Page 98 - CMP3

Diagram 21
MEASURES UNDERTAKEN BY GLOBAL SECURITIES REGULATORS FOR VULNERABLE INVESTORS, IN PARTICULAR SENIOR INVESTORS
Investor Outreach
Regulations
Supervision
Enforcement
Events and programmes designed to educate and raise awareness of vulnerable investors on how to protect themselves.
Public outreach activities, enabling the public to ask questions or submit complaints.
Guidelines or guidance on treatment of vulnerable investors e.g. sales practices, appropriateness of recommendations, training for workforce and marketing communications.
In some jurisdictions, legislative changes are made to combat maltreatment of senior and other vulnerable investors.
Thematic review on risks for specific vulnerable investors.
Risk-based supervisory framework to include vulnerable investor protection as a dimension e.g. identifying institutions to focus more on given their target customer segment, past records and complaints.
Vulnerable investor protection as an enforcement priority.
High-deterrence enforcement to deter poor behaviour and misconduct involving vulnerable consumers e.g. stiffer actions.
Source: Internal Analysis, SC, Based on publicly available information from Financial Conduct Authority, IOSCO, Monetary Authority of Singapore as well as US Securities and Exchange Commission.
4.2.2 REVIEWING THE REGULATORY ARCHITECTURE FOR THE CAPITAL MARKET
For a regulatory architecture to be effective, it must be fit-for-purpose. An effective regulatory regime is essential to enable the country to reap the benefits of regulation in driving the development of the capital market and improve confidence. The mandate of the regulator should also be set out succinctly with clear objectives, operational autonomy, effective powers and sufficient resources. Globally, different jurisdictions have adopted different architecture for oversight in various areas, among them, micro prudential supervision, macro prudential policies and supervision of conduct of business.
Firstly, a well-designed regulatory architecture can minimise the risk of regulatory arbitrage as consistent standards will apply regardless of an entity’s classification, be it a bank, insurance company, securities broker, asset manager or other organisation. Secondly, as businesses evolve, new business structures or features in their products and services may straddle both banking and securities regulation. Thus, an entity may be regulated as a financial institution but the new product or services could be regulated under securities laws.
96 SECURITIES COMMISSION MALAYSIA