Bursa Malaysia to establish a subsidiary to take over regulatory functions

Bursa Malaysia to establish a subsidiary to take over regulatory functions

KUALA LUMPUR: Bursa Malaysia Bhd will establish a wholly-owned subsidiary to assume the regulatory functions currently undertaken by Bursa Malaysia (Bursa RegSub).

The Securities Commission Malaysia (SC) and Bursa Malaysia, in a joint statement yesterday, said both of them have been working closely, to further enhance the governance structure of the exchange, by segregating its regulatory functions from its commercial objectives, to address perception of potential conflicts of interest between these two roles.

“The Bursa RegSub will be governed by a board of directors, a majority of whom will be independent of Bursa Malaysia.

“The chairman of Bursa RegSub will be appointed from amongst the independent board members,” they said.

SC chairman Datuk Syed Zaid Albar said in this regard, Bursa Malaysia remains accountable to the SC, to ensure that Bursa RegSub is allocated sufficient financial and human resources, to enable it to discharge its regulatory functions effectively.

“The SC will continue to regulate Bursa Malaysia directly as a listed company, as well as a market operator, while maintain oversight of the regulatory functions performed by Bursa RegSub,” he said.

Meanwhile, Bursa Malaysia chairman Datuk Shireen Ann Zaharah Muhiudeen said Malaysia’s capital market is globally recognised as forward-looking, well-regulated and ranks highly in investor protection.

“The exchange will continue to work with all stakeholders in our effort towards building a vibrant and competitive marketplace,” she said.

The statement said the establishment of Bursa RegSub will put Malaysia’s stock market regulatory framework in line with jurisdictions such as Singapore, Japan and Brazil.

The SC and Bursa Malaysia will review and finalise the implementation details, to ensure a seamless transition of the exchange’s regulatory function to the subsidiary, which is expected to be operational by year-end.