Session 3 Enforcement Approach Towards Better Corporate Compliance

1. Company
LOGO
THE COMPANIES COMMISSION OF
MALAYSIA’S ENFORCEMENT
APPROACH TOWARDS BETTER
CORPORATE COMPLIANCE
BY:
ABDUL KARIM ABDUL JALIL
CHIEF EXECUTIVE OFFICER
COMPANIES COMMISSION OF
MALAYSIA
THE COMPANIES COMMISSION OF
MALAYSIA’S ENFORCEMENT
APPROACH TOWARDS BETTER
CORPORATE COMPLIANCE
BY:
ABDUL KARIM ABDUL JALIL
CHIEF EXECUTIVE OFFICER
COMPANIES COMMISSION OF
MALAYSIA

2. Asia Pacific Corporate Registers
Forum 2006
2
• Merger of Registrar of Companies
and Registrar of Businesses
• Statutory Body
• Autonomy
• Regulator of corporate laws
INTRODUCTIONINTRODUCTION

3. Asia Pacific Corporate Registers
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• Vision
‘To be a Centre of Excellence for corporate
information, regulation, development and research,
responsive to a dynamic business environment
towards enhancing national economic
competitiveness’
• Mission
To instil good corporate governance through
continuous education and effective surveillance and
enforcement

4. Asia Pacific Corporate Registers
Forum 2006
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• Companies Commission of Malaysia Act,
2001
• Companies Act, 1965
• Registration of Businesses Act, 1956
• Trust Companies Act, 1949
• Kootu Funds (Prohibition) Act, 1971
• Any subsidiary legislation made under the
above specified Acts
AUTHORITYAUTHORITY

5. Asia Pacific Corporate Registers
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5
• Corporate Law Reform Committee
• Corporate Directors Training Programme
• Implementation Team Member, High Level
Finance Committee on Corporate
Governance
• Secretariat, Ministry’s National Integrity Plan
CORPORATE GOVERNANCE
- ROLE OF CCM
CORPORATE GOVERNANCE
- ROLE OF CCM

6. Asia Pacific Corporate Registers
Forum 2006
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• Between educating and enforcing
– Making compliance easier
– Reducing the cost of compliance
– Technology:
• CBS–ROC successfully rolled-out in June 2005
• Online services (E-filing, E-payment & E-info) by
end 2006
BALANCING THE ACTBALANCING THE ACT

7. Asia Pacific Corporate Registers
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• Why educate?
– Internal discipline vital
– Education complements regulations
– Too much enforcement would stifle free enterprise
– Know your roles & responsibilities
• Whom to educate?
– Company directors
– Shareholders
– Corporate Intermediaries
– General public
EDUCATIONEDUCATION

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Forum 2006
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• How to educate?
– Publications by CCM
– Outreach programmes
– Media
– Mobile counters
– Dialogue sessions
– Forums
– Exposition
• Hotline & personal visits
EDUCATIONEDUCATION

9. Asia Pacific Corporate Registers
Forum 2006
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• Regulatory efforts v criminal sanctions
– Administrative actions
– Compounds
– Prosecutions
• Deterrent measure: Cost of non-compliance will
be more severe
• Incentives: Merit and awards for companies
with good corporate governance track record
• ‘Healthy friction’ between regulators and
stakeholders: Each side knows its role
ENFORCEMENTENFORCEMENT

10. Asia Pacific Corporate Registers
Forum 2006
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• Surveillance efforts: 11,245 and 146,000
inspections conducted on companies and
businesses, respectively
• Non-compliance: 43,777 compound
notices issued to companies and 93,064
notices issued to businesses
• Settlement: 11,297 (or 25.8%) and 80,903
(or 86.9%) of the compound notices were
settled by December 2005
ENFORCEMENT
- MILESTONES IN 2005
ENFORCEMENT
- MILESTONES IN 2005

11. Asia Pacific Corporate Registers
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• Increase in cases prosecuted under the
Companies Act 1965 and Registration of
Businesses Act 1956, with a rise of 32.6% and
14.6%, respectively, compared to 2004
• Compliance rate, in terms of Annual Returns
lodged with CCM, was 70% for 2005 (up 10.9%
from 2004)
• Compliance rate is expected to improve in 2006
ENFORCEMENT
- MILESTONES IN 2005
ENFORCEMENT
- MILESTONES IN 2005

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• Emphasis on corporate governance cases
• Capacity building within CCM to tackle
complex corporate cases
– Recruitment
– Continuous training
ENFORCEMENT
- THE WAY AHEAD
ENFORCEMENT
- THE WAY AHEAD

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• Going forward, CCM adopts the approach
of educating and enforcing
• Full participation from stakeholders vital
• Regulators must keep up with the times
– Reinvent!
– Refresh!
IN CONCLUSIONIN CONCLUSION

14. Asia Pacific Corporate Registers
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Q & A
SESSION
Q & A
SESSION

15. Asia Pacific Corporate Registers
Forum 2006
15
Abdul Karim Abdul Jalil
Chief Executive Officer
Companies Commission of Malaysia
Level 17, Putra Place
No. 100, Jalan Putra
50622 Kuala Lumpur, Malaysia
T: +603. 4047. 6007
F: +603. 4043. 6031
E: karim@ssm.com.my
www.ssm.com.my
THANK YOUTHANK YOU