securities commission and capital market malaysia
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MOHD TAHA ABDUL RAHMAN
ISLAMIC BANKING AND FINANCE
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Securities Commission Officially established on 1st March 1993 under the Securities
Commission Act 1993. Prior to that, securities regulation in Malaysia was governed by
Companies Act 1965 & Securities Industry Act 1973. Significantly for investor protection Streamlined and cost effective regulation. The need for central regulatory agency. Before SC was established few agencies was overseeing the securities
industry such as MoF, KLSE, BNM, etc. The proposal came when Tun Daim Zainuddin suggests the
establishment of SC in March 1986 and supported by the IMF in 1990. It was part of the Sixth Malaysian Plan (1991) First SC Chairman Dato’ Dr Mohd Munir Abdul Majid (1993-1999)
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Capital Market Marketplace for buying and selling equities and debt based
instruments.
Retail and institutional investors (pension funds & mutual funds) versus government, businesses, individuals, etc.
Capital to generate the economic output.
Mainly for medium and long term debt or equity like stocks and bonds.
The more developed and bigger the economy of a country, the more complex and bigger the size of the capital market.
Provide significant source of funds for domestic economic activities and developing the economy.
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Significant Move Capital Markets Promotion Council (CMPC) was
established in 2013 to promote the development of securities and derivatives markets in Malaysia.
It was timely to lay out proper infrastructure and legal framework for the next phase.
2015 Malaysia will chair the ASEAN. This has given a new momentum for the capital market growth.
Open market policy and government ETP.
No 5 fastest growing equity market in Asia.
Foreign company can own 100% shares in UTMC
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Economic Outlook
7.40%
5.10%
5.60%
4.70%
5.70%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2010 2011 2012 2013 2014*F
Malaysia's Economic Outlook
Malaysia's Economic Outlook
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Capital Market Growth (RM Billion)
976.9
640.3
336.6463.8
2732
1646.8
1029.9
1541.2
0
500
1000
1500
2000
2500
3000
Capital Market Equity Market Debt Market Islamic CapitalMarket
2003
2013
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Islamic Capital Market (ICM) It all started in 1960s through Lembaga Urusan Tabung
Haji (later known as Lembaga Tabung Haji). Islamic Banking Act 1983 was passed with the
establishment of Bank Islam Malaysia. Takaful Act 1984 with the establishment of Syarikat Takaful
Malaysia in 1984. By end of 2014, Islamic Finance assets projected to surpass
us$ 2 trillion. (KFH Research) September 2014, United Kingdom first western country to
issue sukuk, followed by Hong Kong and Luxembourg amounted US$1 billion and 200 million euro.
As at Dec 2013, size of ICM stood at US$466 billion or 56% of market capitalization.
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Regulatory Framework High domestic savings and establishment of private pension
funds, fast growing fund management industry needs an efficient regulatory framework.
According to PWC report, Asian economies are set to grow faster than in the developed countries.
KLRCA was established in 1978. CMSA 2007. SC has outlined
1. Fiscal incentive & tax neutrality2. Strong corporate governance structure 3. International clearing and settlement systems4. Diversity of financial intermediaries. 5. Adoption of global legal and regulatory best practices.
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Market Movement Will Malaysia be fully liberalized?
Is Malaysian attractive enough to foreign investors?
Is current oil prices affecting growth of Malaysia?
Job losses happening in oil and gas sector?
Is GST really needed by Malaysia?
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Few Questions?
Thank You