Malaysian Futures & Options Registered
1 October 1996 |   By : Dato' Dr. Mohd. Munir Abdul Majid, Chairman, Securities Commission, Malaysia

I am indeed pleased, after some considerable planning by the SC's Securities Industry Development Centre (SIDC) and the universities with cooperation of KLOFFE (Kuala Lumpur Options and Financial Futures Exchange) and MME (Malaysia Monetary Exchange), we are able to launch the Malaysian Futures and Options Registered Representatives (MFORR) course for Universities. This is a pilot project fully sponsored by SC. If successful, the courses will be held regularly for graduating students of any discipline, although the arrangement for long-term funding has yet to be worked out. Designed for Bumiputra students, this first course involves 70 students from UKM, UIA and UM who will be attending the course from 6 to 15 May. Students who wish to sit for the real thing are reminded the next MFORR Examination is scheduled for 25 May 1996. From 6 to 15 June, SIDC is organising a similar course at Universiti Utara Malaysia, involving 40 students from UUM and USM. The MFORR examination following that course will be held on 22 June.

This is only the start of the effort by SIDC to get more Bumiputras sitting for and passing the MFORR examination so that there is meaningful Bumiputra participation in the financial futures and options industry. Since last month, SIDC has embarked on a major project to develop a derivatives module for the Advanced Diploma in Business Studies (Finance) programme offered by Institut Teknologi Mara (ITM). We have reached agreement in principle with ITM to structure the module in a manner that will cover the MFORR syllabus. Upon completion of the module, the students will be adequately prepared to sit for the MFORR exam and hence be licensed on passing it.

The action plan to successfully implement the project is as follows:-

  • Develop a set of materials to be used for the module. This involves careful preparation, for which we have sought the assistance of the Securities Institute Education in Sydney, at a cost which the SC would absorb.
  • Train ITM lecturers.
  1. To familiarise lecturers at ITM and the local universities with the MFORR materials, a MFORR refresher course was held for them in March. This was followed by an intensive course in Options Risk Management in April. And a one week computer simulation exercise on stock index futures is scheduled from 24 to 28 June.
  2. Other universities have expressed interest in the module. Once success-fully launched with ITM, similar arrangements may be extended to other universities. In any event, all current training programmes for ITM lecturers have been extended to university lecturers participating in the MFORR programme.
  • Set up a committee to review the materials. This will comprise representatives from KLOFFE, MME, MDCH, ITM and SC. In principle, they have all agreed to participate.
  • An MOU with ITM. In our discussions with the Dean and lecturers of the School of Business and Management, it has been agreed that SIDC will take ownership of the materials, and lease them to ITM on a free-of-charge basis. SIDC will bear the full cost of training the lecturers and of ensuring the quality and accuracy of the course materials. ITM will, however, be responsible for administering the exams, as this is part of their programme curriculum. To ensure there is no compromise on standards, there will be no exemption from the MFORR exam.

According to the SIDC implementation schedule, the project will be completed by September when we hope to sign the MOU with ITM.

The SC is not satisfied with the level of Bumiputra participation in the nascent futures and options industry, and is taking early steps, through SIDC, to address the situation. Of 159 futures broker representatives (FBRs) licensed up to 2 May 1996, only 23 or 14.5%, are Bumiputras. Only 2 of 18 registered locals are Bumiputras. We do not want a situation so many years down the road where the Bumiputras are left so badly behind. Bumiputras must participate fully in the development of the capital market and in the emergence of Kuala Lumpur as a regional capital market centre. Bumiputra must equally be able to provide the kind of financial services that will be de rigueur in the 21st century.

The exchange companies and individual firms in the securities and futures industry can do more in terms of training, including performing their social obligation in the training of Bumiputra professionals. Having Bumiputra numbers is not just a matter of going through the motions and of fulfilling quotas. The SC realises it is not a straightforward matter getting Bumiputras of the right quality in sufficient numbers, but the solution does not lie in getting any old number of Bumiputras to satisfy numerical requirements. The SC would consider this a frustration of national policy, and would be robust in rooting out such fronting.

As regulator of both the securities and futures industry, with also a developmental function, the SC looks forward to a new commitment to training and to performance of social responsibility. At the same time, the SC does not want to see a duplication and waste of resources in training and developmental efforts. As the central supervisory regulator, as well as the licensing authority, it is important that the SC be satisfied that appropriate measures are being taken to address its concerns, while standards are being achieved and maintained to satisfy professional and licensing requirements. The SIDC will play a central role in training and development in the industry, and it looks forward to the full cooperation of industry, so that national resources are not wasted while national objectives are properly achieved.

On your part, I hope you will take full advantage of this course and suitably prepare yourself if you wish to pursue a career in the financial futures and options industry. On this note, can I wish you success in the pursuit of this course.
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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.

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