The SC’s Priorities - Regulatory Performance and Outcomes

The SC’s Priorities

Strengthening Market Transparency and Investor Protection

Transparency and robust governance are the foundation of a resilient capital market. In line with this principle, the SC continues to refine regulatory frameworks to ensure that fundraising activities, corporate transactions, and product design and distribution are conducted in a fair, orderly, and accountable manner. These initiatives underscore the SC’s unwavering commitment to investor protection and safeguarding market integrity.

The SC Revises Equity Guidelines to Strengthen Market Transparency and Governance

In early 2025, the SC issued the revised Equity Guidelines to strengthen governance standards and enhance market transparency. The amendments introduced key enhancements to the requirements on significant changes in business direction or policy of listed corporations, including back-door listings and reverse take-overs, as well as improved disclosure of ultimate beneficial owners in corporate proposals. These measures reinforce the SC’s commitment to promoting robust corporate governance and safeguarding investor confidence in Malaysia’s capital market.

The SC Updates Guidelines on Offer of Shares by Unlisted Public Companies

In March 2025, the SC issued the new Guidelines on Offer of Shares by Unlisted Public Companies (UPC Guidelines) to enhance investor protection and uphold market integrity. The UPC Guidelines introduce stricter disclosure and conduct requirements, including mandatory consultation with the SC, appointment of a corporate finance adviser, and strengthened reporting obligations. These measures address concerns on misleading return promises and inadequate risk disclosures, while ensuring that share offerings by unlisted public companies are conducted responsibly and transparently.

Introduction of Product Governance Framework for Specified Capital Market Products

On 24 June 2025, the SC introduced the Guidelines on Product Governance (PGG) to strengthen investor protection in the capital market. The PGG requires issuers and distributors to embed investor interests in product design and distribution. Key provisions include clear board and management accountability, enhanced product suitability for target markets, and stronger collaboration between issuers and distributors.

The PGG was formulated through comprehensive consultations with domestic and international stakeholders and benchmarked against global best practices. The PGG will apply to unlisted capital market products except for ordinary shares, over-the-counter derivatives contracts, venture capital or private equity funds and products offered on platforms operated by a recognised market operator.

To facilitate a smooth transition, the industry was given a six-month familiarisation period prior to its effective date on 2 January 2026. This initiative reflects the SC’s commitment to embedding investor-centric principles throughout the product lifecycle, while encouraging industry innovation that is both responsible and sustainable.

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.