The Malaysian stock market and its regulators

Section 1 questions test whether you can put each player in the right box: the SC and its Shariah Advisory Council under the SCMA, the Minister's approvals under the CMSA, Bursa Malaysia Berhad and its subsidiaries, the central depository under SICDA, SIDREC and the Capital Market Compensation Fund, Bank Negara and the Companies Commission. Expect short scenarios that ask who approves, who decides or who pays, plus a few on the three boards, dealer's representatives and online trading security. In an open-book exam the marks go to candidates who know which Act or rule to open.

8 min read6 sections

Securities Commission Malaysia Act 1993 (Act 498, as amended to Act A1539/2017; amendment list checked on sc.com.my); Capital Markets and Services Act 2007 (Act 671, SC consolidated text incorporating amendments in force 1 January 2026); Securities Industry (Central Depositories) Act 1991; Rules of Bursa Malaysia Securities (Chapters 5, 7, 16 and Schedule 1) and PO Circular R/R 2 of 2025, read on bursamalaysia.com; SC Shariah-compliant securities and screening methodology pages; SIDREC website; SC Licensing Handbook (R19-2026); Central Bank of Malaysia Act 2009 s.5; Companies Commission of Malaysia Act 2001 s.17. Checked 12 October 2026. As at October 2026. Independent prep, not endorsed by SIDC or the SC.

Must-know for the exam

The Minister, on the SC's recommendation, approves a stock exchange (CMSA s.8); the SC must approve every rule amendment and decide within six weeks (s.9).
Acquiring 5% or more of an exchange holding company's voting shares needs the Minister's prior written approval; the application goes through the SC (CMSA s.25).
An exchange holding company may not cut its stake in its exchange, clearing house or depository below 75% without the Minister's approval (CMSA s.23).
An exchange holding company must act in the public interest; investor protection prevails over its own interest (CMSA s.21(2)); it must keep a Risk Management Committee (s.22).
SC functions sit in SCMA s.15; s.16 gives all powers necessary for, or reasonably incidental to, those functions under the securities laws.
SAC rulings bind the person who asked, and courts and arbitrators; they prevail over a registered Shariah adviser's ruling (SCMA ss.31ZM-31ZP).
Shariah list: updated twice a year, May and November; cash and interest-bearing debt each below 33% of total assets; Islamic cash and sukuk excluded.
SIDREC resolves investors' monetary disputes with its members by mediation and adjudication, free under its Mandatory Scheme for claims up to RM250,000.
A claimant may appeal a Capital Market Compensation Fund Corporation decision to the SC within 30 days; the SC decides within three months (CMSA s.166).
LEAP Market: Sophisticated Investors only (existing holders may sell), risk disclosure statement before the first trade, no margin financing (Rules 16.02-16.04).

On this page · 6 sections

Traps that cost marks

Candidates assume a regulator's silence means consent, or send rule changes to the Minister who approves exchanges.
Candidates name the SC as approver because the application is lodged with it; the approving authority is the Minister.
Candidates use a simple-majority test, or treat the s.24 asset notification as covering a sale of the exchange's own shares.
Candidates think company-law duties to shareholders override the statutory public-interest duty of a market operator.
Candidates assume a capital markets licence or a link to Bursa Depository legalises a private book-entry settlement system.
Candidates think the adviser closest to the transaction has the final word; the statute gives it to the SAC.
Candidates treat the SAC as an advisory body whose views a civil court may disregard.
Candidates mix up the two time limits: 30 days to appeal, three months for the SC to decide.

Who approves what under the CMSA

Part II of the CMSA splits approvals between the Minister and the SC. The Minister approves market institutions and controlling stakes in them; the SC approves their rules and supervises them day to day.

Matter	Approver	Provision
Approving a stock or derivatives exchange	Minister, on the SC's recommendation	CMSA s.8
Amendment to an exchange's or clearing house's rules	SC, within six weeks	CMSA s.9
Approving an exchange holding company	Minister, on the SC's recommendation	CMSA s.15
Holding company's stake in exchange below 75%	Minister (prior written approval)	CMSA s.23
Acquiring 5% or more of a holding company's voting shares	Minister (application via the SC)	CMSA s.25
Operating a stock market that is not approved, recognised or exempt	Offence: fine up to RM10 million and/or 10 years

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The Malaysian stock market and its regulators

8 min read6 sections

Must-know for the exam

The Minister, on the SC's recommendation, approves a stock exchange (CMSA s.8); the SC must approve every rule amendment and decide within six weeks (s.9).
Acquiring 5% or more of an exchange holding company's voting shares needs the Minister's prior written approval; the application goes through the SC (CMSA s.25).
An exchange holding company may not cut its stake in its exchange, clearing house or depository below 75% without the Minister's approval (CMSA s.23).
An exchange holding company must act in the public interest; investor protection prevails over its own interest (CMSA s.21(2)); it must keep a Risk Management Committee (s.22).
SC functions sit in SCMA s.15; s.16 gives all powers necessary for, or reasonably incidental to, those functions under the securities laws.
SAC rulings bind the person who asked, and courts and arbitrators; they prevail over a registered Shariah adviser's ruling (SCMA ss.31ZM-31ZP).
Shariah list: updated twice a year, May and November; cash and interest-bearing debt each below 33% of total assets; Islamic cash and sukuk excluded.
SIDREC resolves investors' monetary disputes with its members by mediation and adjudication, free under its Mandatory Scheme for claims up to RM250,000.
A claimant may appeal a Capital Market Compensation Fund Corporation decision to the SC within 30 days; the SC decides within three months (CMSA s.166).
LEAP Market: Sophisticated Investors only (existing holders may sell), risk disclosure statement before the first trade, no margin financing (Rules 16.02-16.04).

On this page · 6 sections

Traps that cost marks

Candidates assume a regulator's silence means consent, or send rule changes to the Minister who approves exchanges.
Candidates name the SC as approver because the application is lodged with it; the approving authority is the Minister.
Candidates use a simple-majority test, or treat the s.24 asset notification as covering a sale of the exchange's own shares.
Candidates think company-law duties to shareholders override the statutory public-interest duty of a market operator.
Candidates assume a capital markets licence or a link to Bursa Depository legalises a private book-entry settlement system.
Candidates think the adviser closest to the transaction has the final word; the statute gives it to the SAC.
Candidates treat the SAC as an advisory body whose views a civil court may disregard.
Candidates mix up the two time limits: 30 days to appeal, three months for the SC to decide.

Who approves what under the CMSA

Matter	Approver	Provision
Approving a stock or derivatives exchange	Minister, on the SC's recommendation	CMSA s.8
Amendment to an exchange's or clearing house's rules	SC, within six weeks	CMSA s.9
Approving an exchange holding company	Minister, on the SC's recommendation	CMSA s.15
Holding company's stake in exchange below 75%	Minister (prior written approval)	CMSA s.23
Acquiring 5% or more of a holding company's voting shares	Minister (application via the SC)	CMSA s.25
Operating a stock market that is not approved, recognised or exempt	Offence: fine up to RM10 million and/or 10 years

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4 more sections of this note are part of Premium.

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Every question in every live SIDC module
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A worked explanation on every question
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The Malaysian stock market and its regulators

Must-know for the exam

Traps that cost marks

Who approves what under the CMSA

The Malaysian stock market and its regulators

Must-know for the exam

Traps that cost marks

Who approves what under the CMSA

The SC: functions and powers