KUALA LUMPUR (July 7): The Securities Commission Malaysia envisions more flexibility in the models for capital market intermediaries in appreciation of a growing diversity in investor population, said its chairman Datuk Syed Zaid Albar.

The SC, together with Bursa Malaysia, will continue to facilitate innovation among capital market intermediaries so that the Malaysian capital market can attract a larger pool of specialised market participants, he said.

"The SC will facilitate changes to the stockbroking licensing framework that will allow for entrants of new players with differentiated value propositions.

"And in tandem with this, Bursa Malaysia will also enable the separation of trading and clearing memberships,” said Syed Zaid in a teleconference panel session at Invest Malaysia 2020.

One point raised was the rising interest towards private equities, which is a segment that the SC sees as one of the investment access points that it will need to address.

“Individual deposits in the banking system have grown from RM379 billion in early 2010 to RM779 billion in May 2020 — about half of the market capitalisation in Bursa Malaysia.

Citing the need to intermediate the surplus savings and liquidity in Malaysia, Syed Zaid said the SC is open to discussing with market participants to provide fit-for-purpose solutions. 

“Much of our economic growth today is driven by smaller innovative businesses that are outside the public market. I believe investors recognise this, which is why increasingly they are looking to the private markets for returns,” he said.

“Our mid- to long-term strategy will focus on widening the range of investment products and access points including facilitating alternative investments in the private markets,” he added.

Syed Zaid cited several examples of new intermediary models to cater to more investors, such as digital-only brokers, algorithm-based trading platforms, or multi-asset brokers for sophisticated investors.

“The market can also benefit from clearing-only brokers that provide post-trade services,” said Syed Zaid.

“The key point is to appreciate that [the] Malaysian investor population has grown to be a lot more diverse,” he added.