Page 76 - SC SCAR 2023 ENGLISH Flipbook

PART 3 STRENGTHENING THE SUSTAINABILITY AND COMPETITIVENESS OF THE CAPITAL MARKET
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SECURITIES COMMISSION MALAYSIA ANNUAL REPORT 2023
Providing Flexibilities for Secondary Listing of ETFs
The proliferation and popularity of ETFs over the past decade have significantly reshaped the investment landscape globally. Within this sphere, secondary listing which is the process of listing on multiple exchanges has become a strategic move for ETF issuers aiming to expand their reach and attract a broader investor base.
Recognising the limitations within the existing regulatory framework and the growth potential of this segment, the SC sought to enable greater flexibility and provided greater clarity on secondary listings of ETFs on Bursa Malaysia.
To this end, the SC has allowed foreign ETF operators to apply for secondary listing of up to five non-plain vanilla ETFs, such as leveraged ETF, inverse ETF and synthetic ETF, which is subject to certain controls on the foreign operator. These controls include the need for the ETF operator to maintain certain information such as indicative NAV, fees, information on key personnel and a summary of operator’s financial position on its website as well as to notify the SC of events that may affect the index which the ETF is tracking.
Ultimately, this initiative will empower investors with more diverse strategies to accumulate wealth that can be accessed conveniently and cost-effectively on the exchange. In addition, the introduction of a more diverse range of ETFs is likely to increase overall participation in the domestic ETF market thus boosting overall market vibrancy as well.
Championing Behavioural Interventions in the Private Pension Industry
In the face of rapid demographic changes coupled with the economic challenges in the post-pandemic world, the discussion on the future of Malaysians vis-a-vis their retirement savings has become an increasingly pressing subject. The private sector’s role in supplementing retirement incomes becomes even more pronounced when we consider PRS within the construct of Malaysia’s multi-tier pension framework.
While there has been commendable growth of 19.22% in the industry with total AUM reaching RM6.45
billion and 579,000 members at the end of 2023, the SC recognises that moving the needle on retirement security with respect to private sector solutions requires partnership and collaboration between retirement stakeholders on multiple fronts.
In this regard, the SC championed the adoption of behavioural interventions by PRS Providers and PPA in 2023. These are solutions that incorporate behavioural science to create effective solutions that encourage the desired behaviour. Some behavioural interventions explored by PRS Providers and PPA included targeted messages to members and direct debits through PPA’s Online Account system, which would facilitate easier, more convenient and automated contributions by members into the respective PRS account.
These efforts began from a workshop that the SC hosted in March 2023, where Providers were invited to engage in a discussion on how behavioural interventions could be utilised to increase participation and contributions into PRS. Providers worked with the SC to develop targeted behavioural messages and approaches to test them among their respective members. This pilot-test approach was undertaken to empirically determine the most effective behavioural messages which Providers could utilise in the longer-term to continue targeted interventions among their respective members.
The dialogue on retirement adequacy and behavioural solutions to address this continued on with the SC’s retirement forum in November 2023 entitled ‘Improving Long Term Retirement Planning and Savings Behaviour’. This was an important avenue to bring social protection and private pension experts to share solutions on improvements across the private pension system that should be implemented to better cater for the changing retirement needs of Malaysians.
Expanding Advisory Channels While Ensuring a Continued Role for Dealer Representatives
As Malaysian investors’ needs increase in sophistication, market intermediaries will be relied upon to provide multiple value-added services, from execution to advisory services, for better access and convenience. The SC recognised the potential ability of dealer representatives to offer such multiple value-added