Lodging a Dispute with SIDREC

How do I complain to or file a claim with SIDREC?

You can call us, email or write to us. Alternatively, you can submit an enquiry form on SIDREC’s website or simply pay a visit to our office.

What complaints can SIDREC handle?

If a complaint is against a SIDREC Member and involves a capital market product or service provided by our Member or their representative or agent to an investor, SIDREC may be able to help.

Capital market products that come under SIDREC’s purview include securities (such as shares, unit trusts, warrants, retail bonds, structured products such as structured warrants etc.), derivatives (e.g. futures or options) and Private Retirement Schemes (PRS).

Capital market services include any service that involves a capital market product. For example, this would include all aspects of helping an investor invest in shares, unit trusts or any other securities, derivatives or PRS or carrying out fund management activities.

Please contact SIDREC if you are unsure whether your claim/complaint is within SIDREC’s purview.

What are eligible disputes?

An Eligible Dispute means a dispute that SIDREC can manage. There are requirements, as follows:

(i) The claim is lodged by an individual investor or a sole proprietor;

(ii) The claim is against a Member of SIDREC;

(iii) The claim relates to capital market products or services of securities such as shares and unit trusts, derivatives, fund management and private retirement schemes;

(iv) The claim is a monetary claim (for Mandatory Scheme - an amount not exceeding RM250,000 and for Voluntary Scheme - an amount of more than RM250,000); and

(v) The Eligible Claimant has referred the dispute to the Member for resolution and the Member has failed to resolve the claim to the satisfaction of the Eligible Claimant.

SIDREC classifies eligible disputes according to the issues raised. The following are the three main categories of eligible disputes, including some examples of issues that fall under each category:

(i) Service Standard. These may include delays, errors, or glitches in online systems, lapses in disclosure as well as other delays or errors in processes.

(ii) Market Conduct. These may include fraud, defalcation or misappropriation, sales practices such as mis-selling, bad advice, product suitability, inadequate disclosures, unauthorised transactions, or non-compliance with client instructions.

(iii) Member’s Practices or Policies. These include fees and charges, disclosure policy, product development and sales policy.

What types of complaints/dispute are excluded?

There are a few categories of complaints/disputes from investors which SIDREC would not be able to assist. They include matters:

• involving a Member against which a winding up order has been made, or where the
• Member has been declared to be financially insolvent by a court of law, or has been the subject of a declaration of an event of default pursuant to the Rules of the Capital Market Compensation Fund Corporation;
• arising from commercial decisions, e.g. with regard to product pricing, fees and charges or rejection of credit/margin applications, made by the Member;
• concerning the performance of a product or investment (except in respect of any alleged non-disclosure/misrepresentation by the Member in relation to such product or investment);
• which have been referred by the claimant or the Member to a court or arbitration and the case:
  
  • has been decided in the court or arbitration; or
  • is pending in the court or arbitration unless the matter is stayed for the purposes of referral of the dispute to SIDREC;
• involving matters under investigation by the Securities Commission (SC) or any other Government enforcement agencies
• authority where the SC has issued a direction under the Regulations to SIDREC not to proceed with the Dispute Resolution Process; and
• which have been time barred in accordance with the Limitation Act 1953, Limitation Ordinance (Sabah) (Cap.72) and Limitation Ordinance (Sarawak) (Cap.49) at the time it is submitted to SIDREC for resolution.

Please contact SIDREC to find out more.

Who are SIDREC members?

SIDREC Members are holders of Capital Markets and Services Licence (CMSL) or Registered Persons under the Capital Markets and Services Act 2007 (CMSA) who are authorised to carry out dealings in securities, derivatives, private retirement schemes (PRS) and fund management services.

Members include investment banks, commercial banks, Islamic banks, stockbrokers, derivatives brokers, fund management companies, unit trust management companies, institutional unit trust advisers, corporate unit trust advisers, PRS providers and distributors and two specified development financial institutions (DFIs)

Please refer to the list here.

Do I have to pay for SIDREC's services?

SIDREC’s services are free for investors with claims not exceeding RM250,000.

Please refer to SIDREC's Dispute Resolution Schemes for more information.

What is the minimum amount that I can claim for?

There is no minimum amount.

Under its Mandatory Scheme, SIDREC’s dispute resolution services are free for investors with monetary claims not exceeding RM250,000.

Under its Voluntary Scheme, SIDREC accepts disputes involving monetary claims above RM250,000 provided both parties agree to use SIDREC’s services.

Is there a limit to the amount I can claim?

1. Mandatory Scheme (Part A of SIDREC’s TOR)

The limit for claims under the mandatory scheme is RM250,000 (excluding any fair interest).

However, if your claim exceeds this amount and if you are willing to limit your claim to RM250,000.00 (excluding any fair interest that), you may still submit a claim under the mandatory scheme.

2. Voluntary Scheme (Part B & C of SIDREC’s TOR)

• For claims above RM250,000 (Part B of SIDREC's TOR).
  
  • There is no claim limit for the voluntary scheme and both parties must agree to use SIDREC expert services.
• Court referred mediation (Part C of SIDREC’s TOR)
  
  • There is no claim limit for court referred mediation.

How long does it take?

SIDREC aims to resolve all claims within 90 working days from the receipt of complete documentation from both parties. However, this time frame may be extended at SIDREC’s discretion depending on the complexity of the disputes, the level of cooperation extended by the parties, any logistical impediments involving any of the parties, etc.

What if I am a foreigner or residing outside Malaysia, can I still come to SIDREC for help?

Yes, you can come to SIDREC for professional assistance as long as your complaint or claim is in relation to a capital market product or service provided to you by a SIDREC Member.

Is there a time-limit for making a complaint to SIDREC?

There are generally two-time limits that you need to follow to ensure you are not time barred from submitting a claim to SIDREC:

• the six-year limitation period imposed by the Limitation Act 1953, Limitation Ordinance (Sabah) (Cap. 72) and Limitation Ordinance (Sarawak) (Cap. 49) on civil claims;
• and the requirement in SIDREC’s TOR to file a claim within 180 days from the date of receipt of a final reply on your complaint from SIDREC’s Member.

Please contact SIDREC, if you are not sure if your claim is time barred.

Before Coming to SIDREC

What is the process to file a claim?

One of the pre-conditions for filing a claim with SIDREC is that an investor must have first filed a complaint against the relevant SIDREC Member through its internal dispute resolution process. Following this:

(i) Where the SIDREC Member has attempted to resolve the complaint and the investor is not satisfied with the final reply of the SIDREC Member on the complaint, the investor may file a claim with SIDREC within 180 days from the date of receipt of the Member’s final reply on their complaint; or

(ii) Where the SIDREC Member has not resolved the complaint through its internal dispute resolution process within 90 days after receipt of the complaint, the investor may file the claim with SIDREC.

In filing your claim, you may download a copy of the Dispute/Claim Form.

Do I need complete documentation before coming to SIDREC?

It would be helpful if you have complete documentation, but you may still come to SIDREC for consultation and submit your documents later. You are advised to submit promptly any documentation that will help support your claim upon request by SIDREC as SIDREC’s process is meant to be speedy.

Do I need a lawyer to help with my complaint to SIDREC?

No, you do not need the services of a lawyer to file a complaint with SIDREC or for any part of SIDREC’s dispute resolution process. SIDREC's case managers will assist you through the process and the mediator/adjudicator will facilitate to ensure a fair process is adhered to. Parties are free to seek advice from their lawyers. However, there are limitations to lawyers participating in SIDREC’s dispute resolution process as stated below:

1. Mandatory Scheme (Part A of SIDREC’s TOR)

• Neither party is allowed to bring in their lawyer or be represented by their lawyer in SIDREC’s dispute resolution process.
• Many claimants under this category are not able to afford lawyers and SIDREC provides investors with the avenue to free expert help to resolve their disputes.
• However, SIDREC is not able to provide legal advice and understand that you may feel the need for lawyers. Parties are free to seek the advice of their lawyers to assist or support them. The lawyers, however, will not be able to participate in the dispute resolution process.

2. Voluntary Scheme (Part B & C of SIDREC’s TOR)
Claims exceeding RM250,000 (Part B of SIDREC’s TOR) and court-referred mediation (Part C of SIDREC’s TOR)

• For claims exceeding RM250,000: If the claimant has applied to SIDREC for their lawyer to be present, the Member may also bring their lawyer to the meeting or hearing.
• For court-referred mediation: Lawyers for both parties are permitted to participate in the process.

Any person given permission by SIDREC to attend the meeting or hearing must abide by the SIDREC’s TOR and the spirit of SIDREC’s dispute resolution process. Where the mediator or adjudicator are of the view that a person is in any way undermining the process, the mediator or adjudicator may exclude such person from the said meeting or hearing.

Case Management, Mediation & Adjudication

What happens when I submit a complaint to SIDREC?

After you have submitted your complaint, SIDREC will then assess the eligibility of your claim/complaint, followed by an assessment on the merits of the claim. During the merit assessment, SIDREC may dismiss your claim/complaint pursuant to its TOR, inter alia, if the claim is found to be clearly unsustainable against the Member concerned, or if the claim is frivolous and vexatious (causing or tending to cause annoyance, frustration, or worry). In addition, SIDREC may also dismiss the dispute at any stage in the dispute resolution process.

If your claim passes the initial assessment, the matter will then proceed to mediation, where our mediator will try to help the parties to resolve the dispute. If the parties fail to reach an agreement through mediation, the matter will then proceed to adjudication, during which SIDREC’s adjudicator will conduct a hearing of the matter and issue a decision.

What is Mediation?

Mediation is an alternative method of resolving disputes conducted by way of an informal discussion.

It is moderated by a mediator who is an independent and impartial party.

The mediator’s role is to help the parties communicate and reach an agreement and outcome that is acceptable to both parties.

The mediation process is confidential and the discussions may not be disclosed to any party outside of SIDREC’s dispute resolution process.

What is a Mediator?

A mediator is a neutral third party who interposes between two conflicting parties for the purpose of assisting them in settling their differences. The mediator’s role is to listen to the parties, help the parties understand each other’s viewpoints regarding the dispute and facilitate the negotiation of a voluntary resolution to the case.

What is Adjudication?

Adjudication is a hearing of a dispute by an adjudicator who will make a decision on the dispute.

Who is an Adjudicator?

An adjudicator presides over disputes and helps to determine the issues for dispute settlements. Adjudicators are experienced professionals in their respective industry and are experts of related subject matters. During the adjudication process, adjudicators are responsible for reviewing evidence and documents as well as conducting assessment of the merits of the case for each party.

What is the difference between Mediation and Adjudication?

While both mediation and adjudication are dispute settlement processes, mediation is an informal negotiation between the parties with the assistance of a neutral third party who acts as a mediator.

On the other hand, in adjudication, the adjudicator will listen to the arguments submitted by both parties and give a decision based on the gathered evidence and merits of the case for each party. While it is less formal than a normal court proceeding, the adjudicator, in a way, acts like a judge. Unlike a mediator who helps disputing parties reach an agreement that is acceptable by both, an adjudicator will assess the case and give his/her own decision on the case.

Is the decision binding on all parties?

SIDREC’s adjudication decision under the Mandatory Scheme is binding only on SIDREC’s Member. If the claimant is unhappy with SIDREC’s decision, they are free to explore other avenues to resolve their complaint.

However, if the claimant accepts the decision, they would then enter into a settlement agreement with SIDREC’s Member and this will then become binding on both parties.

For the Voluntary Scheme where claims exceed RM250,000, SIDREC’s adjudication decision under the Voluntary Scheme is binding on both the claimant and SIDREC’s Member.

Can I call an expert witness to support my case?

Yes, you may do so. However, you must obtain the prior consent of SIDREC. You are required to furnish SIDREC with the name, qualification, specialised knowledge/experience of the expert witness and the reason for calling the expert witness for SIDREC to decide on the requisite consent.

If I am not fluent in Bahasa Malaysia and English, what should I do?

You may be assisted by any person who can act as your interpreter, but you must obtain prior consent from SIDREC. In such circumstances, you will need to furnish SIDREC with the particulars of the person including his/her name, contact details, identity card number, education level, occupation, etc.

Can my friend or family member accompany me during SIDREC's dispute resolution process?

A third party may only attend the mediation sessions or adjudication hearings with you with the prior approval from SIDREC. Generally, due to the confidential nature of the proceedings, SIDREC does not entertain requests for participation by third parties. However, in some exceptional circumstances, SIDREC may exercise its discretion to allow it. For example, if the claimant is elderly and needs assistance.

Some documents to support my claim are with the SIDREC Member. What should I do?

You should write to the Member to request a copy of the same. As a client/customer of the Member, you are entitled to have a copy of your statement of accounts, the account application form, payment receipts, etc. If you encounter problems obtaining such documents from the Member, please let the case manager know.

Can I refuse to provide any material/documents/information that SIDREC request?

If any party fails or refuses to provide any material evidence within in his/her control (which includes any audio/visual or digital data, documents, information or witnesses) requested by SIDREC without an acceptable reason to SIDREC, the adjudicator or the SIDREC Appeals Committee (SIAC) (where applicable) may draw an ‘adverse inference’, i.e. that the party is seeking to conceal facts that are not in his/her favour. Failure to provide the information requested may, therefore, be prejudicial to your case.

Am I required to provide the evidence that I forwarded to SIDREC to the other party?

If a party wishes the adjudicator to take into account the documents furnished by him/her, he/she should furnish a copy of the evidence to the other party. This is to give the other party the opportunity to respond to accordingly. Otherwise, the adjudicator will not take the said evidence into account.

SIDREC’s overarching principle will always be what is fair and reasonable for the case.

During SIDREC's dispute resolution process, can either party still make an offer in order to settle the dispute amicably?

Yes, parties are encouraged to do so at any point in the dispute resolution process before the issuance of an award.

Can I withdraw my claim/complaint after lodging a claim with SIDREC?

A claimant may withdraw his/her complaint at any point of time before the adjudicator issues an award.

What happen if a Member does not comply with SIDREC's decision?

If a Member does not comply with SIDREC’s decision, it would tantamount to a breach of SIDREC’s rules and the Capital Markets and Services (Dispute Resolution) Regulations 2010, as well as the Securities Commission Malaysia’s (SC) licensing conditions as set out in the SC’s Licensing Handbook.

SIDREC will then notify the SC of the non-compliance by the Member concerned for the SC’s further action. SIDREC will stand advised by any directive issued by the SC on the matter.

Filing an Appeal (Only Applicable for Claims up to RM250,000)

If I am unhappy with SIDREC's adjudicator's award, can I appeal?

A party may only appeal to SIDREC if the adjudicator’s award was issued under the Mandatory Scheme of the dispute resolution process.

Further, a party may appeal to SIDREC against the adjudicator’s award on the following grounds:

• a serious error of law or fact in the award; or
• the production of new evidence (which could not have been obtained with reasonable effort or diligence during adjudication), that may materially affect the award.

What is the timeframe to file an appeal?

For filing of an appeal by claimant:

• A claimant must file a prescribed Notice of Appeal identifying the grounds of appeal together with the appeal fee (RM500) with SIDREC, within five (5) working days from the date of his notification to SIDREC of his rejection of the award or deemed rejection of the award, together with the relevant appeal fee.Please note that if the claimant does not respond to inform SIDREC whether he/she wishes to accept or reject the adjudicator’s award within ten (10) working days from the date of award, he is deemed to have rejected the award.
• Further, you are also required to submit to SIDREC, the details of your grounds of appeal together with all the relevant information and necessary documents that support your appeal within ten (10) working days from the date of submission of the Notice of Appeal.

For filing of an appeal by a SIDREC Member:

• A SIDREC Member must file a prescribed Notice of Appeal identifying the grounds of appeal together appeal fee and the Security Deposit with SIDREC, within five (5) working days from the date of notification of the claimant’s acceptance of the Award.
• Further, the SIDREC Member is also required to submit to SIDREC, the details of the grounds of appeal together with all the relevant information and necessary documents that support the appeal within ten (10) working days from the date of submission of the Notice of Appeal.

How can I appeal against the Adjudicator's Award?

The Appealing Party must comply with the appeal process that is set out in Rule 23 of SIDREC’s TOR. A Notice of Appeal identifying the grounds of appeal should be submitted within the prescribed time frame and:

1. For filing of an appeal by claimant:

• If the appealing party is a claimant, you are required to submit the following documents to SIDREC within five (5) working days from the date of the notification to SIDREC of the rejection of the award or deemed rejection of the award:
  
  • a duly completed Notice of Appeal stating the ground/basis of appeal; an
  • a banker’s cheque for a sum of RM500 payable to “Securities Industry Dispute Resolution Center” being the non-refundable appeal fee.
• Thereafter, you are required to submit to SIDREC, the details of your grounds of appeal together with all the relevant information and necessary documents that support your appeal within ten (10) working days from the date of submission of the Notice of Appeal.

2. For filing of an appeal by SIDREC Member:

• If the appealing party is a SIDREC Member, you are required to submit the following documents to SIDREC within five (5) working days from the date of notification of the claimant’s acceptance of the award:
  
  • a duly completed Notice of Appeal stating the ground/basis of appeal;
  • the relevant non-refundable appeal fee as prescribed under Annexure of SIDREC’s Terms of Reference; and
  • a security deposit for a sum equivalent to 50% of the amount of the Adjudicator’s Award in the form of a bank guarantee naming SIDREC as beneficiary or a banker’s cheque payable to “Securities Industry Dispute Resolution Center”, where applicable.
• Thereafter, the SIDREC Member is required to submit to SIDREC, the details of the grounds of appeal together with all the relevant information and necessary documents that support the appeal within ten (10) working days from the date of submission of the Notice of Appeal.The Appealing Party is required to forward a copy of the above documents to the Responding Party on the same day the documents are forwarded to SIDREC.

You are also advised to ensure that you file the Notice of Appeal as soon as possible within the prescribed timeframe. Please do not wait till the last minute.

Kindly contact SIDREC if you are unsure whether the ground/basis which you intend to rely on falls under the prescribed grounds of the limited appeal permitted by SIDREC.

I was aware of an evidence but I did not produce it during mediation/adjudication process because I was unsure whether it will help my case or not. Can I use that evidence as a ground to file an appeal?

No, if you already had the evidence but  did not use it, you are not permitted to use the evidence as it will not satisfy the ground. If you wish to rely on the ground of “production of new evidence” you must fulfil the two criteria below:

• The new evidence would have a material impact on the award; and
• Despite reasonable effort or diligence, you were not able to obtain the said evidence during the mediation/adjudication process.

Therefore, all parties are advised to go through all evidences that would support their case and submit them to SIDREC as early as possible. A party is not allowed to file an appeal on this ground merely because he had failed to properly prepare his case at adjudication.

I wish to appeal against the Adjudicator's Award. Do I need to pay any fee to SIDREC?

As a claimant, you need only pay RM500 to appeal. Regardless of the outcome, the appeal fee is not refundable. A SIDREC Member is not required to pay the appeal fee. Only the appealing party has to pay for the appeal fee.

When do I need to pay the appeal fee?

The fee must be paid to SIDREC together with the Notice of Appeal. Otherwise, SIDREC will not accept the filing of the Notice of Appeal.

Other than the appeal fee, are there any other fees that I have to pay to SIDREC?

There are no other payable fees. Nevertheless, you will have to bear any other professional or personal expenses that you may incur, for example, travel cost, legal cost (if you choose to seek advice from lawyers) or translator cost (if applicable).

What are the factors which can cause an Appeal to be considered as an Ineligible Appeal?

Some examples:

• The grounds/reasons for the appeal do not meet the requirements set out in Rule 22 of SIDREC’s TOR.
• Incomplete Notice of Appeal. The Notice of Appeal must be completed with all required details and supporting documents (where applicable). It needs to specifically set out what are the ground/basis that the appealing party seeks to rely on with sufficient details.
• The Notice of Appeal, the supporting documents and the relevant fees are not filed with SIDREC within the specified time frame.
• If the appeal is filed by a Member and the Member fails to submit the requisite security deposit for a sum equivalent to 50% of the amount of the award.
• If the terms in the bank guarantee submitted by a Member as security deposit is not acceptable to SIDREC.

Can I be represented by a lawyer at the appeal stage?

• Neither party is allowed to bring in their lawyer or be represented by their lawyer in SIDREC’s dispute resolution process.
• Many claimants under this category are not able to afford lawyers and SIDREC provides investors with the avenue for free expert help to resolve their disputes.
• However, SIDREC is not able to provide legal advice and understand that you may feel the need for a lawyer’s counsel. As such, parties are free to seek the advice of lawyers to help prepare or support them. However, the lawyers are not allowed to participate in the dispute resolution process.

Who hears the appeal?

All appeals are heard and decided by the SIDREC Appeals Committee (SIAC).

Who appoints SIAC members and what is the composition of the Members?

SIAC consists of five (5) members appointed by SIDREC with the prior approval of the SC of whom:

• two shall be independent members, one of whom shall be the Chairman of SIAC;
• one shall be a senior representative of the Securities Commission;
• one shall be a member of the Board of Directors of SIDREC; and
• one shall be an individual with industry knowledge and experience.

What is the appeal process?

Once SIDREC receives the Notice of Appeal, a review will be carried out to determine the eligibility of the appeal.

SIDREC will then make a recommendation to the SIAC on the eligibility of the appeal. If the SIAC agrees with SIDREC’s recommendation, SIDREC will then proceed to inform the parties involved of the decision.

Eligible appeals will then proceed to the next stage. Depending on the facts or the circumstances of the case, the SIAC Chairman has the discretion to decide on the mode of deliberation, whether it will be by way of a physical hearing or written submission of the parties.

If the deliberation is e by way of a physical hearing, SIDREC will fix the hearing date and inform all the parties involved.

If the deliberation is by way of a written submission, the process will be as follows:

• within 10 working days after the appeal became an eligible appeal, the responding party needs to file a written response to the Notice of Appeal. Service of the written response must be done on the same day for both the appealing party and SIDREC.
• the appealing party has ten (10) working days to file a written reply to the written response filed by the responding party. Service of the written reply must be done on the same day for both the responding party and SIDREC.

SIAC will then consider all appeals based on the records of the adjudication.

How long do I need to wait for the appeal decision?

SIAC will decide on an appeal within sixty (60) working days from the date the appeal is filed. However, SIAC has the discretion to extend the timeframe where it sees fit and necessary.

Is SIAC's decision binding on the claimant and Members?

SIAC’s decision is final and shall be binding on all parties regardless whether the parties have executed a settlement agreement or whether the parties participated in the appeal.

Nevertheless, if the appeal is filed by a Member, the claimant has an option to reject SIAC’s decision. If the claimant opts to reject SIAC’s decision, the Member is not obliged to comply with the SIAC’s decision. In such an event, the claimant is free to pursue his/her claim through other avenues.

What happens if a Member refuses to comply with SIAC's deciaion?

If a Member does not comply with SIAC’s decision, this would amount to a breach of SIDREC’s rules and the Capital Markets and Services (Dispute Resolution) Regulations 2010, as well as the SC’s licensing conditions as set out in the SC’s Licensing Handbook. SIDREC will notify the SC of the non-compliance by the Member concerned for SC’s further action. SIDREC will stand advised by any directive issued by the SC on the matter.