International Organization Of Securities Commissions, ASEAN Capital Markets Forum And International Trade
The SC continues to demonstrate our commitment to global regulatory policy making and international standard-setting by being actively involved in the International Organization of Securities Commissions (IOSCO), the leading international standard-setter for securities regulation. IOSCO’s membership regulates more than 95% of the world’s capital markets in approximately 130 jurisdictions.
In March 2024, the SC was re-elected as the APRC representative to the governing Board of IOSCO. The re-election to the IOSCO Board is a recognition of the SC’s active contribution and demonstrates the support and confidence IOSCO members have in the SC as an organisation. The SC’s position on the IOSCO Board allows it to be at the forefront of global regulatory discussions and policymaking and gain relevant insights into emerging regulatory issues impacting capital markets. Close engagement with international regulatory counterparts also helps strengthen jurisdictional benchmarking which shapes domestic policies while ensuring that the SC’s regulatory approach is in line with global best practices.
The SC is a member of IOSCO’s Sustainable Finance Task Force (STF), where the focus of the work relates to corporate reporting (disclosure of sustainability-related information and sustainability-related assurance), promoting sound-functioning carbon markets, transition plans disclosures and green finance products in fixed income markets and ESG benchmarks. The SC formed part of the Technical Review Coordination Working Group that assessed the International Sustainability Standards Board’s (ISSB) draft climate-related disclosure standards, which ultimately led to IOSCO’s endorsement of both the general and climate-related disclosure standards in June 2023. IOSCO has called on securities regulators to consider ways in which they might adopt, apply or otherwise be informed by the ISSB Standards within their jurisdictional context.
The SC subsequently launched NSRF in September 2024 which addresses the use of the standards issued by the ISSB as the baseline for sustainability reporting in Malaysia (refer to page 112 of SC Annual Report 2024). The SC is a key member of IOSCO’s Policy Committees on Emerging Risks, Secondary Market Regulation, Retail Investors as well as the Assessment Committee. In respect of IOSCO’s Committee on Emerging Risks, the SC was involved in the development of the IOSCO Risk Outlook 2025/26 that reviewed emerging global risks, trends and vulnerabilities and their implications for global capital markets for the year. Within IOSCO’s Committee of Retail Investors, the SC is involved in the work relating to investor education on crypto-assets, and finfluencers and their impact on retail investors. Within IOSCO’s Assessment Committee, the SC contributed to the development of Guidance Material for users of the IOSCO’s Assessment Methodology for the for Assessing Implementation of IOSCO Objectives and Principles of Securities Regulation.
The SC is also a member of the IOSCO’s Primary Markets Network and Diversity Network. Through the discourse in these various fora, the SC is able to gain insights and tap on relevant experience and expertise of regulators in other markets.
Within the Asia Pacific region, the SC is actively involved in the Asia Pacific Regional Committee, leading and participating in different working groups. As Chair of the APRC Small and Medium Enterprises (SME) Working Group, the SC published a Report on SME financing through regional capital markets which discussed regional SME financing needs and considered challenges and solutions to facilitate the development of effective SME financing within capital markets. In June 2024, the SC joined the newly established APRC Scams Online Working Group to exchange experiences to mitigate scams and online harms, including curbing the promotion of unlicensed/unregistered products via social media platforms. The SC is also a member of APRC’s SupTech Working Group which looks at issues and challenges of RegTech/SupTech solutions in APRC jurisdictions.
At the annual EU-Asia Pacific Regulatory Forum held in conjunction with the APRC meeting in February, senior policymakers from the European Commission and Asia Pacific securities regulators discussed key policy and market developments within the respective regions. These included areas relating to fintech (crypto assets, operational resilience and artificial intelligence) and sustainable finance (ESG disclosure, taxonomy and transition finance).
The SC is also a leading member of IOSCO’s Growth and Emerging Markets (GEM) Committee, which comprises 80% of IOSCO’s overall membership. As a GEM Steering Committee member and a member of the GEMC’s Market Development Working Group, the SC also profiled the SC’s Roadmap for catalysing SME access to the capital market in Malaysia to help shape future GEMC agenda and discussions on market development at the GEMC annual meeting that took place in December.
In November 2024, the SC collaborated with the World Federation of Exchanges (WFE) to host a dialogue in Kuala Lumpur. Held alongside the WFE’s 63rd Annual General Meeting, the event was attended by over 100 senior regulators and exchange heads to address emerging issues and promote stronger collaboration in the global capital markets. The dialogue focused on three pivotal areas: the interplay between private and public markets; the roles of regulators and exchanges in advancing sustainable finance; and the impact of emerging technologies on market structure.
An important priority area for the SC has been to strengthen cross-border co-operation in the areas of enforcement and supervision. Since 2007, the SC has been a signatory to the IOSCO Multilateral Memorandum of Understanding (MMOU) on co-operation and the exchange of information, which allows the SC to obtain valuable information and evidence to support the SC’s enforcement actions. In 2024, the SC made approximately 20 requests for assistance from its international regulatory counterparts under the IOSCO MMOU. Strong co-ordination with international securities regulators through this global information sharing network has strengthened the SC’s enforcement capabilities in dealing with cross-border market misconduct.
Recognising the importance of experience-sharing in the areas of cross-border supervision, enforcement and surveillance, the SC participated in the APRC Supervisory Directors’ Meetings and Enforcement Directors’ meetings. In June, the SC also chaired the Asia Pacific Regional Market Surveillance Dialogue in Kuala Lumpur where discussions focused on the impact of social media on trading activity and the regulatory developments on digital assets.
The IOSCO Asia Pacific Hub (Hub), established in Kuala Lumpur in 2017, continued to deliver capacity building activities for securities regulators globally. Hosted by the SC, the Hub represents IOSCO’s only presence outside of its headquarters in Madrid, Spain. Since its establishment, the Hub has come to play an important role in building the regulatory capabilities of IOSCO members, with more than 2,500 participants having benefitted from the Hub’s programmes.
In 2024, the Hub’s capacity building covered areas relating to Anti-Money Laundering/Counter-Terrorist Financing Regulation for Virtual Assets and Virtual Asset Service Providers (a collaboration with the Financial Action Task Force), IOSCO-World Bank Workshop on Sustainability Reporting Adoption Roadmaps, Market Surveillance: Emerging Trends and Tools, Combatting Fraud and Online Scams, Jurisdictional Approaches in the regulation of Crypto and Digital Assets and Decentralised Finance, and Operational Resilience: Lessons for Regulators from CrowdStrike outage.
Moving forward, to further support capacity building efforts, the Hub will seek to collaborate with other international organisations and entities and to provide technical assistance, produce and circulate educational briefings and seminar proceedings on topics relevant to capital markets.
The SC has been an active participant in the ASEAN Capital Markets Forum (ACMF) since its establishment in 2004. In particular, the SC has played a vital role in guiding the ACMF’s sustainable finance agenda through its role as Co-Chair of the ACMF Sustainable Finance Working Group (SFWG), which was responsible for the development and publication of the ASEAN Green, Social, Sustainability, and Sustainability-Linked Bond Standards and the ASEAN Sustainable and Responsible Fund Standards between 2018 and 2022.
In 2024, the SC continued its contribution towards the field of ASEAN Sustainable Finance through its work the ASEAN Taxonomy for Sustainable Finance, which launched its 3rd version in March. Technical Screening Criteria (TSC) released in Version 3 outlined quantitative criteria for two additional focus sectors, namely (i) Transportation and Storage; and (ii) Construction and Real Estate, bringing the total number of focus sectors covered by the ASEAN Taxonomy to three. The new focus sectors cover activities including construction and renovation of buildings, demolition and site preparation, and acquisition and ownership of buildings, as well as urban and freight transport, and infrastructure for land, water, and air transport, among others.
The Green tiers for these new focus sectors have been aligned, where appropriate with relevant sectoral guidelines and regulations (e.g. International Maritime Organisation (IMO) 2023 GHG Emissions strategy, International Green building certifications), to ensure that the ASEAN Taxonomy remains credible, interoperable, and inclusive while reducing regulatory fragmentation. The Green tier of the ASEAN Taxonomy continues to refer to widely used international taxonomies such as the EU Taxonomy and where relevant, will be tailored according to ASEAN’s unique circumstances. The Amber tiers serve as a transition category, providing a useful stepping stone for companies to learn and adjust their activities in pursuit of the green tier.
The SC has been working closely with fellow regulators in the region, and BNM to ensure the ASEAN Taxonomy is aligned with other guidelines and standards already in existence, including the Principles-Based SRI Taxonomy issued by the SC, and the Climate Change and Principlebased Taxonomy (CCPT) issued by BNM. Version 3 of the ASEAN Taxonomy has undergone a stakeholder consultation process in the second half of 2024, with TSCs for future versions soon to be developed. The ACMF also released the ASEAN Transition Finance Guidance (ATFG) Version 2 on 22 October 2023, which addresses how an entity may assess and/or demonstrate a credible transition. Following the release of the first version of the ATFG in October 2023, the ACMF undertook a targeted stakeholder consultation process, which resulted in the introduction of several key elements to further clarify and adapt the ATFG to the needs of ASEAN.
Key additions include detailed clarification on types of transition finance available and covered by the ATFG, as well as guidance on the use and augmentation of existing reference pathways in an ASEAN context. In October 2024, the SC officially took over as ACMF Chair from the Lao Securities Commission Office (LSCO), for the year 2025. With a vision of a more interconnected ASEAN capital market, the SC looks forward to its chairmanship, with emphasis on sustainability and inclusivity, leveraging ASEAN’s key strengths of its growth, demographic dividends, and savings to GDP.
From 28 to 30 October 2024, Malaysia hosted the 41st ASEAN+3 Bond Market Forum (ABMF), marking the country’s debut as the host of this event since its establishment in 2010. Co-organised by the SC and the Asian Development Bank (ADB), the forum was officiated by Datuk Johan Mahmood Merican, Secretary General of Treasury, Ministry of Finance Malaysia. Held at the SC, the forum brought together over 180 participants, including policymakers, regulators, and financial leaders from ASEAN+3 countries. With the theme ‘Sustainable Finance and the Role of Ethics’, it provided a platform to discuss sustainable finance, regional bond market integration, and cross-border settlement solutions, aligning with Malaysia’s preparations for its ASEAN Chairmanship in 2025.
In his welcoming remarks, SC Chairman Dato’ Mohammad Faiz Azmi emphasised that finance must transcend numbers and serve as a force for sustainable, ethical change. He highlighted Malaysia’s leadership in advancing sustainable finance through innovative frameworks such as the SRI Sukuk Framework, Maqasid Al-Shariah Guidance, and the MyCIF. These initiatives demonstrate the SC’s commitment to fostering inclusivity, building an ethical financial ecosystem, and addressing regional sustainability challenges.
A key highlight of the forum was the fireside chat between the SC Chairman and Ken Shibusawa, the great-great-grandson of Eiichi Shibusawa, the father of Japanese capitalism. The session, live-streamed globally, emphasised the need to integrate ethical values into financial practices to tackle climate challenges and build economic resilience.
The forum further reinforced Malaysia’s role as a hub for bond and sukuk markets, while addressing key regional and global challenges, such as limited private sector participation in sustainability initiatives and the financing gap for sustainable infrastructure. By advocating for solutions like blended finance and collaboration through platforms such as the ASEAN Taxonomy, Malaysia demonstrated its commitment to advancing sustainable and inclusive financial solutions in the region. As Malaysia prepares to assume the ASEAN Chairmanship in 2025, the SC is committed to strengthening partnerships and promoting innovation in sustainable finance.
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.
