SIDC Organises Futures Brokers Seminar

Kuala Lumpur, 27 November 1995

The Securities Industry Development Centre (SIDC) of the Securities Commission (SC) organised a one-day closed door seminar on futures brokers at a leading hotel in Kuala Lumpur today.

More than 160 participants comprising directors, heads of marketing and backroom operations, compliance officers and risk managers from the local future broking firms attended the seminar.

The event was organised in conjunction with the imminent launch of the Kuala Lumpur Options and Financial Futures Exchange Bhd (KLOFFE) and the Malaysian Monetary Exchange Bhd (MME).

Speakers from the SC, Kuala Lumpur Options and Financial Futures Exchange (KLOFFE), Malaysia Monetary Exchange (MME) and Malaysian Derivatives Clearing House (MDCH), addressed the participants on the rules governing, and operational aspects, of the futures industry.

Speakers included John Duggan of KLOFFE, Dato' Syed Abdul Jabbar Shahabudin of MME, Rodney Parker of MDCH, Lee Kah Leng of Malayan Banking, Gordon Vossler of Options Clearing Corporation, Chicago, and Mr James Lau of Commerce International Merchant Bankers (CIMB) Futures.

SSC Chairman Datuk Dr Mohd Munir Abdul Majid in his welcoming remarks said that SC has, and will, continue to adopt a consultative and receptive approach to ideas and suggestions from the industry to ensure the success of the market.

"I hope that the working relationship that is forged today between the Commission, the exchanges, the clearing house and the futures brokers will be one characterised by openness and mutual respect," said Datuk Munir.

Datuk Munir said that with the introduction of the futures market, the standards of the capital market have to be advanced and, in this respect, underscored the importance of professionalism.

"The test of development of a market is best gauged not just by the volumes of trades, not by the level of open interest, not even just its liquidity, but ultimately by the sophistication and professional conduct of its participants," said Datuk Munir.

"Our collective goal should be a market environment in which intermediaries and participants act in a professional and responsible manner towards the development of the futures market for the benefit of all who view their presence in the market as a long term one.

"For instance, the business rules of the exchanges will require that there is a compliance unit in every broking firm. We have also introduced a suitability requirement in respect of advice given by an intermediary to its client. The business rules of the exchanges will also crystallise some of the duties, responsibilities, obligations and liabilities that intermediaries have in relation to their clients," said Datuk Munir.

Datuk Munir drew participants' attention to recent happenings involving huge losses and collapse of financial institutions which did not have proper organisation and structure for management of their businesses, let alone risk management.

"Such cases should be studied carefully and the lessons from them should be taken to heart as the same could happen anywhere, whether it be in developed or emerging markets. In most cases, you will find that it was the 'kindergarten' matters or basic management principles that had been overlooked or neglected and not the lack of legislation" he added.


Issued by Corporate Affairs Unit. For further information, please contact Ms Nafizah Omar at (603) 2507550 or Mr Izelan Basar at (603)2507511.
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