SIDC Module 9 cheat sheet

SIDC (Securities Industry Development Corporation) Module 9 sits in the Malaysian capital-markets certification ladder; the source does not enumerate its sub-domains, so this sheet covers the module's standard examinable content as a single domain.

Malaysian capital-market regulation is administered by the Securities Commission Malaysia (SC) under the Capital Markets and Services Act 2007 (CMSA); the SC licenses and supervises intermediaries through the CMSA licensing regime.

Bursa Malaysia operates the exchange and its subsidiaries: Bursa Malaysia Securities Berhad (equities), Bursa Malaysia Derivatives Berhad (futures/options), and Bursa Malaysia Securities Clearing / Bursa Malaysia Derivatives Clearing (clearing houses).

The SC's Guidelines on Conduct Requirements for Registered Persons set standards for fair dealing, client confidentiality, conflicts of interest, and suitability; the Anti-Money Laundering/CFT guidelines impose customer due diligence (CDD) and suspicious transaction reporting duties.

Market misconduct under the CMSA includes insider trading, market manipulation, false trading, and wash sales; penalties can include fines, imprisonment, and disgorgement of profits.

Key examinable order types: market order (immediate execution at best available price), limit order (executes at a specified price or better), stop order (becomes a market order when a trigger price is hit), and stop-limit order.

Settlement cycle for Bursa Malaysia equities is T+2 (trade date plus two business days); short selling and securities borrowing/lending are regulated and require specific approval or disclosure.

The FTSE Bursa Malaysia KLCI (FBM KLCI) is the headline benchmark of 30 large-cap constituents; the FTSE Bursa Malaysia EMAS Index covers the broader main-market universe.

Bond pricing relationship: price and yield move inversely; a bond trading at a discount has a yield above its coupon, at par equal to its coupon, and at a premium below its coupon.

Risk-return tradeoff: higher expected return requires accepting higher risk; standard deviation measures total risk, beta measures systematic (market) risk, and diversification reduces unsystematic risk.

The Capital Asset Pricing Model (CAPM) formula: expected return = risk-free rate + beta × (market return − risk-free rate).

Sharpe ratio = (portfolio return − risk-free rate) / standard deviation of portfolio returns; higher values indicate better risk-adjusted performance.

Required return on equity via the dividend discount model (Gordon growth): r = (next dividend / price) + dividend growth rate.

Net asset value (NAV) per unit = (total assets − total liabilities) / number of units outstanding; unit trust pricing uses forward pricing (next valuation point).

Compound interest: future value = present value × (1 + r)^n; present value = future value / (1 + r)^n.

Derivatives basics: a futures contract is exchange-traded and standardised with daily mark-to-market; a forward is OTC and customised; an option gives the buyer a right, not an obligation.

Call option intrinsic value = max(spot price − strike, 0); put option intrinsic value = max(strike − spot price, 0).

Diversification rule: combining assets with low or negative correlation reduces portfolio variance without proportionally lowering expected return.

Client suitability: know-your-client (KYC) requires gathering investment objectives, risk tolerance, financial situation, and time horizon before recommending products; recommendations must match the client profile.

Conflicts of interest must be disclosed and managed; front-running client orders, personal-account dealing ahead of clients, and misuse of material non-public information are prohibited.

Suspicious transaction reporting (STR) goes to the Financial Intelligence and Enforcement Department (FIED) of Bank Negara Malaysia; tipping off the client is prohibited.

Record-keeping: client orders, communications, and transaction records must be retained per regulatory requirements (commonly at least seven years) and made available to regulators on request.

Segregation of client assets: client monies and securities must be held in designated trust/客户 accounts separate from firm assets, with reconciliation performed regularly.

Complaint handling requires documented procedures, acknowledgement, investigation, and timely resolution, with escalation to the SC or relevant ombudsman where required.

Advertising and marketing materials must be fair, balanced, not misleading, and must include required risk disclosures; past performance cannot be presented as a guarantee of future results.

Continuing professional education (CPE) is mandatory for licensed representatives; failure to meet CPE requirements can affect licence renewal.

Insider trading definition: dealing in securities while in possession of material non-public information obtained through a connected relationship, or communicating such information (tipping).