International Profiling - Strategic Engagements with Stakeholders

International Profiling

In our efforts to maintain a strong presence on the global front, the SC has established a wide international network with foreign policymakers, regulatory counterparts, multilateral organisations, and market participants through participation in various international fora.

International Organization of Securities Commissions (IOSCO)
In 2023, the SC continued to play an active role in IOSCO, an international securities regulation standardsetter whose membership regulates more than 95% of the world’s capital markets in approximately 130 jurisdictions. As a member of the IOSCO Board, the SC is well-placed at the forefront of global regulatory discussions and policymaking and is able to gain relevant insights into emerging regulatory issues impacting global capital markets while contributing to international thought leadership.
This leadership position enables the SC to also raise issues of concern affecting the Malaysian capital market and other emerging markets and ensure there is an appreciation of these issues in the development of international policy recommendations. Discussions at the IOSCO Board include issues impacting investor protection, market integrity and systemic risks such as sustainable finance, digital assets and decentralised finance, enforcement co-operation, and retail market conduct.

Within IOSCO, the SC is an active member of various task forces and policy committees such as sustainable finance, fintech, secondary markets, emerging risks, retail investors and the Assessment Committee². Through these task forces and working groups, the SC is able to gain insights and tap into the experience and expertise of other markets, as well as to profile its domestic developmental and regulatory efforts in relevant areas.

Notably, the SC organised two workshops. On 10 February 2023, the SC as a member of the IOSCO Committee on Emerging Risks (CER) was involved in a roundtable session with stakeholders from the PE, private credit and asset management industries to exchange perspectives on private finance. In addition, on 15 November 2023, the SC also shared insights on the digital asset landscape in Malaysia in a meeting with the IOSCO Committee on Retail Investors, as Committee 8 focused its efforts on crypto-assets and retail investor protection.
IOSCO’s Assessment Committee is responsible for the implementation and monitoring of IOSCO’s Principles and Standards across its membership.
Association of Southeast Asian Nations (ASEAN)
The SC plays a pivotal role in contributing to the development and harmonisation of capital markets across the ASEAN. Through various ASEAN-level platforms, the SC actively engages with other securities regulators, finance ministries, and central banks to champion initiatives that enhance market integrity, investor protection, and the adoption of sustainable finance practices within the region.

As Chair of the ATB Working Group on Market Facing and Resourcing, as well as Co-Chair of the ASEAN Capital Markets Forum’s (ACMF) Sustainable Finance Working Group (SFWG), the SC has a particular focus on facilitating sustainable finance-related initiatives. With the ATB, the SC led stakeholder consultations and engagements both within and beyond the region on Version 2 of the ASEAN Taxonomy for Sustainable Finance and capacity-building sessions such as the ASEAN Taxonomy Version 2 Socialisation Webinar. Furthermore, through the ACMF SFWG, the SC contributed to the publication of the ASEAN Green, Social, and Sustainability-Linked Bond Standards, the ASEAN Sustainable and Responsible Fund Standards, and the ATFG.

The SC is also an active member of the Working Committee on Capital Market Development (WC-CMD)³. At the WC-CMD, the SC chairs the Infrastructure Finance Working Group (IFWG) which supports the development of infrastructure financing throughout ASEAN. This includes sharing experiences by sovereign issuers at a Sustainable Bond Knowledge Sharing session organised by the IFWG, which takes place at each WC-CMD meeting to promote the use of sustainable finance by governments to fund sustainable projects.
Co-ordinating committee that monitors initiatives and progress of the ASEAN members towards building the capacity and laying the infrastructure for the development of ASEAN capital markets.
Fostering International Regulatory Co-operation
Strengthening regulatory co-operation and linkages with its foreign counterparts remains a key focus of the SC’s international efforts. The relationships that the SC cultivated over the years have enabled it to tap on relevant expertise, insights, and request necessary assistance to support the SC’s role and functions.

In relation to supervision and enforcement, the SC has regular engagements with its counterparts through regional Supervisory and Enforcement Directors’ meetings. The IOSCO’s Multilateral Memorandum of Understanding (IOSCO MMOU) also allowed the SC to provide and receive regular assistance from international regulators, thus strengthening its enforcement capabilities and reach in dealing with cross-border market misconduct. In efforts to strengthen regional co-operation, the SC signed an MOU with the Securities and Exchange Regulator of Cambodia to facilitate greater regulatory, enforcement, supervisory co-operation and capacity-building efforts between the two regulators.

The SC continues to play an important role through the IOSCO Asia Pacific Hub, in strengthening the regulatory capabilities of securities regulators in the region as well as globally. The Hub fosters knowledge-sharing among securities regulators through interactive panel discussions, the exchange of best practices and case studies during workshops and seminars. To date, the Hub has trained over 1,800 participants from across 110 jurisdictions. In 2023, a total of six workshops and one webinar were organised, encompassing a variety of topics, including emerging risks in global capital markets, derivatives activity in developing markets, sustainable finance, cyber resilience, and regulatory enforcement.
ASEAN Socialisation Activities
The SC participated in various capacity building and socialisation events in relation to the fora that it is involved in at the ASEAN level. These mainly related to the SC’s role as Co-Chair of the ACMF’s SFWG, and the Chair of ATB’s Working Group on Market Facing and Resourcing. These included participating in side-events and panel sessions in Indonesia organised throughout 2023 by the Indonesian authorities during their ASEAN Chairmanship, as well as international organisations such as the ADB and the ASEAN-Korea Centre.
Highlights included the webinar on ‘The ASEAN Taxonomy: Facilitating a Just Energy Transition’ held by the ATB on 9 June 2023 to introduce the ASEAN Taxonomy Version 2, highlighting its unique features that enable alignment to international taxonomies while serving the needs of ASEAN. The event attracted more than 370 attendees throughout ASEAN and beyond.

The SC presented the ASEAN Taxonomy Version 2, which was followed by a panel session discussing energy transition in ASEAN and the role of the ASEAN Taxonomy in guiding climate finance, with participants from the Sustainable Finance Institute Asia, ADB, the International Capital Market Association and the Global Financial Alliance for Net Zero.

On 17 October 2023, the SC Chairman Dato Seri Dr. Awang Adek Hussin participated in the ACMF International Conference 2023 'Transitioning Towards Sustainable Capital Markets: The ACMF Perspective’, which was organised by OJK in Bali. During the session on ‘Capital Market Development: A Conversation with ACMF Leaders’, the SC Chairman shared capital market developments in Malaysia as well as the work of the ACMF’s SFWG to further the sustainability agenda in ASEAN.
International Trade
In supporting Malaysia’s trade and economic agenda, the SC strives to ensure continued active participation in the domestic capital market while safeguarding the interest of investors and firms alike. As such, the SC places significant emphasis on international trade agreements, focusing specifically on financial services.

Towards achieving this objective, the SC in 2023 participated in negotiations of the Malaysia-Turkey Free Trade Agreement (MTFTA), ASEAN-Canada Free Trade Agreement (ACaFTA), and the ASEAN Working Committee on Financial Services Liberalisation (WC-FSL), as well as the review and enhancement of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).
Invest Malaysia New York
The SC participated in the Invest Malaysia New York conference organised by Bursa Malaysia in New York City on 21 September 2023. The event, the first in the city since 2017, attracted 200 delegates in the financial and investment community including foreign fixed income, equity and private equity investors with combined AUM of over US$40 trillion (approximately RM188 trillion).

Themed ‘Regaining Malaysia’s Lead in Asia’, Invest Malaysia NY 2023 centred on promoting Malaysia’s inherent strengths and how the Malaysian government’s visionary Ekonomi MADANI framework will re-establish Malaysia as a leading ASEAN economy. Prime Minister Dato’ Seri Anwar Ibrahim officiated and delivered the keynote address at the event.

At a panel session entitled ‘Macro Resilience and Market Insights’, SC Chairman Dato’ Seri Dr. Awang Adek Hussin spoke on how the capital market is being enhanced to help drive greater economic growth, inclusion and sustainability, in line with the aspirations of the Ekonomi MADANI framework.

The delegates were updated on the recent announcements of capital market initiatives targeting to boost market vibrancy and enhance investor access. These include automatic promotion of eligible PLCs from the ACE Market to the Main Market of Bursa Malaysia, the reduction of stamp duty, and the enabling of fractional share trading by investors through stockbrokers. Dato’ Seri Dr. Awang Adek Hussin also said Malaysia would further facilitate companies to list on Bursa Malaysia through the speeding up of the IPO process to ensure Malaysia’s competitiveness and attractiveness.

Mitigating Systemic Risks And Promoting Financial Stability

Enhanced Risk Governance Framework

In 2021, the SC-wide risk governance framework was enhanced as part of an overall initiative to have an effective integrated and predictive risk surveillance to maintain regulatory agility.

The structured risk governance framework integrated the wider spectrum of risks such as technology, cyber and conduct risk at the SC’s Systemic Risk Oversight Committee (SROC) and Accounting, Market and Corporate Surveillance Committee (ACMS).

Intensified surveillance

The SC continued to intensify its surveillance of systemic risk to maintain market resilience and stability. Regular SROC engagements were held to deliberate concerns emanating from various segments across the capital market. Domestic equity and bond market, foreign fund flows and trade participation continued to be monitored closely for potential stress points.

In addition, measures and economic stimulus packages introduced by the government to weather the impact of COVID-19, market trading conduct and the financial position of listed companies were among the focus areas for discussion.

Thematic assessments

The SC also conducted thematic assessments covering investors’ fund flows, the position of firms, and policy decisions to ascertain the possible impact on the capital market. In 2021, the SC reviewed and enhanced its crisis indicators on potential emerging risks in the
capital market.

The enhanced crisis indicators provided a reference point for escalation to SROC when the identified indicators and triggers materialised and ensured prompt response to manage and prevent any issues of concern that might lead to a systemic crisis.

Joint regulatory discussions

In 2021, the SC conducted frequent joint regulatory discussions with other authorities such as Bank Negara Malaysia (BNM) and Labuan Financial Services Authority (Labuan FSA) to identify systemic risk concern areas within the financial and capital markets in Malaysia.

Monitoring of various components of the capital market

The SC continued its efforts to undertake a methodological and integrated approach to ensure any potential systemic risk was being monitored, mitigated, or managed. Figure 1 highlights the findings from the following risk assessments on the various components of the capital market.