SC: Malaysia's securities settlement systems to be constantly enhanced to meet global standards

Kuala Lumpur, 19 November 2001

The Securities Commission (SC) of Malaysia assured the investing public that the country's securities settlement systems, which is already very advanced, will be constantly reviewed and upgraded to ensure that they are always at par with international standards. Sound securities settlement systems are a critical factor in the attractiveness and competitiveness of a capital market.

The SC expressed this in conjunction with the recent release of the report entitled "Recommendations for Securities Settlement Systems" by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (IOSCO).

The SC is a member of the joint CPSS-IOSCO Task Force on Securities Settlements Systems and is represented by its Director, Ranjit Ajit Singh. The Task Force was set up in 1999 and mandated with the responsibility of developing the recommendations contained in the Report. The SC together with 25 securities regulators and central bankers from 17 countries and the European Union sit on this Task Force.

"This is a very important document which will determine the developmental path of securities settlement systems globally. We have benefited from the membership of this Task Force and have contributed Malaysia's views to the work of the Task Force. It should also be noted that many of the recommendations have already been reflected within the Capital Market Masterplan. The SC together with operators of securities settlement systems have been and will continue to assess these recommendations and its application to the domestic scene,'' said the SC Chairman, Datuk Ali Abdul Kadir.

He added it is essential that our securities settlement systems meet global standards to ensure our capital market is competitive and attractive to investors. Securities settlements systems are an aspect of the capital market which is rapidly evolving internationally.

"Although Malaysia has a very advanced system in place today, we must ensure that our system is constantly reviewed and upgraded," said Datuk Ali.

The SC, following through from its close involvement in the formulation of the recommendations, will collaborate with industry on the implementation of these recommendations.

The report sets out 19 recommendations which define minimum standards that securities settlement systems should meet. The recommendations are designed to cover systems for all types of securities and applies to both domestic and cross-border trades.

The Task Force, in developing the recommendations, benefited greatly from the input of other central bankers, securities regulators, operators securities settlement systems as well as market participants.

In January 2000 the Task Force received input from central bankers and securities regulators who together represented about 30 countries, as well as from representatives of the International Monetary Fund (IMF) and the World Bank. A year after that, a consultative report was released for public comment.

As an important first step towards establishing a comprehensive methodology for assessing implementation, the report includes key questions pertaining to each of the recommendations, answers to which would form the basis of assessments. The Task Force plans to develop an assessment methodology in 2002. The IMF and the World Bank will participate in this next stage.

The report is available for viewing and downloading here in PDF format.


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The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.

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