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Across Asia, centralised infrastructures connecting various stakeholders across the fund management value chain have emerged that enables market participants to better serve investors. Some notable features across these market infrastructures include:
Centralised e-KYC service, which facilitates easier onboarding for investors and market participants;
Centralised repository of funds transacted, which gives investors a holistic view of their investments across different service providers;
Standardised and automated interaction across asset management companies, distributors, trustees and banks to remove inefficiencies in manual and bilateral communication;
Centralised back-office processing, which removes inefficiencies and allows market participants to focus on expanding their business and offerings. This will also drive competition by lowering setup cost for new players and fintech companies;
Integration with global clearing platforms for cross-border distribution of domestic funds, which allows market participants to diversify into investments globally while ensuring safe custody of fund shares and transparent management of funds – enhancing investors’ confidence in these markets; and
Seamless and interactive sharing of information between market participants and regulators, which enhances efficiency for regulatory reporting and enables more robust regulatory development.
In the future, data sharing ecosystem, which is similar in concept to open banking, will be increasingly relevant as the domestic industry matures. Open application programme interfaces (APIs) by industry players that enable third-party access to investor-permissioned data will present opportunities for further growth in the investment advisory and wealth management space. Greater data sharing will not only benefit investors with easier account aggregation across multiple service providers, but also catalyse new service models and product innovation as well as enhance the effectiveness of investment advisory services.
Implementation of these infrastructure features vary across markets, depending on the nature and needs of the fund management industry – some are enabled by the private sector, while others are jointly undertaken by the regulator and the private sector. Similarly, as the Malaysian fund management industry grows, such features could become increasingly relevant. In line with this, the SC will conduct a feasibility study on relevant infrastructures that can enhance the efficiency of the Malaysian fund management industry and enable greater growth of cross-border fund distribution. The results of this study will help the SC and the industry to identify appropriate next steps to elevate the efficiency of the fund management industry.
CAPITAL MARKET MASTERPLAN 3
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