5. The dialogue you have been having with the SC, I believe, is testimony to its commitment in obtaining direct feedback in terms of constructive views from the industry. I am heartened to be informed that some useful discussions have taken place over the past two weeks. I understand you have raised some very important issues and have provided some useful feedback to the SC on how to proceed forward. The government lends its strong encouragement to these efforts and hopes that all parties will continue to leverage on these opportunities to facilitate our progress forward.

6. What I would like to do this morning is highlight some key areas in the Masterplan which the government views as urgent and of immediate priority.

7. A groundbreaking recommendation in the Masterplan which has far reaching implications on the market relates to the creation of a single Malaysian exchange which will be demutualised and listed on the stock market. Demutualisation, as the government views it, should not be a simple process of converting to a share-based entity. Instead, it should provide opportunities for the exchange to be better positioned to respond to the collective interests of broader stakeholders with the ultimate aim of becoming a more competitive and for-profit enterprise to serve as an efficient 'anchor' to the capital market

8. Going forward, the government supports the need to pursue international strategic alliances as part of the capital market's long-term strategy to attract critical mass, market liquidity and relevant expertise. A single exchange which is also demutualised and listed will certainly be in a more attractive position to negotiate such alliances.

9. It is also vital that we have a strong and competitive environment for intermediation services. We do not underestimate the importance of capital market intermediaries as they are the link between suppliers of finance and the users of capital and other financial products. With the increasing challenges posed by international competition, only the fittest will survive so to speak. Malaysian intermediaries with, among other things, greater financial strength, quality human resources, sufficiently diversified revenue base and integrated services can gain a higher competitive edge in terms of increased efficiency and can withstand greater resilience to financial shocks.

10. With this in mind, the SC has implemented the stockbroking industry consolidation programme as part of its efforts to develop a group of well-capitalised domestic stockbroking companies, known as Universal Brokers which can provide efficient and cost-effective intermediation services. I have been informed that the brokers which have not consolidated are actively seeking a suitable merger partner. Inevitably, there will be some pre- and post-merger problems such as valuation issues, culture clash, integration of systems and so forth. However, I trust the brokers' foresight, resourcefulness and confidence in overcoming these problems. So far, the SC has taken a market-driven approach in encouraging consolidation. The government hopes that it will not be required to undertake prescriptive actions, and will be keen on seeing significant progress in this area soon.

11. A key topic which has been widely deliberated upon relates to the area of corporate governance. We have worked hard to improve the standards of corporate governance and transparency in this country and will continue to do so. Market participants, particularly the foreign investor community, are recognising our efforts. We do not want to see the results of our good work being disrupted by inappropriate behaviour of market participants. The authorities will not hesitate to exercise its enforcement powers on transgressions committed by market players. On this note, I would like to reiterate that corporate governance is not entirely the responsibility of the authorities. Market participants are equally responsible in discharging their professional responsibilities in this area.

12. The amendments to the KLSE Listing Requirements in the middle of this year effected the implementation of the Malaysian Code on Corporate Governance. I would like to highlight that the Code is not meant to impose an unnecessary regulatory burden on companies. It should be looked upon positively as a guide to creating a culture of good corporate governance for the benefit of the company and therefore its shareholders. Undeniably, companies which adopt effective corporate governance best practices should command a higher premium in shareholder valuation.

13. Moving on, I understand that the SC is working with the other authorities to undertake efforts in further streamlining the regulatory process to achieve regulatory parity in the treatment of all participants in the capital market through functional regulation. The government recognises this as an important issue and that there remain some areas which need to be further addressed to ensure a level the playing field for all market participants. In this regard, the government pledges its commitment to provide the necessary support to facilitate and expedite the implementation process.

14. The development of a vibrant and competitive investment management industry is a key area in developing greater liquidity of the Malaysian capital market. As part of the efforts to develop a more active industry, the government recognises that there should be greater liberalisation in certain areas of the industry. Equally as important, however, investment management companies should be more innovative and should further enhance the value of their products and services to cater the needs of domestic as well as foreign investors. Furthermore, the government also wants to see all major institutional investors play a more active role in adopting and promoting a culture of proactive shareholder activism, whether through their participation in the Minority Shareholder Watchdog Group or in any other relevant forum.

Conclusion

Ladies and Gentlemen,

15. The government is sincere in its efforts to develop a premium Malaysian capital market and we have full confidence that we can achieve our strategic goals. However, the government alone should not bear the responsibility of undertaking this huge task. It is encumbered on market participants to provide strong collective commitment and support to ensure that our market continues to be attractive and competitive in the wake of heightened global competition and economic uncertainties.

16. Our journey towards a more competitive, efficient and resilient capital market will undoubtedly encounter numerous challenges. Therefore, we must be strong and confident that we can overcome these challenges, and we should-in our Prime Minister's words- 'earnestly and zealously push through with the reforms marked out in the Masterplan, be prepared to learn the lessons from the financial crisis, and change the way we invest and conduct business'.

Thank you and have a productive day ahead.