Kuala Lumpur, 23 September 2010

Increasing international recognition of Malaysia as a well-regulated capital market

The Securities Commission Malaysia (SC) today welcomed the move by FTSE to upgrade Malaysia to advanced emerging markets status from secondary emerging markets within FTSE-s Global Equity Index Series.

SC Chairman Tan Sri Zarinah Anwar said the move underlined the global recognition of the regulatory framework of the Malaysian capital market and could lead to greater international participation in the Malaysian market.

“We made great strides in strengthening our regulatory framework for the capital market over the past decade. All market participants in the Malaysian capital market have been subject to higher standards of governance, accountability and ethical conduct. This progress has been recognized internationally and this serves to enhance investor confidence in our capital market,” Zarinah said.

In 2007, Malaysia became a signatory to the International Organization of Securities Commissions (IOSCO) Multilateral Memorandum of Understanding (MMOU) for cross-border enforcement – one of the few emerging markets that qualified.  The following year, external assessors rated Malaysia as highly compliant of IOSCO-s best practices and principles of securities regulation.

Earlier this month, Malaysia was admitted as a member of the International Forum of Independent Audit Regulators, formal recognition of Malaysia-s Audit Oversight Board (AOB) as a well-structured, independent audit regulator on par with agencies of other jurisdictions.  Malaysia-s AOB is only the second such body in ASEAN to be admitted.

Malaysia-s capital market is already benefitting from international recognition of its quality in terms of providing a basis for the expansion of cross-border opportunities with other markets.

  • Earlier this year, Malaysia received recognition as an authorised market for Chinese investors when it became an approved investment destination under the Chinese Qualified Domestic Institutional Investor scheme (QDII).
  • Recently, the US Commodity and Futures Trading Commission (CFTC) allows Malaysian futures brokers to solicit orders and transact directly with US customers without being registered with the US regulator.
  • In recent years, Mutual Recognition Agreements were signed with Dubai and Hong Kong to facilitate cross-border distribution of Islamic mutual funds.