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The Securities Commission Malaysia ( SC ) on September 21 launched the third Capital Market Masterplan ( CMP3 ), which will serve as a strategic framework for the growth of the country's capital market over the next five years. It seeks to leverage on the strengths and potential of the Malaysian capital market to accelerate economic growth that is sustainable and inclusive.
“The CMP3 fits well into the nation’s aspirations as one of the key enablers that will pave the way for a wider population to participate in the nation’s growth by enabling more inclusive and accessible investment products and distribution channels,” says Finance Minister Tengku Zafrul Abdul Aziz when he unveiled the CMP3 in a virtual ceremony.
SC chairman Datuk Syed Zaid Albar says Malaysia is now at a critical juncture in its post-pandemic journey. “It is imperative for the capital market to continue to support the economy as we transition into an inclusive and sustainable nation,” he adds. “The progress in the capital market cannot be measured solely by growth and size, as it also has to serve the underlying needs and aspirations of the country and its people.”
The CMP3 takes into consideration global megatrends that will shape the recovery and growth of global and Malaysian economies as it steers the capital market towards three desired outcomes:
To achieve these desired outcomes, the CMP3 outlines six key development and regulatory thrusts that will collectively serve as pillars in developing strategic initiatives over the next five years.
The first development thrust is facilitating fund raising for competitive businesses through a diverse market and intermediation ecosystem. The CMP3 also aims to empower all Malaysians to invest for their future and promote digital inclusion and protection for vulnerable investors. Furthermore, through the sustainable and responsible investments ( SRI ) and Islamic capital market ( ICM ) pillars, the CMP3 aims to shape a stakeholder economy by mobilizing more capital towards sustainable businesses.
In tandem, the SC’s regulatory approach will also evolve in response to changing trends and market landscape. The CMP3 strives to embed greater shared accountability within the capital market, particularly corporate responsibility to stakeholders beyond short-term profitability. It also aims to achieve a more efficient regulatory outcome and greater efficiency in investor protection through swift, effective and targeted enforcement and supervision approaches. In addition, as the industry becomes more digital, the CMP3 envisions greater use of technology – both regtech ( regulatory technology ) and suptech ( supervisory technology ) – for greater efficiency and deeper insights.
Over the past two decades, the CMP1 ( 2001-2010 ) and CMP2 ( 2011-2020 ) have successfully expanded the capital market while ensuring market stability and integrity. Malaysia now has a well-diversified capital market, with an equity market that has over 900 listed companies, a bond market that is the third largest in Asia, an Islamic capital market that is innovative and well-regarded globally, a derivatives market that leads in crude palm oil price discovery, and a unit trust industry that is one of the largest in the region.
In addition, governance strategies implemented during the previous masterplans have ensured robust regulatory oversight to enhance confidence in the integrity of the country’s capital market. The Malaysian capital market regulatory framework is benchmarked and ranks highly internationally with regard to, among others, investor protection standards, corporate governance and enforcement capabilities.
