DBR and Investor Protection
Will investor protection be reduced by shifting from MBR to DBR?
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No it won’t. On the contrary, it would be enhanced. Under DBR, the SC would focus on protecting investors by regulating companies to make available information that are adequate, accurate and timely. With sufficient and timely information, investors would be able to better assess the potential risks and returns of their investments and thus act appropriately to protect their own interests. |
DBR consists of three tenets that are well embedded in Malaysian securities legislations and regulations. These tenets are:
- disclosure;
- due diligence; and
- corporate governance
In 1995, amendments to the Securities Commission Act 1993 placed greater standards of responsibility on promoters, directors, and advisers in respect of disclosure and due diligence. Section 32B SCA in particular, imposes criminal liabilities on persons responsible for submission of proposals to the SC, while the introduction of the Securities Commission (Amendment) Act 2000 on 1 July 2000 provided a new civil remedy, enabling investors to recover losses or damages arising from false or misleading information contained in the prospectus.
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