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The Securities Industry Dispute Resolution Center (SIDREC) today hosted its third Annual General Meeting (AGM) following the release of its 2012 annual report, which reflected an increase of nearly six times the number of cases and queries received in 2011, its first year of operations.
The number of enquiries indicated a greater awareness on SIDREC, attributed by continued promotional activities such as roadshows with the Securities Commission Malaysia (SC) and Bursa Malaysia Securities Berhad, press advertisements and as well as other awareness campaigns.
SIDREC, set up under the Capital Markets and Services (Dispute Resolution) Regulations 2010, aims to enhance investor protection by affording investors with small claims access to settlement of disputes without the need to resort to expensive litigation. SIDREC is expected to be mainly funded through fees, levies and subscriptions paid by its members, who are capital market license holders including stockbrokers, derivatives brokers, unit trust management companies, and fund managers. However, the SC is presently financing SIDREC in its start-up phase.
At SIDREC’s AGM this morning, the matter of its membership fees, which had been scheduled to become applicable in 2013 was clarified by its Chairman, Dato’ Ranita Mohd Hussein, who announced that the SC has agreed to fund SIDREC for a further two years.
Sujatha Sekhar Naik, CEO of SIDREC, elaborated that the extended funding was on the understanding that a case levy, would be imposed on members who have claims registered against them. Members will be informed of the structure of the case levy in due course.
She explained that the extended funding by the SC was an interim measure to allow time to monitor developments and a thorough review towards determining an equitable apportionment of costs that takes into account of all concerns raised.
Sujatha also highlighted that worldwide, the operation of industry dispute resolution bodies was financed either wholly or substantially by its members. As such the principle of industry contributing to the funding of SIDREC is very much in line with international practice. However, SIDREC was cognisant of the challenges of costs to business faced by members and would work closely with the SC to arrive at an equitable funding structure.
SIDREC is also very appreciative of SC’s willingness to extend its funding to facilitate the review of the funding structure. SIDREC will continue to focus on achieving greater awareness of its services through engagements and collaboration with its members and other stakeholders towards its objective of providing an independent and impartial avenue to investors and members for the resolution of disputes.
SIDREC is the first dispute resolution body catered exclusively to address small claims in the Malaysian capital market. It provides a mediation and adjudication mechanism aimed at investors who have claims of RM100,000 or less arising from transactions involving capital market products and/or services. The facility is provided free to eligible individuals and sole proprietorships.
