Securities Commission (SC) market supervision managing director and executive director Datuk Ranjit Ajit Singh said that having a voluntary private pension fund system was a very important aspect of the agenda.
One of the things we've been working with the Government very closely is the development of the private pension fund framework. From the perspective of helping to build a number of institutions that will have pools of capital available to invest in the marketplace, it is a very important aspect, he told StarBiz.
If you look at any of the major countries that have successfully developed their capital markets after a certain point in time to reflect domestic demand side, it has been on the back of significant reforms in the pension systems that had occurred.
Ranjit, who was one of the participants at a recent roundtable discussion organised by StarBiz, stressed that the proposed pension system would be strictly voluntary and not touch on the mandatory system under the Employees Provident Fund.
He also said efforts would be made to encourage more retail participation into the local stock market.
For this to occur, there is a view that you need to be able to look towards not only types of products, but also the types of services that the broker dealers and other intermediaries can offer, for example a much higher Internet-based approach, if the broker wants to do that, should be facilitated.
So (there are) a lot of opportunities for more business models to be developed to bring in more participation, said Ranjit.
He also said the SC would like to see more risk taking occurring within the capital market.
We need to move away from an environment of risk avoidance to risk management and create more opportunities for a certain amount of products and investment styles that allow a little bit more of risk taking to occur within the capital markets.
That's why we have taken a view that we will continue in the path towards the liberalisation of the derivatives market, whether it's in the area of short-selling or in the area of allowing a greater degree of products available for the derivatives market to develop.
Ranjit said the capital market not only provided foreign investment opportunities but also to facilitate capital formation for Malaysian companies.
For that to exist, the capital markets must be able to offer an opportunity not just for the large companies in Malaysia but also those throughout the spectrum and therefore building up the venture capital equity sort of environment I think requires a lot more effort.
This will be a very important focus area moving forward, he said.
From the standpoint of skills, Ranjit said human capital and information infrastructure development is also very important.
You cannot aspire to become a developed market if you do not have the skills and talents available. Therefore, that is a very important aspect of what we will do as well.
And I think while we do all this, we need to ensure that governance gets the requisite attention and therefore, (looking at governance) looking at the ability of the markets to withstand shocks, is very important, he said.
Ranjit said that despite the severe shocks that the global financial system went through, Malaysia remained resilient.
As we go further, we don't want to lose sight of the fact that we also want a certain degree of resiliency to be present in the market.
A certain level of Government arrangements that are balanced, in terms of assuring that there isn't undue regulatory burden but at the same time investor protection and corporate governance requirements are in place to be able to ensure that investors and issuers will gravitate to markets which
have quality regulation, he said.
The SC introduced the first CMP in 2001. It was designed to be a comprehensive plan mapping the direction of the Malaysian capital market for 10 years (2001 to 2010).
The first CMP was intended to ensure that the capital market was well positioned to support national economic growth and to meet future challenges from regional competition and globalisation.
It detailed the vision, objectives and strategic initiatives for the Malaysian capital market to successfully meet future challenges.
No comments:
Post a Comment