SIDREC was established by Securities Commissions Malaysia under the Capital Markets and Services (Dispute Resolution) Regulations 2010 to provide an alternative dispute resolution (ADR) avenue for the investing public to resolve their investment disputes involving monetary claims with licensed and registered capital market service providers (CMSPs). CMSPs who are members of SIDREC comprise banks, brokers, fund management companies, unit trust management companies, and Private Retirement Scheme (PRS) providers and distributors.
Top reasons to use SIDREC’s services
Independent & impartial: SIDREC provides independent and impartial expert help in resolving investment disputes. Its services comprise both mediation and adjudication.
SIDREC will first try to mediate a resolution, and where mediation is not successful, it will proceed to adjudicate and issue a decision. If the investor accepts SIDREC’s decision, the decision will be final and binding on the CMSP, unless either party appeals under SIDREC’s limited appeal avenue. This way, parties will have closure on their dispute.
Free service for claims up to RM250,000: SIDREC’s services are valuable, especially for the smaller claimants, as its services are free for claims not exceeding RM250,000. Investors, thus, have access to free, timely and expert help to resolve their disputes with any market intermediary who is a member of SIDREC. This forms part of the mandatory component of SIDREC’s ADR services, whereby SIDREC members are required by law to participate in the process.
Additional service for claims above RM250,000: SIDREC will also help resolve claims exceeding RM250,000, where both parties agree to use its services. SIDREC recognises that investors and members for higher claims may wish to have access to its specialist dispute resolution service and allow for this under SIDREC’s voluntary component.
Under this part of the ADR service, SIDREC will provide its services for disputes involving claims exceeding RM250,000, whereby both parties to the claim (i.e. the claimant and the member) wish to use its services. The service covers both mediation and adjudication. There will be a fee charged on both parties for the voluntary component of our ADR services.
Wide range of disputes covered: SIDREC’s ADR services cover disputes arising from the offer or sale of capital markets products and services by CMSPs who are commercial banks, Islamic banks, and designated development financial institutions (DFIs) who are marketing channels for capital market products such as shares, unit trusts, bonds, private retirement schemes (PRS), and structured products. As long as the dispute is with a CMSP who is a SIDREC member, SIDREC may be able to help.
Strong governance: SIDREC is subject to strong governance controls through the regulatory oversight set out in its regulations and the robust oversight of its independent board.
In addition, the dispute resolution process is protected by strict confidentiality requirements, and the additional internal controls that separate the board from having any involvement in the dispute resolution process, including any decisions issued by its adjudicators. SIDREC’s processes are transparent and clear and supported by sound management and a firm commitment by SIDREC to deliver a quality expert service that is effective and neutral.
Principle of fair & reasonable: SIDREC is guided by an overarching principle of achieving an outcome that is fair and reasonable in all the circumstances of a case.
Qualified mediators & adjudicators: SIDREC’s panel of mediators and adjudicators are qualified ADR professionals with the requisite capital market experience.
How does SIDREC’s ADR process work?
SIDREC’s ADR process starts with the submission of a claim by an investor claimant. A case manager will be assigned to the case. Where the claimant needs help, the case manager will assist the claimant through the process of submitting his claim. The initial stage of case management involves information gathering and preliminary assessment of the eligibility of the case. If all criteria are met, the case manager will ask the member to provide their response to the claim with relevant information, as well as their perspective on the issues raised. The case manager will then undertake a more detailed review of the case and seek any additional information required. The case then proceeds to mediation.
Mediation is undertaken by a qualified mediator with capital market knowledge, supported by the case manager. The case manager will remain the point of contact and help for both the claimant and the member through the whole life of the case.
The purpose of mediation is to try to help the parties discuss and consider the issues of concern with the help of an independent and impartial mediator, towards achieving a satisfactory resolution of the matter. The mediator will try to encourage and guide mediation to facilitate constructive discussion toward achieving a resolution. In this way, relationships between the parties may be preserved, or at the very least, there is a better level of understanding between them.
A mediator is there to help parties resolve the dispute on terms that are acceptable to both. The mediator will not judge or make any determination on the dispute. She is there to help facilitate the parties to come to a mutually acceptable settlement. Parties have control over the outcome and what they are willing to accept or offer.
If mediation is successful, then both parties a sign a settlement agreement. If no resolution is achieved, the case then proceeds to be adjudicated.
Watch SIDREC’s video of its process flow: –
SIDREC Chairman Dato’ Ranita Mohd Hussein’s views: –
“Dispute resolution is not easy because parties may come to the table with diametrically opposite views, and emotions can run high.
It is, therefore, critical that both investors and members recognise our case managers and our mediators and adjudicators as being professionally neutral and possessed of the capability of giving consistently high quality service.
To that end, we ensure that our case managers and mediators and adjudicators are equipped with the required skills in managing disputes, and are also knowledgeable about the workings of the capital markets. Decisions of SIDREC’s adjudicators are based on the principles of fairness and reasonableness.
In encouraging an open manner and attitude in resolving disputes, we note a growing acceptance and trust in SIDREC’s role amongst its members. There is obvious benefit to members when investors continue being their clients after their disputes are amicably resolved.
We are also happy to note that members have begun to show initiative in learning from SIDREC’s management of disputes and to take measures to prevent recurrences of similar disputes.”