Signing Ceremony of the
Memorandum of Understanding
for the Regulation of the Securities and Futures Markets
Securities Commission
Kuala Lumpur Stock Exchange Berhad

5 January 2004
(MoU document)

Remarks by
Datuk Ali Abdul Kadir
Chairman, Securities Commission

Y. Bhg. Dato’ Mohd. Azlan Hashim, Executive Chairman, KLSE Berhad;
Members of the inaugural Board of the KLSE;
Fellow Commission members;
Colleagues, ladies and gentlemen,

Assalamualaikum and Good morning to all. It is indeed a great pleasure for me to be here today on this momentous occasion for us all.

First of all, let me congratulate the KLSE on its demutualisation. This is indeed the start of a new beginning of your organisation and we offer you full support in your future endeavours. The KLSE has grown from strength to strength and has been critical to the success of our capital market. With demutualisation, the opportunities for growth of the exchange business has expanded significantly and we hope to work closely together to realise the shared objectives of enhancing the liquidity of the market and widening the array of products and services available in the market. As our market matures, the needs of the investors, issuers and intermediaries have become more sophisticated. We hope to see KLSE rise to this challenge and establish the Exchange as an investment destination serving the needs of your users both domestically and globally. With demutualisation, your stakeholders will put you under a looking glass, requiring high standards of performance in all areas of activities. I am sure with the support of the SC, the government and the market participants, we will ensure the KLSE reaches its full potential.

Today is the culmination of over three years of work, since the recommendation was made in the Capital Market Masterplan. I would like to thank all those who worked tirelessly to achieve the demutualisation of the KLSE, both at the KLSE and at the SC as well as others who were involved. This was, I believe, one of the most intense projects we have worked together on. I am happy to note that the process, from the strategic issues to the legal, was smooth without any major impediments, and I believe this is a testament to the good working relationship established between our two organisations.

This Memorandum of Understanding that we will enter into shortly signifies an important step for the future growth of the exchange and the capital market. It is an important document which will guide the working relationship between our two organisations. The principles of co-operation and collaboration embedded in the MOU provides a foundation for shared ideals and common objectives. The formalisation of a process of review and re-assessment allows us to systematically work towards greater efficiency in the operations of the markets and greater effectiveness in the regulation and development of the market. It is particularly important now that we work seamlessly and offer the highest level of efficiency and security to our market participants that will in turn generate an environment conducive to capital market activities. It is towards this end that we enter into this formal arrangement.

Also, the KLSE and the SC have established a high-level committee to ensure timely resolution of any issues that may arise post-demutualisation. This includes issues which arise both at the strategic level as well as the operational level. The SC and the KLSE agree that co-operation and alignment in our areas of work are critical to reap the full benefits of the demutualisation exercise. Lastly, I wish the KLSE success in its future activities.

Thank you.