Malaysian Securities Commission (SC) and The China Securities Regulatory Commission (CSRC) sign Memorandum of Understanding

Beijing, 18 April 1997

The Securities Commission of Malaysia (SC) and The China Securities Regulatory Commission (CSRC) formalised their mutual assistance and co-operation when they signed a Memorandum of Understanding today providing for international co-operation between the two regulatory authorities.

The MOU was signed by Mr. Zhou Daojiong, Chairman of The China Securities Regulatory Commission and Dato' Dr. Mohd Munir Abdul Majid, Chairman of the Securities Commission Malaysia.

Dato' Munir said that the MOU was signed by the two regulators in anticipation of the cross-border needs of the Malaysian and Chinese investors.

"We as regulators must work together to ensure that there are sufficient safeguards for these investments," he said.

The MOU formalises this need and strengthens the working relationship that already exists between the regulatory authorities of Malaysia and China. It establishes a framework for the provision of assistance, exchange of information and mutual investigative assistance, to the extent permitted by the laws of the respective countries, for the purpose of protection of investors.

In furtherance of these objectives, the two regulators will endeavour to provide each other, wherever or whenever possible, the necessary assistance to facilitate the effective administration and enforcement of their respective laws, regulations, rules, guidelines, procedures and practices relating to their respective securities industry.

Mr. Zhou said China was in the process of standardising the way it regulates its securities and futures market and hopes to benefit from the exchange of information and cooperation with fellow regulators of the International Organisation of Securities Commissions (IOSCO). He cited Malaysia as one of those countries which CSRC can learn from.

"As an emerging capital market, Malaysia has accumulated many experiences in the development of its securities and futures market," said Mr Zhou.

The Chairman of the CSRC also highlighted that as developing countries, China and Malaysia have had a long term friendship and in recent years their economic and trade links are becoming closer.

"The signing of the MOU will establish channels of communication and mark a new phase of cooperation in securities and futures markets of the two countries," said Mr. Zhou.

Dato' Munir added that Malaysia was the first ASEAN country to establish diplomatic relations with China and it was noteworthy that Malaysian companies were among the earliest direct investors in China. While direct investments have grown, he noted that portfolio investments were still at an embryonic stage.

"We have observed, from a distance, and with great admiration, the rapid growth of the Chinese capital market under the guidance of the CSRC. We believe, in the fullness of time, that portfolio flows will follow where direct invesmtnets have already blazed the trail.

"Investors in Malaysia would wish to diversify their portfolios to include securities issued in China, and the converse would be true of the Chinese investors wishing to seek new opportunites in our capital markets," said Dato' Munir.

The signing ceremony was witnessed by delegates attending IOSCO's Asia-Pacific Regional Committee meeting and the Heads of Enforcement meeting which was held in Beijing.

SC has signed MOUs with its counterparts in Indonesia, Hong Kong and Thailand while the CSRC has signed with Hong Kong, the US, Japan, the UK, Singapore and Australia.


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