Surveillance - Regulatory Performance and Outcomes

Surveillance

Upholding Market Integrity Through Strong Oversight of PLCs and Proactive Trading Surveillance

Maintaining investors’ trust in Malaysia’s capital market and preserving its integrity is essential for sustainable economic growth. The SC supports this mandate by monitoring and regulating PLCs, as well as undertaking surveillance of trading activities to ensure the capital markets operate with transparency, fairness, and accountability.

Corporate Surveillance and Governance Oversight

The SC proactively reviews company disclosures, financial statements and transactions to ensure listed companies comply with securities laws and financial reporting standards. The SC’s corporate surveillance function aims to protect investors and shareholders from risks associated with misinformation or misconduct.

The SC’s surveillance approach is driven by data and insights from company announcements, media coverage, and stakeholder feedback. In 2025, our monitoring highlighted several key observations, notably potential wrongful loss, financial misrepresentations, and other emerging risks. These findings underscore the importance of early detection and proactive intervention to safeguard investor interests and maintain market integrity. This enables us to identify potential issues at an early stage and act swiftly to prevent them from escalating. We regularly engage with company directors, auditors, and other key stakeholders to strengthen board accountability and promote sound corporate governance.

Fostering Compliance with Take-over and Merger Regulations and Maintaining Effective Regulation

Towards ensuring compliance of the securities laws, the SC closely monitors compliance of, among others, the take-over requirements to detect misconduct and breaches which could jeopardise the interests of the investing public. In line with its principle of being an open and engaging regulator, the SC encourages early engagement by relevant parties or their advisers before undertaking transactions with take-over implications. Consultations during 2025 covered matters such as identification of ultimate offeror and persons acting in concert, exemptions from the mandatory offer obligation involving foundations and restructuring of holdings, conditions and pre-conditions to offers, and actions that may be tantamount to favourable deals or frustration of offer. This approach fosters a conducive environment for stakeholders to seek guidance from the SC through its consultation process where we aim to encourage greater compliance with the regulatory requirements for take-over and merger transactions. The SC and Bursa Malaysia also engaged in numerous discussions and dialogues during the year with the board of directors of companies to be listed on the Main Market or the ACE Market covering pertinent requirements to be observed by listed companies and their directors, including the key take-over regulations. This initiative aims to foster better understanding and support newly listed companies as they embark on their new chapter on Bursa Malaysia.

In addition to regulatory consultations, the SC hosted its annual dialogue on 13 October 2025 to discuss emerging trends and clarify expectations for greater regulatory alignment. The dialogue was attended by 60 representatives from 28 corporate finance advisory firms including members of Malaysian Investment Banking Association (MIBA) and members of Association of Corporate Finance Advisers (ACFA) involved in take-over proposals.

International benchmarking and collaboration with fellow takeover regulators remain vital in shaping the take-over regulations and policies in Malaysia. The SC maintains strong relationships with its counterparts through open channels of communication, enabling the exchange of insights and best practices to achieve effective regulatory outcomes.

The multi-pronged approach underscores the SC’s commitment in fostering a fair, efficient and transparent market, while ensuring that the take-overs regulations in Malaysia remain relevant and effective within an evolving capital market landscape.

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.