FIRM NEWS
Shearn Delamore & Co is ranked in Chambers Asia-Pacific 2016
We are pleased to announce that Shearn Delamore & Co is once again recognised as a Leading Law Firm by Chambers and Partners. In the Chambers Asia-Pacific 2016 Client’s Guide launched recently, Shearn has been ranked in nine practice areas.
The Chambers Asia-Pacific guide is credited as one of the world's most reputable legal publication. The rankings are based on extensive research by their large team of more than 140 researchers and involves the review of major work highlights, feedback and insights from in-house counsels.
Band 1:
- Corporate/M&A
- Dispute Resolution
- Employment & Industrial Relations
- Intellectual Property
- Tax
Band 2:
- Banking & Finance
- Shipping
Band 3:
- Banking & Finance: Debt Capital Markets
Band 4:
- Projects, Infrastructure & Energy
Client Choice Awards 2016
This year, Client Choice recognised 383 winners across 68 jurisdictions around the world. There were only four individuals from Malaysia who have won the Client Choice award in their respective area of expertise. Two of the four winners are from Shearn Delamore & Co. Mr Rodney Gomez has been recognised as the sole country winner for the Construction Award, while Ms Goh Ka Im is the sole country winner for the Corporate Tax Award.
Established in 2005, the Client Choice recognises those law firms and partners around the world that stand apart for the excellent client service they provide. The criteria for the awards focus on their ability to add real value to their clients’ business over and above what other players in the market place offer.
The awards ceremony was held in London on 17th February 2016.
CORPORATE & COMMERCIAL
Amendments to the Bursa Malaysia Main Market and ACE Market Listing Requirements
Bursa Malaysia issued a circular on 24 March 2016 outlining amendments to the Main Market Listing Requirements (“MMLR”) with the main objective of enhancing corporate governance practices as well as improving shareholder participation and voting at general meetings.
These latest amendments touch on disclosure and corporate governance requirements (e.g. provisions to enhance disclosure of non-financial information such as management discussion and analysis in annual reports), future financial information consequential to the revised Prospectus Guidelines issued by the Securities Commission (“SC”) and amendments to the MMLR consequential to the Securities Commission (Amendment) Act 2015 and Capital Markets and Services (Amendment) Act 2015. The amendments will be implemented on a staggered basis, commencing from 30 April 2016.
Under the amendments aimed to strengthen corporate governance practices, a provision is now introduced to require listed issuers to carry out voting by poll. Pursuant to this new regime, any resolution set out in the notice of any general meeting or notice of resolution must be voted by poll and the listed issuer is required to appoint at least one scrutineer to validate the votes cast at the general meeting (MMLR: paragraphs (3) and (4) of Appendix 4A; paragraphs (3) and (4) of Appendix 4B; paragraphs (2) and (3) of Appendix 4B-A; new paragraph 8.29A; paragraphs 9.19(7) and 10.08(7A)). In addition, to improve transparency and shareholder engagement, listed issuers are now required to publish a summary of key matters discussed at annual general meetings onto their website (MMLR: paragraph 9.21(2)). The mandatory poll voting applies to general meetings held on or after 1 July 2016.
The above amendments in relation to mandatory poll voting apply similarly to listed corporations subject to the ACE Market Listing Requirements. (ACE Market Listing Requirements: Rule 8.31A; Rules 9.19(7), Rule 9.21(2) and 10.08(7A)).
Amendments to the Rules of Bursa Malaysia Securities and Directives
Bursa Malaysia also issued a circular on 22 February 2016 (No: R/R 2 of 2016) detailing amendments to the Rules of Bursa Malaysia Securities and the Participating Organisations’ Directives. These amendments were made pursuant to the deletion of Section 94 of the Capital Markets and Services Act 2007 on 15 September 2015.
Consequential to the deletion of Section 94 of the Capital Markets and Services Act 2007, Rule 7.25 (Opening of Trading Account), Rule 7.27 (Transactions by Employees, Dealer’s Representatives, Trading Representatives and Directors) and Rule 7.30(6) (Margin Financing) of the Rules of Bursa Malaysia Securities were also deleted to remove, among others, the prohibition for a Participating Organisation (“PO”) from opening a trading account to trade in securities for employees, Dealer’s Representatives (“DR”) or Trading Representatives (”TR”) of another PO and the requirement that an employee, a DR or TR must only trade through the PO by whom they are engaged. Under the current rules, a PO is to formulate its own internal policies to govern trading by such persons.
In line with this, Rule 7.26 (Approval) was amended to remove the requirement for prior written approval to be sought by the PO for each transaction of an employee, DR, TR or Director for his own account. Instead, such persons will now be required to notify the PO of the same.
Directive No. 3.36-001 (Directives for Head of Compliance) and Directive No. 3.39(5)-001 (Directives on Monthly Compliance Report) were also amended to reflect the removal of the requirement for prior written approval of the PO, and to clarify the reporting requirement on the Head of Compliance that necessary steps have been taken by the PO to manage conflicts of interests and risks that may arise in the conduct of business.
Proposed Regulatory Framework on Cyber Security Risk Management By Securities Commission
On 21 March 2016, the SC published a consultation paper seeking public feedback on the proposed regulatory framework relating to the management of cyber security risk by capital market participants with the aim of strengthening the protection and preservation of the confidentiality, integrity and availability of information systems.
The SC is proposing to introduce the following regulatory requirements to guide capital market participants:
- Roles and responsibilities of the Board and senior management in having oversight and managing cyber security risk;
- Establishment of internal cyber security policies and procedures that should be developed by the capital market participants; and
- Measures for managing cyber security risk.
Interested parties and the public are invited to submit their comments and feedback to the SC before the closing date of 29 April 2016. The SC expects to finalise the regulatory framework by the second quarter of 2016, after taking into consideration industry and public feedback on the proposed framework. The SC may also hold industry focus group discussions before the finalisation of the framework to assess the level of industry readiness to implement the cyber security requirements.
For further information regarding corporate and commercial law matters, please contact
Datin Grace C G Yeoh
gcgyeoh@shearndelamore.com
Lorraine Cheah
l_cheah@shearndelamore.com
DISPUTE RESOLUTION
Sarah Sayeed Majangah & Anor v Lembaga Getah Malaysia & Anor [2016] 2 CLJ 905
The Court of Appeal reiterated that the law leans in favour of upholding bargains between parties and not in striking them down. When it relates to sale and purchase agreements, lease agreements or tenancy agreements, where the terms and conditions relating to essential terms are standard in nature, the Court will not permit a party who had subscribed to the terms to evade concluding the agreement for circuitous reasons.
Desiree Couture Sdn Bhd & Anor v Anen F Co Ltd & Ors [2016] 2 CLJ 942
Vicarious liability does not apply in a defamation action, as only the person who published the defamatory statement could be held liable. On the facts, the first defendant and Hup Lik Debt Collection (M) Sdn Bhd (“Hup Lik”) entered into an agreement to govern the provision of debt collection services by the latter to the former. In the agreement, Hup Lik was described as an independent contractor. An employer or principal was liable for the acts of its employees, servants and agents, but not for the acts of an independent contractor.
For further information regarding dispute resolution matters, please contact
Datin Jeyanthini Kannaperan
jeyanthini@shearndelamore.com
Robert Lazar
rlazar@shearndelamore.com
COMPETITION LAW
Malaysian Airline System Berhad and Airasia Berhad v Competition Commission
(Appeal Number: TRP 1-2014 / TRP 2-2014)
The Competition Appeal Tribunal (‘’CAT’’) overturned the ruling of the Malaysia Competition Commission (‘’MyCC’’) which found AirAsia Bhd and Malaysian Airline System Bhd guilty of anti-competitive practices by reason of their entering into a Collaboration Agreement dated 9.8.2011 (‘’CA’’). CAT held that the plain reading of the terms of the CA did not give rise to the CA having the object of significantly preventing, restricting or distorting competition in any market for goods or services.
Competition (Amendment of First Schedule) Order 2016
By virtue of the Competition (Amendment of First Schedule) Order 2016, section 3(3) of the Competition Act 2010 has been amended to include the Malaysian Aviation Commission Act 2015. The effect of the amendment is that the Competition Act 2010 is not applicable to commercial activity regulated under the Malaysian Aviation Commission Act 2015.
For further information regarding competition law matters, please contact
Dato' Johari Razak
jorazak@shearndelamore.com
K Shanti Mogan
shanti@shearndelamore.com
FINANCIAL SERVICES
Malaysia is FATF member
The Financial Action Task Force ("FATF") has granted full FATF membership to Malaysia at its February 2016 Plenary. The FATF Plenary has published an outcome of the February 2016 Plenary which states, among others, that Malaysia has been granted full membership upon FATF recognising:
- the commitment demonstrated by Malaysia’s action plan to address key effectiveness issues identified after the evaluation on Malaysia in 2015; and
- the continuing progress in efforts to improve its Anti-Money Laundering and Combating Financing of Terrorism regime.
The full outcome of the February 2016 Plenary is available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-february-2016.html.
Malaysia Deposit Insurance Corporation (Amendment) Act 2016 comes into force
The Malaysia Deposit Insurance Corporation (Amendment) Act 2016 ("Amendment Act") recently came into force on 8 March 2016. The Amendment Act introduces new provisions relating to “Islamic deposit” and certain winding-up provisions in relation to member institutions in consequence to the enforcement of the Financial Services Act 2013 ("FSA") and the Islamic Financial Services Act 2013 which repealed, among others, the Banking and Financial Institutions Act 1989, the Insurance Act 1996, the Islamic Banking Act 1983 and the Takaful Act 1984.
In addition, the principal Act has been amended to include new provisions on share transfer powers in relation to non-viable member institutions. The Amendment Act also introduces new definitions in relation to Islamic derivatives and Islamic securities and fine-tuned the definitions of “qualified financial transaction” and “qualified financial agreement” to the equivalent definitions used in the FSA and the Central Bank of Malaysia Act 2009, and the requirement of “recurrent dealings” no longer applies to a derivative transaction for the purposes of a “qualified financial agreement”.
For further information regarding financial services matters, please contact
Christina S C Kow
christina@shearndelamore.com
Pamela Kung Chin Woong
pamela@shearndelamore.com
INTELLECTUAL PROPERTY
SKB Shutters Manufacturing Sdn Bhd v Seng Kong Shutter Industries Sdn Bhd [2015] 6 MLJ 293
The Federal Court in the case of SKB Shutters Manufacturing Sdn Bhd v Seng Kong Shutter Industries Sdn Bhd [2015] 6 MLJ 293, in addressing one of the questions of law, had ruled that a dependent claim cannot survive validity if the independent claim it is dependent on is found to be invalid.
The Federal Court decision has far-reaching significance and may result in proposals to amend the law. For a full write-up on this decision, please refer to our newsletter which can be accessed here.
For further information regarding intellectual property law matters, please contact
Wong Sai Fong
saifong@shearndelamore.com
Karen Abraham
karen@shearndelamore.com
TAX LAW
Goods and Services Tax (GST)
The Goods and Services Tax (Zero-Rated Supply) (Amendment) Order 2016 was gazetted on 9 March 2016 and came into operation on 14 March 2016.
Further, the revised versions of the following Industry and Specific Guides have also been published on the Royal Malaysian Customs Department’s GST website:
- Approved Toll Manufacturer Scheme (revised as at 3 March 2016);
- Registration (revised as at 24 February 2016);
- Retailing (revised as at 11 March 2016).
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