Page 37 - SC Annual Report 2018 (ENG)

Securities
Commission
Malaysia
ANNUAL
REPORT
2018

Diagram 12
Levers towards a vibrant and effective secondary securities market

Market structure Issuers Investors

Diversity in Sustainable Digital channels
intermediaries to value creation to broaden
cater to different by listed access to more
investor segments companies investors

Diversity in trading Value recognition
instruments and of mid and small
strategies to cap segment to
improve market surface “hidden
liquidity gems” Incentives to
encourage diversity in
Digitising the investor participation
broking value chain Vibrant
to improve primary market,
intermediary greater participation
productivity and from SMEs
investor experience

Macroeconomic climate

The Malaysian External
economy – growth macro
and diversity climate

Greater growth across the industry limit of ≤200% of their effective
value chain shareholders’ funds. Non-bank-backed
brokers often reach the limit on margin
To remain competitive and relevant, it is imperative financing, and find it hard to compete with
for intermediaries to optimise existing resources, bank-backed brokers that leverage the bank’s
enhance productivity and improve investor capital to offer margin financing.
experience. Recognising this, the SC intensified its
focus in 2018 to work with industry players to Effective March 2018, the existing 200% limit
identify and reduce barriers to growth. for margin financing was removed but the
overall prudential safeguards under the
• Liberalising margin financing rules risk-based regime remained. This provided
brokers with greater flexibility in providing
Prior to the liberalisation, the exchange rules margin financing facilities to their clients,
limited the aggregate margin financing of a allowing them to be more competitive
Participating Organisation (PO) under a through better utilisation of their capital base.
risk-based regime as well as imposed a hard

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