SC Malaysia and Hong Kong SFC sign agreement for greater regulatory cooperation

From right: Securities Commission, Malaysia Chairman Tan Sri Md Nor Md Yusof and Securities and Futures Commission of Hong Kong Chairman, Andrew Sheng signing Letter of Intent to enhance regulatory cooperation and enforcement.

Securities Commission (SC) today signed a Letter of Intent (LOI) with the Securities and Futures Commission of Hong Kong (SFC) to enhance regulatory cooperation and enforcement between the two regulators.

SC and SFC aim to facilitate the development of deeper and broader investment markets in both jurisdictions through the harmonisation and equivalence of regulatory frameworks in the areas of regulation, supervision and marketing of mutually agreed investment products.

The LOI also states the intention of the regulatory bodies to explore the possibility of establishing a mutual recognition regime for mutually agreed investment products regulated by each respective authority.

SC and SFC also resolved to strengthen supervision of cross-border capital market activities, and to increase mutual assistance in the areas of enforcement.

The LOI was signed by the SC Chairman Tan Sri Md Nor Md Yusof and SFC Chairman
Andrew Sheng in Kuala Lumpur.

Tan Sri Md Nor said the signing of the LOI today marked another milestone in the SC’s efforts to enhance regulatory and enforcement linkages with other securities regulators, with a strategic view of enhancing the position of Malaysia’s capital market internationally.

The LOI will also allow the SC to explore possibilities to increase the breadth and depth of the Malaysian investment products by leveraging on the strengths of the Hong Kong capital markets, in line with the aims outlined in the Capital Market Masterplan (CMP).

“We have been pursuing strategies to enhance global compatibility and connectivity of the Malaysian capital market. As we move into the third phase of the CMP, there is a need to add diversity to the market landscape, accelerate the innovation of products and services, and create opportunities via collaborations with regulators such as the Hong Kong SFC to expand Malaysia’s reach in international markets,” he said.

“SC and SFC have a long history of cooperation and mutual assistance, dating back to 1994 when both regulators signed a Memorandum of Understanding (MoU) on information sharing and enforcement. Today’s signing marks a further step in the development of the already close relationship between us,” said Tan Sri Md Nor.

The SC is committed to international cooperation and has to-date signed 23 MoUs with securities regulators worldwide.

Andrew Sheng said the SFC is committed to strengthening regional financial market
co-operation in order to raise the quality of the Asian markets and promote investment in financial products originating in the region.

“By signing this LOI, the SFC enters into a partnership with the SC in a demonstration of our mutual intention to enhance the level of regulatory co-operation between our respective markets in line with the objectives and standards of IOSCO (International Organization of Securities Commissions). Malaysia and Hong Kong are important securities markets in Asia. We hope to open up regional fund markets through the cross-border trading of financial products in our respective jurisdictions,” said Andrew Sheng.

The LOI is the sixth to be signed by the SFC.

15 July 2005