Assessing a Legal Framework for Malaysian Stock Option Plans

Abstract

The objective of this article is to analyze the legal structures which governing Malaysian stock option plan. Based on the assessment of the relevant legal sources, the study produces some evidence of the legal frameworks find that the Malaysian law has modeled on the Anglo-Saxon system. Furthermore, it produces evidence that the law as it is currently adopted in Malaysia is slightly similar with the law operated in most of developed markets. To date, however, the law reforms carried out is not enough to revamp certain provisions. As consequences, some parts of the law enforced for stock option plans are not strongly applied in Malaysia. This study also emphasizes the following reasons which contribute to this issue as the existing legal system is unable to provide clear guidance although the main laws underpinning executive stock option plans like company and securities law have reformed comprehensively. The finding has found that law reform in Malaysia’s legal structure is not sufficient to ensure strong practices by the firm. Therefore, the Malaysian government should put in place a strong legal system by taking an immediate response to enforce new initiative. This could solve problems of amending provisions from being superseded.