Page 96 - CMP3

To become more efficient, regulators are undertaking a more proactive approach – one that focuses on preventive measures, rather than spending significant effort to address the repercussions of misconduct. As such, there is growing emphasis on governance to shape the culture and conduct of market participants.
STRATEGIC CONSIDERATIONS
4.2.1 ENHANCING FOCUS ON PROTECTING INVESTORS AGAINST VULNERABILITIES
As the capital market moves forward with new technologies and increases in complexity, regulators globally have started focusing on the impact of such changes to investors – especially when it can exacerbate vulnerability to fraud and harm. The underlying reason for the state of vulnerability can be multifaceted. For example, the financial circumstance of investors, along with several other factors such as experience, age, education, literacy and socio-economic background, may determine their level of vulnerability. Geographical location, changing personal circumstances such as bereavement and illness can also be determining factors in increasing investors’ susceptibility to fraud and malfeasance by unlicensed persons.
Diagram 20
CHANGING DEMOGRAPHY AND MARKET LANDSCAPE EXACERBATES INVESTOR VULNERABILITIES (ILLUSTRATIVE)
Age-induced cognitive decline or impairment
Mental health issues arising from greater social isolation
Source: SC.
Digital-enabled scams and fraud
Lack of knowledge to enable informed decision-making
94 SECURITIES COMMISSION MALAYSIA