KUALA LUMPUR (Aug 3): Market regulators must have integrity and be facilitative to be able to create value, grow the capital markets and address future challenges, especially given the challenges that lie ahead, said Securities Commission Malaysia (SC) chairman Datuk Mohammad Faiz Azmi.
Mohammed Faiz said there must be trust that regulators treat everyone fairly for a fair and orderly market to exist.
He said regulars should also be seen as helping to develop the market, and not be so conservative as to hinder development and innovation.
“Building trust requires strong institutional frameworks and processes. This is why, like other regulators in the region, we have a dual mandate. In addition to ensuring a fair and orderly market, we also have a mandate to develop the capital markets.
“One indication of this is that the SC inherited a market which was about RM600 billion in size in the 1990s, we have assisted in the capital market to end last year at RM4.1 trillion, almost seven times larger,” he said in his keynote speech at the Malaysian Student Leaders’ Summit here, on Sunday.
However, Mohammad Faiz said not everything the commission encouraged over the last 30 years has worked, and some areas, like digital assets and carbon credits, still have some way to go before they become mainstream.
“But this second mandate of market development is to reassure the market that we, too, have an interest in growing the market,” he said.
Meanwhile, he said the SC is currently undergoing a review process to better understand where the capital market is today, and where it needs to be 20 years from now.
“Our plans are being developed but it is no secret that there are a number of challenges we need to address, such as improving the vibrancy of the capital market to ensure we can fund economic growth, ensuring the returns from products in the market keep pace and surpass inflation, and that when you all retire, there are funds to keep you comfortable and can cover your medical costs.
“At the same time, there are two areas in the medium term that we need to plan for — transition and adaptation financing to cope with climate change and post (US) Liberation Day (tariffs); [and] how we can be better friends with our neighbours in Asean,” he said.
Mohammad Faiz said there is a belief that when companies fail or incur losses, someone must be to blame.
“That is not always the case. Companies generally fail when their business gets disrupted, or they make bad business decisions.
“A point to ponder is that only five of the original 30 companies that made up the US Dow Jones Industrial index in the 1930s are still operating today. Most, if not all, have now disappeared, as they again had their businesses disrupted and failed to make the right calls,” he added.
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