Last updated on August 23, 2025
Regulatory integrity remains the cornerstone of the Securities Commission’s (SC) mission to ensure a fair, orderly and transparent market, while protecting investors from fraud and criminal activities, said SC chairman Datuk Mohammad Faiz Azmi. STU/RAIHANA MANSOR
Regulatory integrity remains the cornerstone of the Securities Commission’s (SC) mission to ensure a fair, orderly and transparent market, while protecting investors from fraud and criminal activities, said SC chairman Datuk Mohammad Faiz Azmi. STU/RAIHANA MANSOR
KUALA LUMPUR: Regulatory integrity remains the cornerstone of the Securities Commission’s (SC) mission to ensure a fair, orderly and transparent market, while protecting investors from fraud and criminal activities, said SC chairman Datuk Mohammad Faiz Azmi.
In his keynote address at the Malaysian Student Leaders’ Summit XIX (MSLS XIX), Mohammad Faiz said the SC upholds the responsibility through three main approaches, beginning with self-discipline within the industry.
He pointed out that companies are ultimately run by individuals, and it is individuals who have the potential to commit crimes or engage in dishonest behaviour.
Therefore, he said it is essential for those operating within the capital markets to uphold values and morals that align with acceptable standards.
To promote such behaviour, he said the SC issues clear guidelines, reinforces ethical conduct through the Malaysian Code of Corporate Governance, and takes legal action against serious misconduct, including insider trading and market manipulation.
“The second way is relying on Market Discipline. We do expect people to call out bad behaviour, poor results and poor decisions.
“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 “cincai” way that destroys value and causes losses, still needs to be addressed,” he added.
Mohammad Faiz said the third and final layer is regulatory discipline, which reflects the SC’s core enforcement authority.
He highlighted that the SC is the primary regulator of Malaysia’s capital markets, which as of 2024 are valued at RM4.1 trillion in shares and bonds, compared to RM3.6 trillion in banking assets.
This, he said, shows how vital the capital market is to the national economy.
He added that while bodies like Bursa Malaysia and the Federation of Investment Managers Malaysia (FIMM) handle less serious infractions, the SC focuses on major breaches and holds the legal power to prosecute, impose fines and pursue jail terms when necessary.
Addressing a common misconception, Faiz said there is often an assumption that company failures or losses must be due to wrongdoing, when in fact not all such outcomes are caused by fault or misconduct.
“Businesses can collapse due to market disruptions or poor strategic decisions. These are not crimes, but part of the risk landscape in any competitive economy,” he said.
Faiz also clarified that the SC does not intervene in non-criminal matters or guarantee business outcomes, as companies and their shareholders are free to manage their own affairs provided they operate within legal boundaries.
He said this principle is especially important when dealing with foreign investors, who expect fair and consistent treatment and take confidence in Malaysia’s adherence to the rule of law, knowing that disputes will be handled fairly and enforcement powers will not be misused.
He added that another key aspect of regulatory integrity is building trust, as market growth and prosperity depend on confidence that regulators act fairly, protect investors, and support market development without being overly conservative or hindering innovation.
“Not everything we encouraged over the last 30 years has worked and some areas like digital assets and carbon credits still have some way to go before they become mainstream.
“But this second mandate of market development is to reassure the market that we too have an interest to grow the market,” he said.
He concluded by saying that to create value, support growth and navigate future challenges, Malaysia needs a regulator that upholds integrity while being facilitative and forward-looking.
ChatGPT said:
Rephrased Version:
SC Chairman: Integrity in Regulation Essential to Safeguard Investors
KUALA LUMPUR: Regulatory integrity is fundamental to the Securities Commission Malaysia’s (SC) mission of maintaining a fair, orderly, and transparent capital market while protecting investors from fraud and misconduct, said its chairman Datuk Mohammad Faiz Azmi.
Delivering his keynote at the Malaysian Student Leaders’ Summit XIX (MSLS XIX), Faiz outlined three key pillars underpinning the SC’s approach to upholding this responsibility—beginning with the role of self-discipline within the industry.
“Companies are managed by individuals, and it is individuals who can either uphold or violate ethical standards,” he said, stressing the need for personal integrity and moral values among capital market participants.
To support ethical conduct, the SC enforces clear guidelines, promotes good governance through the Malaysian Code of Corporate Governance, and takes firm legal action against serious breaches, including insider trading and market manipulation.
The second pillar, he said, is market discipline, which relies on stakeholders and oversight bodies to call out irresponsible behavior and poor decision-making.
“A functioning ecosystem—comprising entities like the Institutional Investors Council Malaysia (IIC), Institute of Corporate Directors Malaysia (ICDM), Minority Shareholders Watch Group (MSWG), and an independent press—is vital,” he said.
“Being foolish isn’t a crime, but careless actions that destroy value and cause losses must be addressed.”
The third pillar is regulatory discipline, which reflects the SC’s core enforcement authority.
As the principal regulator of Malaysia’s capital markets—now valued at RM4.1 trillion in shares and bonds compared to RM3.6 trillion in banking assets—the SC plays a central role in preserving economic stability, he said.
While Bursa Malaysia and the Federation of Investment Managers Malaysia (FIMM) handle minor infractions, the SC focuses on serious violations, with powers to prosecute, impose fines, and pursue custodial sentences.
Addressing public perceptions, Faiz clarified that not all corporate failures are a result of wrongdoing.
“Businesses may fail due to market shifts or poor strategies. These aren’t crimes but risks inherent in competitive markets,” he explained.
He emphasized that the SC does not interfere in business decisions or guarantee outcomes, but rather ensures that all players operate within legal boundaries.
This legal clarity, he noted, is especially important for foreign investors seeking consistency and confidence in the rule of law.
Building trust, Faiz added, is another crucial component of regulatory integrity. Sustainable market growth depends on investor confidence in fair enforcement and a regulatory approach that supports innovation without stifling progress.
“Not every initiative over the past three decades has succeeded. Areas like digital assets and carbon credits still face hurdles before they become mainstream,” he acknowledged.
“But part of our role is to signal our shared interest in growing the market.”
He concluded by emphasizing the need for a regulator that not only enforces rules with integrity but also facilitates market development with a forward-looking mindset—key to delivering value and navigating future challenges.
