The Securities Commission Malaysia (“SC”) and Bursa Malaysia Berhad (“Bursa Malaysia”)  announced Tuesday that Bursa Malaysia will establish a wholly-owned subsidiary (“Bursa RegSub”) to assume the regulatory functions currently undertaken by Bursa Malaysia.

SC’s chairman, Datuk Syed Zaid Albar shared in a media statement that SC and Bursa Malaysia have been working closely to further enhance the governance structure of the exchange by segregating its regulatory functions from its commercial objectives. In doing so they aim to address the perception of potential conflicts between these two roles.

“ The Bursa RegSub will be governed by a board of directors, a majority of whom will be independent of Bursa Malaysia, and the Chairman of Bursa RegSub will be appointed from amongst the independent board members.

In this regard, Bursa Malaysia remains accountable to the SC to ensure that Bursa RegSub is allocated sufficient financial and human resources to enable it to discharge its regulatory functions effectively. The SC will continue to regulate Bursa Malaysia directly as a listed company as well as a market operator while maintaining oversight of the regulatory functions performed by Bursa RegSub,”

said Datuk Syed Zaid Albar, Chairman of the SC.

“Malaysia’s capital market is globally recognised as forward-looking, well-regulated and ranks highly in investor protection. The Exchange will continue to work with all stakeholders in our effort towards building a vibrant and competitive marketplace,”

said Datuk Shireen Ann Zaharah Muhiudeen, Chairman of Bursa Malaysia.

The establishment of Bursa RegSub will put Malaysia’s stock market regulatory framework in line with jurisdictions such as Singapore, Japan and Brazil.

The SC and Bursa Malaysia will review and finalise the implementation details to ensure a seamless transition of the exchange’s regulatory function to the subsidiary, which is expected to be operational by the end of 2020.