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Members Portal

Welcome to the Member’s Portal!

This portal is designed to help us connect with our Members. We hope through this platform to share information and updates. It is also a repository for general communication to our members including publications such as our Newsletters, all of which will be archived here for your convenience. Moving forward we hope to make this an avenue for an interactive and effective mode of communication with all of you.

GENERAL
General

Do I have to inform my clients about SIDREC?

Yes. You are required to ensure your clients are aware of their right to seek SIDREC’s help. You are also specifically required to include such information in your final reply to a complainant or Claimant. Please refer to SIDREC’s Terms of Reference.

How do I inform them?

You can inform them through the letter of final reply to your client’s complaint. Your letter of final response must include:

  • A clear statement that the letter is your final reply;
  • Availability of SIDREC as an avenue for them to resolve the dispute with you; and
  • The 180-day timeframe for the Claimant to file a claim with SIDREC, if they are not satisfied with your final reply.

Can a Claimant bring a dispute to SIDREC after 180 days from receiving our final reply on the dispute?

Generally, no. Nevertheless, SIDREC may extend this 180-day timeframe if either the Member does not object to SIDREC accepting the dispute, or if there are exceptional circumstances which warrant SIDREC accepting the dispute. Such exceptional circumstances include situations whereby the client was seriously unwell at the relevant time, or the response was sent to the wrong address etc.

Is SIDREC pro-Claimant in its approach and will it always try to get a positive outcome for the Claimant?

No, SIDREC is independent and impartial in our approach to help resolve a dispute. We have no attachment to the outcome and will look at each case based on the evidence and all the relevant circumstances of the case, including the conduct of the parties. Moreover, we are mindful of good industry practices as well as applicable laws when a decision is made. We are also mindful of some of the practical challenges faced by Members. The overarching principle is what is fair and reasonable in the circumstances of the case. This can work as much in the Members’ favour as it can for Claimants.

What is provided to the investor from the perspective of investor protection is the independent, impartial and expert avenue to redress. This means the complaint is looked at by independent and impartial experts who understand the market and the regulatory framework, so the help provided is an informed one.

Members are strongly encouraged by SIDREC to participate in SIDREC’s dispute resolution process constructively and with an open mind. In this way, members will find that the process can be a good addition to your risk management and client retention toolkit. A constructive and open approach on the part of the Member also generally tends to bring out the best in the Claimant’s own willingness to listen and compromise.

At best, if the case goes in your favour, you will at the very least have learnt more about your client and possible challenges that they face. The client also goes away with a better understanding of how the market works and will hopefully not repeat the mistake or behaviour that caused the problem.

At worst, if the case goes in the Claimant’s favour, you would have discovered more about possible issues in your own processes or conduct or sales practices of your representatives.

You may also discover practical impediments in your processes or products etc. that may need to be addressed or improved. In essence, you have the opportunity to take any necessary pre-emptive or remedial measures to close the gap concerned to prevent any reoccurrence or the gap concerned building into a more systemic issue.

Dispute Resolution Process

If a police report has been lodged, would this stop SIDREC’s dispute resolution process?

No, it would not. SIDREC’s dispute resolution process will continue, unless there is a directive by the Securities Commission Malaysia (SC) to SIDREC not to proceed with the dispute resolution process.

SIDREC will only terminate our dispute resolution process in relation to an investigation by the SC or other government enforcement authority, where there is a directive by the SC not to proceed with the dispute resolution process.

A police report or a letter of complaint to any other regulatory agency does not necessarily lead to an investigation. If you are aware that the matter is being investigated by the police or other government enforcement agency, you may inform the police or the agency a concerned of the fact there is a claim submitted to SIDREC. If the police or the agency concerned is of the view that SIDREC’s dispute resolution process would impede their investigation and would like SIDREC to stop our process, they will inform the SC and the SC may instruct SIDREC to terminate our process for the claim concerned.

We would note that investigations by the police or government enforcement agencies are often complex and involve many issues, claims to SIDREC are not usually sufficiently relevant for them to ask SIDREC to terminate our process through a directive from the SC.

Is there any limit as to the number of representatives who can attend SIDREC’s dispute resolution process on our behalf?

Yes, generally the maximum limit is three representatives, at any one time, unless the Mediator/Adjudicator/SIAC specifically permits more than three of your representatives to attend. If you have more than three representatives from different business functions and you need them to give evidence to support your case, then they may wait outside the meeting room, and join the session as and when their evidence or input is required.

The maximum limit of three is implemented to ensure that the Claimant is not intimidated by the number of the Member’s representatives, as more often than not the Claimant attends SIDREC’s process alone. This is particularly important given that Member’s representatives are experienced market practitioners and often include a legally trained representative. For claims not exceeding RM250,000 (mandatory component), we do not permit lawyers in our process; as such, the Claimant does not come supported by any professional with expertise. This is also one of the measures taken by SIDREC to address any perception of unfairness or partiality on the part of SIDREC especially, when SIDREC’s decision is not in the Claimant’s favour.

Who should we send as our representatives to attend SIDREC’s dispute resolution process?

Please ensure that at least one of your representatives is empowered with the authority/mandate to negotiate and agree the terms of settlement and enter into a settlement agreement on your behalf when they participate in SIDREC’s dispute resolution process.

If the claim/complaint is directed at any particular staff, representative or agent of yours, it is advisable for the said staff or agent to be present at the dispute resolution process to clarify the issues. The Member is reminded that an adverse inference may be made against you, if you fail to call the said staff or agent to be present and answer any issues or questions raised without any justifiable reason.

What is the role of lawyers in the dispute resolution process?

  • For claims up to RM250,000:-
    Legal representation is not allowed in the dispute resolution process. However, parties are free to consult any lawyer outside the process for legal advice. Indeed, they are encouraged to do so should they feel the need.

  • For claims exceeding RM250,000:-
    If the Claimant wishes to be assisted by a lawyer during a mediation meeting or adjudication hearing, then the Member too may bring a lawyer for such meeting or hearing.

  • For court-referred mediation:-
    Lawyers are permitted in the dispute resolution process for both the member and the claimant.

  • Parties’ conduct and Mediator’s discretion:-
    The Mediator has the discretion to meet with the parties and/or with the lawyers individually during breakout sessions.

    Any lawyer participating in the dispute resolution process must abide by SIDREC’s rules and the spirit of SIDREC’s process. The Mediator may exclude any party, including a lawyer, where he or she is of the view that the party concerned is in any way undermining the objectives of the dispute resolution process.

What case fees are applicable to Members?

  • For claims up to RM250,000:-
    The applicable fees are as set out in Part II, Appendix 3 of SIDREC Circular No. R/R 1 of 2017. The fees payable by Members shall be communicated via circulars to members and are not available to the public or to Claimants.

    The case fees will only be applicable if mediation exceeds four (4) hours. The first 4 hours are free, to encourage parties to make constructive use of SIDREC’s help to resolve the dispute.

    By way of illustration, where a dispute cannot be resolved after a mediation exceeding four hours and proceeds to adjudication, the total case fee payable is RM6,500 (which include RM1,500 being the mediation fee and RM5,000 being the adjudication fee).

    The fees payable by the Members only covers a fraction of SIDREC’s costs in providing the mediation and adjudication services.

  • For claims exceeding RM250,000:-
    The case fees are set out in Annexure 3 of SIDREC’s Terms of Reference.

    It should be noted that the case management fee and the adjudication fees are at a flat rate while the Mediation fee is a daily rate. For the purposes of mediation under this voluntary component, one (1) day is taken as being eight (8) hours of mediation.

  • For court-referred mediation:-
    The case fees are set out in Annexure 4 of SIDREC’s Terms of Reference.

For claims up to RM250,000, if the dispute resolution process proceeds at a slower pace because of the Claimant’s lack of understanding or language barrier, and as a result the mediation exceeds four hours, do we have to pay the mediation fee?

Yes. The case fees, be it mediation fees or adjudication fees, are calculated based on the time spent by the Mediator or Adjudicator during the mediation session or adjudication hearing. Lack of understanding may at times be due to many reasons, including the inadequacy of information provided to the claimant or the member. SIDREC’s Mediator/Adjudicator will use his/her best efforts to facilitate our dispute resolution process as expediently and efficiently as possible. It is essential that the parties understand the issues at hand, so as to enable the parties either to make an informed decision towards an amicable resolution of a dispute during mediation, or to present their case and respond to the issues raised by the other party during adjudication.

Where the mediation exceeds four (4) hours, the mediation fee is capped at RM1,500 regardless of the total duration of the mediation.

The computation of time in ascertaining the duration of a mediation is solely determined by SIDREC.

APPEAL (ONLY APPLICABLE TO CLAIMS UP TO RM250,000)
For Members

What documents do we need to submit, if we wish to appeal against the Adjudicator’s Award? To whom do we submit the documents?

You are required to submit the following documents to SIDREC within the stipulated timeframe:

  • a duly completed Notice of Appeal stating the ground/basis of appeal;
  • any other relevant documents that support your appeal;
  • a non-refundable appeal fee in the sum of RM3,000 (for a member who is not an investment bank)/ RM6,000 (for a member who is investment bank member) whichever applicable; and
  • a security deposit for a sum equivalent to 50% of the amount of the Award in the form of bank guarantee naming SIDREC as beneficiary or a banker’s cheque payable to “Securities Industry Dispute Resolution Center”.

You are required to forward a copy of the above documents to the Claimant on the same day.

What is the timeframe to file an application for an appeal?

i. You are required submit the following to SIDREC within five (5) working days from the date the Member is notified of the Claimant’s acceptance of the adjudication Award:-

  • a Notice of Appeal identifying the grounds of appeal;
  • the appeal fee; and
  • the security deposit for a sum equivalent to 50% of the amount Awarded.

The Notice of Appeal must be concurrently forwarded to the Claimant. You are advised to file the Notice of Appeal as soon as possible within the prescribed time frame for appeal. Don’t leave it until the last minute. Allow yourself time to re-file the Notice of Appeal, if there are any shortcomings or irregularities found in the Notice of Appeal.

If you wish to file an appeal, do ensure that you have the information and evidence to substantiate your grounds of appeal.

ii. Submission of details of Grounds of Appeal and supporting documents

You must submit to SIDREC and concurrently send the Claimant, the details of your grounds of appeal, together with all relevant supporting information and documents, within ten (10) working days from the submission of the Notice of Appeal.

Is the appeal fee refundable?

The appeal fee is not refundable. This is regardless of the outcome of the appeal or if the appeal is an ineligible appeal.

Other than the appeal fee and the 50% security deposit, are there any other fees that I have to pay to SIDREC?

No, there is no other payment payable to SIDREC. However, you would have to bear any costs you may incur to meet your own needs e.g. if you wish to bring a translator or expert witness to the physical hearing, you would have to bear any costs you incur in this regard.

Can we pay the security deposit in other form?

The security deposit should be lodged in the form of a bank guarantee naming SIDREC as the beneficiary or a banker’s cheque payable to SIDREC.

SIDREC will provide a prescribed format for the bank guarantee upon request.

Can we apply to pay a lower security deposit than as prescribed?

No.

When do we have to pay the appeal fee?

The appeal fee and the security deposit must be paid together with the Notice of Appeal, otherwise SIDREC will not accept the filing of the Notice of Appeal.

Is the security deposit refundable?

It depends on the SIAC’s (SIDREC’s Appeal Committee) decision. If pursuant to the SIAC’s decision, you are required to make any payment to the Claimant, then SIDREC may utilise the security deposit towards settlement of the SIAC’s decision.

However, if there is no monetary award in favour of the Claimant pursuant to the SIAC’s decision, the security deposit will be refunded to you without interest.

How will the security deposit be utilised?

If pursuant to the SIAC’s decision you are required to make any payment to the Claimant, then SIDREC may utilise the security deposit towards the settlement of the SIAC’s decision. Where the security deposit is insufficient, the Member must pay the balance of the sum awarded, within ten (10) working days from the date of the SIAC’s decision (if the Claimant files the Appeal) or the acceptance by the Claimant of the SIAC’s Decision (if the Member files the Appeal).

In the event that there is a balance of security deposit remaining after the settlement of the award pursuant to the SIAC’s decision, SIDREC will return the unutilised portion of the security deposit to the Member, without interest.

Are there any other circumstances where the security deposit will be returned to us?

The security deposit or a portion of which, where applicable, will be returned to the Member under the following circumstances:

  • there is no monetary award made in favour of the Claimant pursuant to the SIAC’s decision; or
  • there is a balance of security deposit remaining after the settlement of the SIAC’s decision; or
  • the Claimant is eligible to make a claim from the Capital Market Compensation Fund and the payment out from the capital market compensation fund is sufficient to settle the award pursuant to the SIAC’s decision.

If we are dissatisfied with SIAC’s decision on appeal, can we bring the dispute to court?

SIAC’s decision is final and binding on Members where:-

  • the Claimant is the party that submitted the appeal application; or
  • the Member is the party that submitted the appeal application, and the Claimant has accepted SIAC’s decision.

In such circumstances, the Member may only challenge SIAC’s decision by way of judicial review through the courts.

Feedback to the CEO, please email to ceo@sidrec.com.my.