Investment Management and Products

Collective Investment Schemes and Private Retirement Scheme

Note:

Consists of unit trust funds, exchange-traded funds, real estate investment trusts and wholesale funds.
Includes 3 funds which were also qualified as SRI funds.
Includes 7 funds which were also qualified as SRI funds.
Includes 9 applications seeking qualification as SRI funds.
Includes 5 applications seeking qualification as SRI funds.

In 2024, the SC considered a total of 306 applications relating to CIS and PRS, comprising applications to establish new funds, register prospectuses and disclosure documents, register deeds and other ancillary matters. The SC also received 59 lodgements in relation to wholesale funds under the LOLA Framework for sophisticated investors.

Investment Products

In 2024, the SC registered 1,811 term sheets for the offering of structured warrants, representing a 20% increase from 1,515 term sheets registered in 2023. Additionally, the SC registered 26 supplementary prospectuses in the same year, marking an increase of 30% compared to 2023 (Table 9). These developments underscore the structured warrants market’s growing significance within Malaysia’s capital market, providing investors with a broad spectrum of listed investment choices. Structured warrants continue to offer exposure to various underlying assets, enabling investors to capitalise on market movements with greater leverage. The structured warrants market’s sustained expansion highlights increasing investor participation, driven by growing interest in accessible and flexible trading instruments that support portfolio diversification and strategic positioning. This momentum also reflects the evolving preferences of investors, who are actively seeking higher-yield opportunities in listed markets.

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.