Allowing another person to deal in securities using your account violates the law


SECTION 29A of the Security Industry (Central Depositories) Act 1991 states as follows:

All dealings in respect of deposited securities shall only be effected by the beneficial owners of such deposited securities or an authorised nominee, as the case may be.

The general penalty is provided under section 51, which states as follows:

A person who contravenes or fails to comply with any of the provisions of this act or of any regulations made thereunder shall be guilty of an offence under this act and, where no penalty is expressly provided, shall, on conviction, be liable to a fine not exceeding RM1 million or to imprisonment for a term not exceeding five years or to both.

In simple words, the offence under section 29A is indictable, that is, a charge may be proffered against the offender.

This is illustrated in a 2018 case before the Sessions Court in Kuala Lumpur, where the defendant was charged for an offence under section 29A read together with section 51 of the act (Case No 62SC-9–03 of 2018). The charge read as follows:

That you, between October 14 and 20, 2011, at Bursa Malaysia Securities Berhad in the Federal Territory of Kuala Lumpur, as the beneficial owner of the said central depository system had allowed a third person to effect the acquisition of 1,000,000 units of company shares in the said account, and thereby committed an offence under section 29A of the Securities Industry (Central Depositories) Act 1991, and punishable under section 51 of the same act.

As the charge above shows, the accused was alleged to have allowed another person – who was in fact the defendant’s wife – to effect dealings in securities using his CDS account in violation of section 29A of the act.

On the same day the charges were filed, the defendant’s wife was also charged under section 188(2)(a) of the Capital Markets and Services Act 2007, and registered as Case No 62SC-(6&7)-03 of 2018. 

The four charges relate to her purchases of different lots of the company’s shares on four different dates during a seven-day period in April 2011, totalling 1 million shares in aggregate.

The prosecution was led by the deputy public prosecutor for the Securities Commission. It went up for revision before High Court Judge Mohd Nazlan and reported as [2020] 9 MLJ 246.

The point is this: the SC has previously brought charges for offences under section 29A of the Securities Industry (Central Depositories) Act 1991. – January 7, 2022.

* Hafiz Hassan reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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