INCREASED DEVELOPMENTS: Khairul Ridzwan says problems may arise due to the increasing developments in online trading, where transactions are undertaken without depending on the advise of remisiers. — Bernama photo
KUALA LUMPUR: The Securities Industry Dispute Resolution Center (SIDREC), formed in January this year, will provide an alternative exit route for disputes arising among retail investors in the country.
“Problems may arise due to the increasing developments in online trading, where transactions are undertaken without depending on the advise of remisiers,” its chief executive officer, Khairul Ridzwan Abdul Kudus, told Bernama. He was speaking on the sidelines of the ‘Financial Awareness Week 2011’, an annual event, jointly organised by Bank Negara
Malaysia, the Securities Commission (SC), the Financial Mediation Bureau, the Malaysia Deposit Insurance Corporation (PIDM) and the Credit Counseling and Management
Agency.
Khairul Ridzwan said SIDREC needed to be established not just because of the problems arising from online trading.
“It is needed to assist the retail investors as the lack of investment knowledge will cause various other problems,” he added.
He said all claims must be in monetary form and subject to a limit of RM100,000 and for the moment, the centre’s service would be offered for free.
Claims made through SIDREC would cover problems in the stock market, futures trading and trust funds, where capital market licence holders including Permodalan Nasional Bhd (PNB) are members of SIDREC.
In this regard, he said, those not complying with a settlement order, could face problems with their membership in SIDREC and their licence with the SC.
“Also, investors not agreeing with the decision of SIDREC, can continue their claim through other settlement channels, such as the civil court,” he added.
Khairul Ridzwan said SIDREC would strive to settle all disputes within 90 days of receiving the complete documentation.
“However, this time frame may be extended, depending on the complexity of each case,” he added. Asked as to how many claims were currently being handled, he said there were ‘a few’.
“We will table an annual report at the end of a full year of SIDREC’s establishment.
“At present, what is more important is to convey the message to the retail investment community on the formation of SIDREC,” he added.
Meanwhile, its head and deputy general manager for investor affairs and complaints department, Sujatha Sekhar Naik said retail investors needed to have an in-depth knowledge before undertaking the purchase of any shares.
“Cheating activities are becoming more complex. You need to know beforehand if the company offering the shares really exists and has received the SC’s approval.
“If the company is genuine, you need to have the knowledge to not just purchase but the right time to eventually sell,” she added.
Sujatha said retail investors must also have a basic knowledge in being able to differentiate between the type of shares being bought.
“If you buy warrants, it has a specific time frame for maturity. If you miss this time period, you will for sure lose your investment money,” she added. — Bernama