duty : 
- Primary Market 
Application for subscription for right issues and warrants
- Secondary Market 
Payable on buyer and seller on all securities

Domestic & Foreign : 
1) RM 1 for each RM 1,000 or fractional part of value of securities, subject to maximum capping of RM 200 per contract 
- effective 17/03/2003. 
2) all instruments relating to issue, offer for subscription, purchase of debentures 
(approved by Securities Commission - (SC) section 32 of SC Act) and transfer are exempt from stamp duty. However, transactions in debentures on the secondary market are subject to stamp duty.

There is no capital gains tax. 

Taxes on Dividends, Interests

Tax treatment on dividends

Effective from year of assessment 2008, Malaysia adopted the single-tier tax system which taxes income derived by a company at corporate level and this is a final tax. This system exempts single-tier dividend received by shareholders from tax.

During the six-year transitional period of change from the previous system i.e. the imputation system, any credit balance under section 108 account of the imputation system can still be utilised to set-off with shareholders’ tax liability up to 31 December 2013.

Dividends received or paid by a Labuan company or distributed by a Labuan trust are not subject to tax in the hands of recipients.

Tax treatment on interests

For residents, interest income that is not tax exempt is not subjected to withholding tax but is taxed at the prevailing rates. For non-residents, interest income is subjected to withholding tax at the rate of 15% of gross interest except for cases where rates have been reduced under a tax treaty that Malaysia has entered into with the country of residence of the non-resident. The withholding tax will be deducted at source by the payer.

For any individuals, unit trusts and listed closed-end funds, tax exemption is given on interest paid or credited in respect of:

• Securities or bonds issued or guaranteed by the Malaysian Government; and
• Debentures or Islamic securities, other than convertible loan stock, approved by the Securities Commission.

2011 Share ownership thresholds (%)

Pursuant to the Listing Requirements, an immediate announcement is required to be made where the listed issuer receives any notice relating to substantial shareholding.

As defined in the Companies Act 1965 ("the Act"), a person has a substantial shareholding in a company if he has interest of not less than 5% of the aggregate of the nominal amounts of all the voting shares in the compan ny ("Substantial Shareholder"). The Act requires the person to give notice to the company if the person became a Substantial Shareholder; where there is a change in the interest of the Substantial Shareholder; and where the person ceases to be a Substantial Shareholder of the company.

Short selling (Yes / No)

Yes. Regulated Short-Selling (RSS) was re-introduced on 03 Jan 2007.

Short selling conditions (if any)

Features:
1) List of Approved Securities for Short Selling
2) Designated RSS trading accounts to facilitate monitoring
3) Uptick rule ie. RSS trades can only be keyed-in at a price greater than the last traded price
4) RSS trades (ie gross shorts) limited to 10% of issued shares of security per trading day
5) Regulated under the Securities Borrowing and Lending (SBL) framework