KUALA LUMPUR, June 18 (Bernama) -- The Securities Commission Malaysia (SC) and Bursa Malaysia Bhd (Bursa) are confident the Malaysian equity market will remain resilient, although emerging markets continue to go through periods of uncertainty due to concerns over the sustainability of global economic growth.

In a joint statement today, they said that they would remain committed in their efforts to ensuring the Malaysian capital market continued to grow and support the economic needs of Malaysia.

The SC and Bursa have introduced several initiatives over the years to enhance the competitiveness of the Malaysian capital market.

"While some market vibrancy measures have faced headwinds in light of global uncertainties, the SC and Bursa will continue to work with the industry to identify new business opportunities and growth areas, as well as design a facilitative and efficient ecosystem to enhance the attractiveness of the market," they said.

On the back of a stable macroeconomic environment, they said the Malaysian capital market continued to provide an avenue for mobilisation and utilisation of long-term funds for development.

An average of RM16 billion per annum was raised through the equity market in the last five years while the equity market capitalisation had grown to RM1.7 trillion as of end-April 2019, the regulators said.

"Healthy growth in Malaysia’s fund management industry’s asset under management, which now stands at RM786 billion, has enabled greater mobilisation of savings and expansion of other market segments.

"Over 900 small and medium enterprises have also benefited from equity crowd-funding and peer to peer financing arrangements, which saw these companies successfully raise close to RM350 million over the last three years for their business expansion.”

In relation to licensed capital market intermediaries, their compliance with financial requirements remained relatively strong as a high percentage of intermediaries were well-capitalised with sufficient liquidity positions, while clients’ margin exposures were well-managed, said the regulators.

Promoting good governance and ensuring fair outcomes for investors were at the core of the SC and Bursa’s regulatory priority, they said, adding the intermediaries were expected to uphold the highest level of professionalism and ethical conduct when dealing with investors.

Over the last decade, the SC and Bursa have applied various intervention tools in order to instill greater market discipline in the most efficient and effective manner.

To enable the Malaysian capital market to compete regionally and remain attractive, investors need to be assured, among others, that the market operates in a fair and orderly manner,  companies’ financial statements are reliable, and intermediaries are competent with strong governance and internal systems, and always act in the best interest of their clients.

In this regard, the regulators’ ongoing reviews have indicated that the intermediaries have increased their investments in people and systems to improve compliance culture and enhance self-discipline when managing business and regulatory risks.

 A majority of brokers, they said, had also implemented trade surveillance systems which have enabled them to detect suspicious transactions early, leading to an increase in self-reporting and collaboration with regulators in mitigating the breaches detected.

As market discipline continues to strengthen, the SC and Bursa will proportionately scale down the intensity of regulatory discipline.

Moving forward, the regulators said they would adopt a facilitative and dynamic surveillance and supervisory approach in tandem with the maturity of the market and level of market discipline achieved, whereby market and self-discipline will be prioritised as regulatory discipline is liberalised.

The pursuit of industry best practices would be driven by disclosures, self-reporting and engagement with intermediaries, they added.

While the SC and Bursa will continue to provide guidance to intermediaries to strengthen their governance processes, the intermediaries have to put more efforts in invigorating the market by increasing their customer base, enhance efficiency and improve investors’ experience when they trade in the market or consume capital market products and services.

The regulators said they would also be engaging all stakeholders to seek ideas and obtain feedback on measures which will drive and support a market-friendly and vibrant capital market.

-- BERNAMA