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Bursa Malaysia Depository Sdn. Bhd. (“Bursa Malaysia Depository”) today published a consultation paper seeking public feedback on the proposed amendments to the Rules of Bursa Malaysia Depository to close dormant accounts upon the expiry of the 4th year of such accounts being designated as dormant.
A securities account is designated as dormant if there is no security in that account and there has not been any debit or credit entry in the securities account for 36 months from the date of the nil balance. In summary, the securities accounts are proposed to be closed at the end of the 7th year from the date of the nil balance.
The closure of dormant accounts is part of Bursa Depository’s efforts to improve the central depository system (“CDS”). The closing of these accounts will result in the improved operational efficiency of authorised depository agents (“ADAs”) (who are also Participating Organisations (“POs”) of Bursa Malaysia Securities Berhad) and authorised depository members (“ADMs”) since the ADAs/POs and ADMs no longer need to maintain such securities accounts (as well as the accompanying trading accounts) indefinitely. Additionally, this proposal will further strengthen the existing controls in the CDS as it will help mitigate the risk of misuse by persons other than the depositors concerned arising from such accounts having been left idle for an indefinite period of time, even though such risk may be minimal.
In this regard, the consultation paper seeks public’s views on the key proposed amendments which include:
- closure of a dormant account after such period as may be described by Bursa Malaysia Depository and upon providing notice of such closure to the depositor; and
- replacing the current notice given to depositors upon the depositor’s securities account being designated as a dormant account with a notice to be given to depositors before their dormant accounts are to be closed.
The consultation paper and the text of the proposed amendments can be downloaded from Bursa Malaysia Berhad’s website at www.bursamalaysia.com.
The public and market participants are encouraged to respond to the consultation paper by submitting the table of comments attached to the consultation paper to Bursa Malaysia Berhad by 10 February 2014.
