Securities Commission signs Memorandum of Understanding with Financial Services Board of South Africa

Kuala Lumpur, 31 October 1997

The Securities Commission (SC) and the Financial Services Board of South Africa (FSB) today established a framework for assistance and mutual cooperation following the signing of a Memorandum of Understanding (MOU) between the two regulatory authorities.

The MOU signed by FSB Chairman, Dr. C. J. de Swardt, and Dato' Dr. Mohd. Munir Abdul Majid, SC Chairman, aims to provide each other with assistance and to facilitate the exchange of information between the two authorities in ensuring compliance with the securities and futures laws in their respective countries.

Dato' Munir said that the MOU signed by the two regulators acknowledges the substantial progress in trade and investment made between the two countries and reflects the spirit of South-South cooperation.

"With the growing cross-border needs of the investors of our two countries, as regulators, SC and FSB must work together to ensure that there are sufficient safeguards for these investments, " Dato' Munir said.

He added that statistics show South Africa to be the biggest Malaysian investment destination in the African continent, amounting to RM132.5 million or 2% of the total Malaysian gross investment overseas in 1996, while at the same time promises a remarkable potential for growth.

Speaking at the signing ceremony, Dr. de Swardt emphasised the need for cooperation among regulatory authorities, particularly in the face of globalisation of economies and markets.

Dato' Munir also said that increasing internationalisation of securities markets has created new challenges for domestic enforcement agencies.

"In this regard, the terms of the MOU have been formulated primarily to provide a workable framework for facilitating the exchange of information through agreed procedure which would both respect and accommodate the various dissimilarities between our two organisations and our respective domestic securities laws," he said.

The MOU provides for the establishment of a framework for cooperation, increased mutual understanding and exchange of information, to the extent permitted by the laws and practices of the respective countries, for the purpose of increased investor protection and further promotion of the integrity of the securities, futures and options markets.

In furtherance of these objectives, the two regulators agree to promote mutual assistance and exchange of information to enable the effective performance of their respective duties according to the law.

Dato' Munir added that both organisations are already actively involved in the global efforts of harmonising regulation in the securities markets, through their membership of the International Organisation of Securities Commissions (IOSCO).

The Emerging Markets Committee of IOSCO is chaired by Dato' Dr. Munir, while the Working Group 3 of the Emerging Markets Committee is chaired by the FSB.

SC has signed MOUs with its counterparts in Indonesia, Hong Kong, Thailand, China, and Kenya, while for the FSB this is the fifth MOU signed with its counterparts, and the second with an emerging market.


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