Page 107 - CMP3

The SC has already begun engagements with market participants and technical experts to identify areas where RegTech has the greatest impact and understand the barriers or challenges of RegTech adoption. This will be a continuous process, where inputs from these engagements will be used to identify RegTech priorities and inform the development of RegTech in Malaysia. Collaborative efforts with the broader industry are key to expanding RegTech knowledge among market participants. This includes joint efforts to facilitate greater information sharing within the capital market about potential RegTech solutions, innovations and best practices. Greater knowledge will be fundamental to spur RegTech growth, innovation and adoption.
To facilitate greater RegTech innovation, collaborative platforms will be put in place to facilitate industry- wide discussions to synthesise innovative ideas on RegTech. Events such as hackathons or TechSprints will also be considered to catalyse RegTech development in areas that could potentially unlock significant value for the capital market. Where relevant, regulatory guidance can be provided to help RegTech solution providers navigate through regulatory requirements in the Malaysian capital market.
Box Article 2
OBJECTIVES OF REGTECH
RegTech solutions in various jurisdictions are broadly used to enable the three key objectives, outlined below:
Enhance compliance with regulatory requirements
Enhance risk management
Automate and streamline regulatory reporting
RegTech solutions are often used to automate workflows to improve regulatory compliance, especially in areas that are resource-intensive and procedural in nature.
For example, RegTech solutions are deployed to automate the real-time monitoring of investors’ margin and collateral exposure as well as identify suspicious transactions based on defined triggers. For investor onboarding, RegTech solutions such as biometric authentication and digital workflow solutions are often used to augment investor due diligence and KYC processes. In some cases, analytics are adopted to enhance investors’ suitability and risk profile assessments.
RegTech solutions are often used to comb through large volumes of data to generate insights and monitor risks, such as compliance or conduct risk.
For example, analytics that evaluate the impact of market movements and liquidity needs can help intermediaries make more informed decisions when managing portfolio risks. In the case of managing conduct risks, intermediaries have also started to deploy voice analytics to identify potential misconduct by analysing conversations between employees and customers.
RegTech solutions are often used by intermediaries to integrate reporting requirements into existing business processes, streamline data collection and automate the reporting process.
This serves to enhance the accuracy and timeliness of reporting, reduce duplication of efforts in reporting and enable intermediaries to redirect the cost of manual activities to higher-value areas that require human judgement. In some jurisdictions, machine executable regulations – regulations coded in such a way that machines can interpret the regulatory requirements and act upon it without human intervention – are also being explored to fully automate the reporting process from interpreting and adapting to changes in regulatory requirements to preparing and submitting the required data to regulators.
CAPITAL MARKET MASTERPLAN 3
105