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enhance their ability in detecting anomalies. In addition, the greater use of digital tools will also enhance regulators’ efficiency. In this respect, the SC will continue to increase adoption of technology to enhance analytical and traceability capabilities, build an in-house digital forensics lab to manage digital evidence and develop digital asset investigation capabilities.
B. ENABLING EFFICIENCY THROUGH GREATER SELF-REMEDIATION, TRANSPARENCY AND MEASUREMENTS
The pursuit of self-remediation and co-operation by individuals and entities involved in the SC’s investigation and related enforcement actions can also contribute to greater efficiency and expediency of the enforcement process. The SC’s introduction of self-reporting mechanisms, outlined in section 4.1.2, is intended to not only enable self-reporting, but also self-rectification in exchange for leniency or credit.
Communications with the general public and the industry will be pertinent as the SC progresses towards a swift, effective and targeted enforcement approach. Greater transparency of the enforcement approach and strategy will enable the public to better understand the SC’s enforcement priorities as well as the objectives and rationale behind the SC’s enforcement actions. This will promote confidence in the enforcement process. In this respect, the SC will pursue more dedicated reporting of its annual enforcement priorities and outcomes as the next step towards greater transparency. Along with this, the SC will also refine key enforcement efficiency measures to enable continuous improvement in achieving swift, effective and targeted enforcement actions.
4.3 EMBRACING THE DIGITAL AGE
The current digital revolution is being driven by a wave of changing consumer behaviour, heightened competition and demand for greater efficiency in an environment of tightening profit margins. While the digital revolution has enabled new experiences and opportunities for market participants, increasing technology adoption also brings with it emerging risks, including among others, cyber risk, risk of data breach, and AI-bias. Against this backdrop, regulators have begun to refine regulations around technology- enabled activities while transforming their own internal technology capabilities to achieve better regulatory efficiency and effectiveness. This section outlines the key regulatory considerations that the SC will take into account as both market participants and the SC continue to embrace the digital age.
THE STATE OF PLAY
The Malaysian capital market has seen significant growth in digital adoption over the last decade. Online trading has become sizeable, growing to 46.7% of the total equity and derivatives trading volume as at 2020, compared to only 21.9% in 2012. This was driven in part by greater industry digitision efforts and the entrance of digital-only brokers which have more than doubled the number of accounts opened in 2020 alone. Other aspects of the capital market have also seen greater digitisation. The proliferation of DIMs has catalysed growth in the asset management industry, resulting in ~200,000 new accounts opened since its inception in 2018. The growth of alternative investment has been largely driven by greater access to digital platforms, with ~450,000 accounts being registered at the three DAXs since 2019. Meanwhile, ECF and P2P financing platforms have collectively been used by ~31,000 investors since 201712.
Internal analysis, SC, 2020.
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