| This
happens because many minority shareholders are generally ignorant
of their rights and are also unaware that they are being oppressed.
When they do become aware, they often adopt a passive approach
to the lack of good corporate governance practices. On occasions
when they do decide to take action, many are not familiar with
their rights, their options and the appropriate channels to
air their grievances. They may also not realise that there is
a legal time frame for taking action until it is too late.
We have also seen, time and again, instances
where retail investors have been persuaded into buying investment
products without being given a clear explanation of the risks
and rewards of the products. This may result in investors
buying investment products that are not suited to their risk
appetite or investment objective.
Investors should know that persons licensed
by the SC are regulated by the law in terms of their duties
towards investors. For instance, when a licensed person gives
recommendations on an investment product, he has to take into
consideration the investor’s investment objectives,
financial situation and particular needs. If the licensed
person fails to consider, the mentioned particulars, investors
have the right to complain to the relevant authorities such
as the SC.
The importance of investor education
The SC believes investor education has an important role to
play in the development of a world-class Malaysian capital market.
With the move towards a disclosure-based regulatory (DBR) regime,
it is even more important that investors be financially literate.
Malaysian investors need to understand how the capital market
works, the basics and differences among various investment products,
and decide which investment instruments will help them meet
their financial goals. Investors also need information on current
developments in the economy and the capital market, including
where to seek information so that they are well informed about
the companies they invest in, or factors that will affect their
investment. Investors must be fully aware of the risks and rewards
of a particular investment before investing in it, and also
know what their rights and responsibilities are as shareholders/investors.
In addition, investors must also be aware of the avenues provided
by the law to voice their grievances pertaining to their investment. |
