Building a More Inclusive Capital Market - Advancing a Vibrant, Inclusive and Sustainable Capital Market with Regional and Islamic Leadership

Building a More Inclusive Capital Market

In 2025, the SC intensified efforts to advance inclusivity across Malaysia’s capital market, ensuring that opportunities for wealth creation and financing are accessible to a broader spectrum of participants. Initiatives focused on lowering entry barriers, empowering informed decision-making and strengthening participation among retail investors, MSMEs and underrepresented groups.

Key measures included introducing new access mechanisms in the securities and derivatives markets, enhancing advisory practices to incorporate sustainability preferences, expanding capital-raising avenues for MSMEs and MTCs, and scaling up ESG disclosure capabilities across local and regional SMEs.

Through these initiatives, the SC continues to build a more inclusive capital market that enables meaningful participation and supports Malaysia’s long-term economic resilience.

Expanding Access and Participation Across the Securities and Derivatives Markets

Efforts to promote market inclusivity across the securities and derivatives markets centred on expanding access and participation across different segments of investors. The SC worked closely with market intermediaries and exchanges to introduce initiatives that lower entry barriers and encourage broader retail engagement. This included the introduction of the Bursa Malaysia Shares2U Scheme and Mini FTSE Bursa Malaysia Kuala Lumpur Composite Index Futures (FKLM) Contract. Collectively, these measures aim to foster a more inclusive capital market by making investing more accessible, flexible and affordable.

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.