Capital Market Investors May Resolve Dispute Against Banks Through SIDRECSeptember 2016
Effective from 5 September 2016, commercial and Islamic banks which provide capital market services or products become members of the Securities Industry Dispute Resolution Center (“SIDREC”). This follows the Capital Markets and Services (Dispute Resolution) Regulations 2010 (“Dispute Resolution Regulations”), as amended by the Capital Markets and Services (Dispute Resolution) (Amendment) Regulations 2016. With the amendment, investors who have claims involving capital market services or products against commercial and Islamic banks may refer their disputes to SIDREC.
SIDREC is an independent body established in 2011 under the Dispute Resolution Regulations to provide an alternative dispute resolution between investors and members of SIDREC which include capital markets services licence holders, Islamic banks and licensed banks which are involved in regulated activities such as fund management and dealing in securities, derivatives or private retirement schemes. Prior to the latest amendment to the Dispute Resolution Regulations, capital market investors who had disputes while with such entities under the Bank Negara Malaysia’s purview were referred to the Financial Mediation Bureau.
SIDREC provide free services to investors. The maximum claim limit and amount that may be awarded by SIDREC in an adjudication of a claim is RM250,000. SIDREC may also provide mediation for claims exceeding RM250,000 if the claimant and the relevant member of SIDREC agree.
Pursuant to the Dispute Resolution Regulations, the members of SIDREC must comply with any award granted by SIDREC against such member. Any monetary award granted by SIDREC may be sued and recovered as a contractual debt.