Page 88 - CMP3

Unlike mandatory self-reporting where regulated entities are obligated to report under prescribed legislation and regulations, voluntary self-reporting will rely on the robustness of the processes which regulated entities have put in place to detect potential conduct risks. The co-operation and voluntary self-reporting framework undertaken by most securities regulators entails a credit or penalty reduction scheme that typically considers four key factors – self-policing before the discovery of misconduct, self-reporting of misconduct when it is discovered, measures undertaken to self-rectify breach and co-operation provided to the regulators. The voluntary self-reporting framework for the Malaysian capital market has been operationalised, with a Guidance Note on Co-operation and Self Reporting issued in June 2021.
Diagram 15
FACTORS TAKEN INTO ACCOUNT IN A VOLUNTARY SELF-REPORTING FRAMEWORK
Self-policing before the discovery of misconduct
Self-reporting of misconduct when it is discovered
Remediation undertaken
Co-operation provided
Established effective compliance procedures Provided a strong message regarding compliance
Conducted a thorough review of the nature, extent, origins and consequences of the misconduct
Disclosed misconduct promptly, completely and effectively to affected persons and regulatory agencies
Modified and improved internal controls and procedures to prevent recurrence of the misconduct
Provided all information relevant to the underlying breaches voluntarily
Source: SC.
4.1.3 ENCOURAGING GREATER INVESTOR ACTIVISM AND ADVOCACY
Investor activism and advocacy are powerful tools that can shape the accountability landscape in the capital market. Backed by greater access to information, investors today, and more so in the future, will be equipped with greater awareness and knowledge to hold businesses and capital market participants accountable towards the environment and the society.
In developed markets, environmental and social issues have become more prominent in shareholder meetings, especially as the world grappled with the systemic implications of the pandemic. Investor activism has in recent years catalysed global energy companies to align their business strategies to the goals of the Paris Agreement2,3, and global banks to do more to cut fossil fuel financing and combat climate change4.
Record year for environmental, social investor petition, Financial Times, June 2020. Shareholders push SEC for tougher climate regime for US oil, Financial Times, February 2021. Barclays offers vote on climate progress as activist heat rises, Reuters, May 2021.
2 3 4
86 SECURITIES COMMISSION MALAYSIA