KUALA LUMPUR: Regulatory integrity must remain central to the future of Malaysia’s capital market, said Securities Commission (SC) chairman Datuk Mohammad Faiz Azmi, as the regulator reviews the market’s direction over the next two decades.
Speaking at the 19th Malaysian Student Leaders’ Summit (MSLS XIX), Mohammad Faiz said a fair and orderly market depends on trust, ethical conduct, and a commitment to the rule of law.
“The phrase regulatory integrity reminds us at the SC that our prime directive, is to ensure a fair and orderly market, to ensure that investors are protected from fraud and criminal actions,” he said.
“To have a fair and orderly market, and for everyone to prosper there must be trust that the regulators treat everyone fairly and that we are also seen to help develop the market and not be so conservative as to hinder development and innovation,” he added.
He noted that Malaysia’s capital market had grown significantly over the years, from RM600 billion in the 1990s to RM4.1 trillion in 2024, now exceeding total banking assets of RM3.6 trillion.
Mohammad Faiz outlined the SC’s regulatory approach based on three layers: self-discipline, market discipline, and regulatory discipline.
He explained that while corporate decision-making is left to companies and shareholders, the SC acts on serious breaches of the law, including insider trading and market manipulation.
“We do expect people to call out bad behaviour, poor results and poor decisions,” he said.
“We do this by ensuring there is a working ecosystem monitoring what is going on, bodies like the Institutional Investors Council Malaysia (IIC), Institute of Corporate Directors Malaysia (ICDM), the Minority Shareholders Watch Group (MSWG) and also having a free press.
“This is important as being stupid is not a crime, but doing things in a ‘cin – cai’ way that destroys value and causes losses, still needs to be addressed. So, we rely on the market to call out bad or inefficient behaviour,” Mohammad Faiz said.
He cautioned against the assumption that all company failures stem from fraud, pointing to examples such as Hoover, Kodak, and BlackBerry.
“It disappeared because of bad decisions and a failure to adapt, not because of fraud,” he said of Hoover.
“Companies generally fail when their business gets disrupted or make bad business decisions.”
Mohammad Faiz also emphasised the importance of upholding the rule of law, referencing Clause 39 of the Magna Carta and Malaysia’s own legal foundations.
“No one should be above the rule of law,” he said, quoting Prime Minister Datuk Seri Anwar Ibrahim.
“Corruption is a cancer that must be eradicated… Our economic progress must be built on ethical foundations, not cronyism or rent seeking.”
On a personal note, Mohammad Faiz urged Malaysian students abroad to return home and contribute to the country’s growth.
“By all means, see the world and yes, work abroad if you can. But come home. Come home and help improve the country to be better governed, create a better growth path for the economy and help those who have been left behind,” he said.
“Personally, I have worked abroad, and to me, there is still no place like home.”
He ended his address by encouraging young Malaysians interested in finance and governance to consider joining the SC.
“To those of you who want to work in the corporate sector but at the same time, want to do something for our society and country, do come join me at the SC to make a difference.”
