KUALA LUMPUR: The Securities Commission Malaysia (SC) and Bank Negara Malaysia established Brokerage Industry Digitisation Group (BRIDGe) yesterday, a joint working group between the regulators and industry to accelerate digitisation of the stockbroking industry.
SC chairman Tan Sri Ranjit Ajit Singh during the launch SC Annual Report 2017 yesterday said BRIDGe aims to accelerate the digitisation of the brokerage industry to enhance operational efficiencies and service standards.
"The group will encompass the SC, the central bank and the industry participants including the brokers and banking institutions,” he said.
He noted that it is important for the regulators to collaborate with industry as there are always opportunities to further innovate the intermediation value chain and reduce cost in both the brokerage and banking sectors.
Going forward, further digitisation of the financial markets remains a key agenda for the SC.
Ranjit said in 2017, SC developed a framework to pave the way for the offering of digital investment services, providing investors a convenient and cost-effective channel to grow their wealth.
"In tandem, we liberalised our licensing regime to introduce Malaysia’s first digital-only equities broker,” said Ranjit.
In 2018, SC will continue to facilitate innovation and implemented market strategy to widen access to alternative market-based avenue, which is open application for peer-to-peer (P2P) lending; license digital investment managers; accelerate industry digitisation effort for greater efficiencies and enhance investors experience especially through post-trade settlement and the private retirement scheme (PRS) as well as BRIDGe.
Touching on cryptocurrencies and digital assets, Ranjit said SC will continue monitoring Initial Coin Offerings (ICO) schemes that are becoming more commonplace in Malaysia.
"The SC has and will continue reviewing relevant regulations and guidelines to facilitate functional and effective use of digital assets in the capital market.
"We are also collaborating closely with with our peer regulators both locally and globally in formulating our policy position and regulations in order to safeguard the interests of investors," he said.
Another important element of the digital strategy, according to Ranjit, is putting in place and maintaining the necessary levels of cyber security on all implementations.
"We continuously enhance our internal cyber security against threats which put our corporate assets and operations at risk. We also continuously assess our cyber risk and retool and enhance our security capabilities where necessary to keep pace with today’s cyber challenges," he said.
Alternative market-based financing avenues saw 651 successful deals, raising RM70 million for micro, small and medium enterprises (MSMEs).
P2P financing saw a 99 per cent success rate last year, raising a total RM37.2 million through 628 business deals, while equity crowdfunding saw an 86 per cent success rat, raising a total RM32.7 million since its launch.
“We are also pleased to note that 70 per cent of issuers in the alternative market-based financing are women, and 52 per cent of participating investors are in the younger demographic with 52 per cent of them being less than 35 years old,” Ranjit said.