Introductory Remarks at the Capital Market Master Plan 3 Launch
21 September 2021  |   By Datuk Syed Zaid Albar, Chairman, Securities Commission Malaysia
Introductory Remarks by
Datuk Syed Zaid Albar
Chairman, Securities Commission Malaysia

Capital Market Master Plan 3 Launch
21 September 2021

Yang Berhormat Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz, the Honourable Minister of Finance,

Distinguished guests, ladies and gentlemen
Assalamualaikum Warahmatullahi Wabarakatuh
And a very good morning.

1. Malaysia’s capital market sits at a critical juncture. Past policy interventions have laid strong foundations and brought an admirable level of growth and maturity.
2. Success is the result of hard work, sustaining it is even harder. Maintaining the status quo is not an option as it leaves the capital market unprepared for the future. It also risks falling behind in a rapidly changing and competitive environment. We must press on to achieve sustainable progress.
3. The path ahead is, without doubt, uneven. Today, there exists much uncertainty within the global environment. The structural needs of our domestic economy going forward will be different. New trends and behaviours are set to alter the overall market landscape.
4. As we navigate these changes, what also needs to be considered… is whether the capital market has served the underlying needs and aspirations of the country and its people. It must also be underpinned… by robust processes and governance practices for long-term resilience, growth and sustainability.

CMP3 Backdrop

Ladies and gentlemen,

5. Over the last decade, established market segments, such as corporate bonds and sukuk, fund management, and the Islamic capital market or ICM, have sustained their strong growth momentum. Alternative market-based platforms have also gained prominence during this period; attracting high levels of participation from issuers and investors alike.
6. As we embark on a new chapter with the third Capital Market Master Plan or CMP3, it is an opportune time to recalibrate our approach and outlook as Malaysia rebuilds from the pandemic. The current market ecosystem must be enhanced to position it to support the transition to a stronger, more inclusive and sustainable nation.
7. The CMP3 will provide the roadmap towards this goal; setting the next stage of Malaysia’s market evolution and growth, as well as the SC’s regulatory expectations, and indeed its own regulatory approach. It also serves to align wider financial sector efforts; promoting better coordination across policy makers, regulatory authorities and industry.
8. For market participants, there is no better time to step up to ensure our capital market remains relevant to businesses, investors and other key stakeholders. It is also important that the intermediation ecosystem remains as facilitative as possible whilst promoting flexibility, efficiency and diversity. This will ensure alignment with the CMP3’s desired outcomes; to be relevant, efficient and diversified.
9. As all of you will be aware, the CMP3 outlines our plans for the next five years. We believe this strikes the right balance between being sufficiently long-term and retaining a degree of strategic agility given prevailing circumstances.

CMP3 thrusts

Ladies and gentlemen,

10. A deep and well-diversified capital market is a necessary pre-requisite for the shift to high-income nation status. Apart from diversification and financing opportunities, it provides a fertile environment to allow innovative business concepts and the creative zeal of Malaysian entrepreneurs to flourish. Thus, the CMP3 was crafted to facilitate innovation and growth whilst promoting good governance.
11. I will now share the six development and regulatory thrusts that underpin this Master Plan. Insights from our internal and industry engagements made it clear that focus should be on areas with greater impact. Those that will not only generate the most value, but also provide complementary spillover effects.
12. First, greater market access coupled with a broad range of risk intermediation and fund raising solutions can provide a catalysing effect on our long-term competitive growth. Therefore, our capital market intermediaries and market ecosystem must be ready to better serve our corporate upstarts and titans of the future.
13. Second, climate action and the rise of the stakeholder economy will engender greater sustainability and inclusiveness. These pillars will reshape the economy for the better, with wider and positive impact for society and local communities. It calls for supportive market mechanisms and tools to be in place, particularly those related to sustainable and responsible investments (SRI) and ICM. The capital market must also continue to prioritise innovation, especially for green and sustainable solutions.
14. Third, the CMP3 prioritises savings accumulation and preservation to ensure that the benefits of growth accrue to all. It seeks to empower a wide spectrum of investors and provide better all-round experience across the investment lifecycle. We all recognise that investor behaviours are evolving and we must therefore enhance the suite of available investment options, as well as the quality of advice to meet their needs.
15. Fourth, under the CMP3, the regulatory approach will be to embed shared accountability. This entails encouraging responsible business conduct that upholds integrity, transparency and good governance. Market participants will be expected to demonstrate greater ability to self-regulate to preserve overall market integrity.
16. Fifth, the CMP3 emphasises clear outcomes and efficiency in regulatory actions. Targeted and outcomes-based enforcement as well as a more proactive supervision stance will assist in shaping market conduct. This will also ensure that vulnerable investors are less susceptible to harm.
17. We expect both these fourth and fifth thrusts will further engender trust and confidence in our capital market.
18. Finally, we anticipate technology to have an outsized role in driving the market and regulatory environment. Therefore, industry digital offerings and adoption will be thoroughly assessed to weigh their benefits and risks. Correspondingly, the SC also intends to increase the use of regulatory technology, RegTech, and SupTech, to promote greater market efficiencies and enhance compliance and reporting processes.

CMP3 is a shared journey

Ladies and gentlemen,

19. The CMP3 aspires for a capital market that benefits each and every one of us. This includes the young and old, our future generations, intermediaries, as well as a wide range of issuers and business models – be they large, medium or small.
20. In developing the Master Plan, we relied on our collective institutional strength across the organisation, guided by the keen insight and judicious foresight of our executive management team. I would also like to record my appreciation for the invaluable input of industry and our various stakeholders, including the Finance Minister and the Ministry of Finance.
21. The way forward requires steadfast determination, cooperation and commitment from all stakeholders. We need to come together to overcome the challenges ahead and seize the opportunities. ‘Berat sama dipikul, ringan sama dijinjing’.
22. It will be our collective responsibility to work together to bring these strategic thrusts and desired outcomes to fruition and effect a meaningful change.
23. On that note, it is my honour to now welcome Yang Berhormat Tengku Datuk Seri Utama Zafrul to deliver his keynote address and launch the CMP3.
   
Thank you.
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