Stakeholder Perception Survey

The SC embarked on a Perception Survey to garner greater insights as to how the SC is perceived by its key stakeholders. This was one of the initiatives taken in 2023 to enable the SC to better evaluate and diagnose further refinement of its policies and approaches.

  • Understanding Stakeholder Perceptions
    The goal of this survey is to gauge the attitudes of key stakeholders, such as investors and market participants, towards the SC. This insight will enable the SC to align its strategies with stakeholder needs and promote a transparent and efficient market. The survey’s impact lies in upholding the SC’s reputation and fostering innovation within the Malaysian capital market.
    Assess overall perception
    Understand stakeholders’ view of the SC’s effectiveness and credibility.
    Identify areas of strength
    Determine where the SC is performing well to build upon its strengths for continued success.
    Gauge awareness and understanding
    Measure stakeholders’ knowledge, confidence, and recognition of the SC’s obligations, policies, and framework for effective communication and engagement.
    Identify areas for improvement
    Gather feedback on areas that need improvement to enhance regulatory functions.
    Understand market trends and challenges
    Measure stakeholders’ knowledge, confidence, and recognition of the SC’s obligations, policies, and framework for effective communication and engagement.
    Three Focus Areas
    Reputation Measures and KPIs
    • The SC carries strong trust and is greatly admired especially among its affiliates and the media, reflecting its positive reputation.
    • There is a mild increase in criticism from senior and long-tenured professionals, indicating an area the SC needs to address while maintaining its established reputation.
    Brand Perception and Personalities
    • The SC is predominantly perceived as a responsible, trustworthy, and formal entity, reinforcing its authority and credibility in its role as a regulatory body. However, it is less associated with traits such as being popular, youthful, bold, or stagnant, indicating a more traditional perception.
    • Negative connotations like being disrespectful, unknown, or unreliable are not associated with the SC, reflecting its positive image.
    Key Drivers Impacting Trust
    • The SC’s dedication to market stability, proficiency, and investor confidence has been recognised and appreciated by stakeholders.
    • However, to augment trust, attention should be directed towards catering to varied stakeholder requirements, boosting decision-making transparency, strengthening stakeholder involvement, digitalising processes, fortifying post-COVID market resilience, and collaborating on cross-border regulations.
    • Tackling these areas along with leveraging existing strengths will further solidify the SC’s reputation, influence, and trust among stakeholders.
  • The Importance of Trust
    Trust is the cornerstone of the SC reputation measurement framework. It reflects the anticipation of persistently positive behaviour and is considered as a strategic KPI. The SC took into consideration the main components which influence the level of trust extended by stakeholders towards the SC.
  • The Reputation Pyramid
    The Reputation Pyramid below reflects the five indicators used to measure the SC’s position as a regulator of Malaysia’s capital market.
    From the findings of the survey, the SC is largely seen as a responsible, trustworthy, and formal regulatory body, reinforcing its authority and credibility. Importantly, the SC avoids negative connotations such as being disrespectful, unknown or unreliable, fortifying its positive image. The key takeaways for the SC are the importance of maintaining its strengths in trustworthiness and continuous responsibility in addressing areas for the regulation and development of the capital market.

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.

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