Kuala Lumpur, 4 December 2008
Malaysia scores top marks for compliance with international standards in securities regulation
The Malaysian capital market regulatory framework scored top marks and achieved a very high level of compliance in an independent assessment conducted recently. The assessment was based on the IOSCO Objectives and Principles of Securities Regulation, the key global benchmark for the regulation of the capital market.
The rigorous and intensive assessment, which was conducted by a team of four international securities market regulatory experts, reviewed key aspects of securities regulation, including the responsibilities of the regulator, its enforcement powers, the regulation and supervision of primary and secondary markets and market intermediaries, and the management and operation of unit trusts.
The Securities Commission had, on its own initiative, embarked on the exercise to determine the extent to which the Malaysian capital market regulatory framework has complied with internationally-recognised principles. The thirty core Principles, adopted in 1998 by the International Organisation of Securities Commissions (IOSCO), are used by leading International Financial Institutions such as the World Bank and the International Monetary Fund to assess a country’s practice of regulation and supervision of securities markets in the Financial Sector Assessment Programmes. In addition, levels of adherence to the Principles are used by major international investors when evaluating the investibility of a market.
The IOSCO Principles are also one of twelve standards and codes highlighted by the Financial Stability Forum as key to sound financial systems and deserve priority implementation. Capital market regulators around the world are strongly encouraged to implement the IOSCO Principles in their respective jurisdictions.
The results achieved reaffirms that the Malaysian capital market regulatory framework, which maintains a high level of efficiency, fairness and transparency, is internationally benchmarked and is on par with many of the developed markets.