Speaker: Dato’ Mohammad Faiz Azmi, Chairman, Securities Commission Malaysia
Location: Kuala Lumpur Delivered: 17 January 2025
Tan Sri Datuk Seri (Dr) James Foong Cheng Yuen, Chairman, FMOS, Datuk Jessica Chew Cheng Lian, Deputy Governor, Bank Negara Malaysia,
Datuk Datuk, Ladies and gentlemen,
Assalamualaikum warahmatullahi wabarakatuh, and good morning.
Investor protection is a core principle that underpins securities regulation. Typically, this involves investor outreach and awareness as well as enhancing financial literacy levels to enable investors to make the right decisions.
In most situations, investors get it right and are able to enjoy the rewards of their decisions. In a small number of cases, it doesn’t go well and so we need to provide avenues for dispute resolution to resolve any monetary claims for capital market services rendered or investments made.
For the Malaysian capital market, the Securities Industry Dispute Resolution Center (SIDREC) was established in 2010 precisely to play this role for investors seeking redress.
SIDREC’s mediation and adjudication services were provided free of charge to eligible investors, enabling them to avoid a costly litigation process.
From 2011 to 2024, SIDREC received a total of 3,922 claims and enquiries, of which 747 were eligible disputes.
In 2024, half of cases resolved under SIDREC were settled without resorting to adjudication. This means that out of 44 cases, 22 were successfully resolved through case management and mediation.
Interestingly, an analysis of 2023 data showed that some of these disputes could have been avoided if market participants had conducted better investor suitability assessments and provided clearer explanations with regards to online transaction issues.
Therefore, it is incumbent on our financial and capital market intermediaries to continue enhancing their own practices and SOPs, without waiting for reminders from the regulators. Indeed, transparency and good disclosures, helps with creating trust in their products and services.
Ladies and gentlemen,
Given the current operating environment, the merger of the Ombudsman for Financial Services (OFS) and SIDREC was the logical next step.
Today, integrated financial institutions offer capital market-related services via their investment banking, broking or even fund management arms.
On the other hand, some capital market providers also cross-sell financial products as part of their portfolio of services for clients.
Such bundling of services and more complex product structures calls for an integrated one-stop alternative dispute resolution centre to manage any investor and consumer disputes that may arise. More so as financial and market-based instruments grow more intertwined and sophisticated.
Hence, it was imperative for a merged entity to consolidate all existing processes for investor redress.
At this juncture, I would like to record my appreciation to the management and staff of the two legacy entities for their commendable work and dedication towards resolving disputes.
I would also like to congratulate the new Chairman and management of the Financial Markets Ombudsman Service who I am sure will do a splendid job in the future.
The newly merged entity is well positioned to deal with present and future investors as well as consumer needs. FMOS can also serve as a platform to raise the standards and service levels of financial institutions and market intermediaries.
My fervent hope is that FMOS will continue the good work of the predecessors entities, including preserving the trust built over the years.
With that, thank you and my best wishes to Tan Sri and FMOS.
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.
