MALAYSIA TO BE STAN­DARD-SETTER

First es­tab­lish­ment out­side Spain will serve as tem­plate for oth­ers, says its chair­man

New Straits Times - - Business - LIDIANA ROSLI KUALA LUMPUR lidiana@nst.com.my

MALAYSIA will set the stan­dards for other up­com­ing In­ter­na­tional Or­gan­i­sa­tion of Se­cu­ri­ties Com­mis­sions’ (IOSCO) re­gional hubs, fol­low­ing the es­tab­lish­ment of the Asia Pa­cific (APAC) hub at the Se­cu­ri­ties Com­mis­sion build­ing here.

“It is im­por­tant that we have a hub in the ma­jor re­gions that IOSCO cov­ers, be­cause one will be able to be­come more rel­e­vant in these re­gions, un­der­stand it bet­ter and con­fig­ure it with the rest of net­work while en­sur­ing the needs of the re­gion is ad­dressed,” said IOSCO chair­man Ash­ley Adler in a brief­ing with se­lected me­dia yes­ter­day.

Alder said Malaysia was an ideal lo­ca­tion for the hub be­cause of mul­ti­ple rea­sons, in­clud­ing its high­ly­de­vel­oped cap­i­tal mar­kets, sta­tus as an emerg­ing mar­ket (EM), com­mit­ted reg­u­la­tors with an in­ter­na­tional view and strate­gic ge­o­graph­i­cal lo­ca­tion within Asia.

“If you have reg­u­la­tions that are im­ple­mented usu­ally in an EM, it is ex­tremely hard to con­nect those reg­u­la­tions to those from the de­vel­oped mar­kets be­cause there is a dis­par­ity of stan­dards,” he said.

“How­ever, if you are able to nar­row the gap, you will en­ter a world where cap­i­tal will flow more freely across bor­ders, and that is im­por­tant, as the vast amount of Asian sav­ings is be­ing used to in­vest in as­sets in the West in­stead of Asia, even though there is a need for Asian sav­ings to be de­ployed in Asia for re­gional growth.

“Asian sav­ings can then be de­ployed more pro­duc­tively once you start co­op­er­at­ing around the re­gion. This will en­sure smoother flows and ad­dresses the in­fra­struc­ture gap, which is the most im­por­tant is­sue as far as we are con­cerned.”

The IOSCO APAC hub here, he said, would be able to help iron out this is­sue, but only over the medium to long term, as in­fra­struc­ture typ­i­cally takes a long time to ma­ture.

He said a hub within the re­gion was even more sig­nif­i­cant be­cause of broadly un­de­vel­oped cap­i­tal mar­kets.

“Malaysia has a highly-de­vel­oped cap­i­tal mar­ket, so add in a com­mit­ted reg­u­la­tor with an in­ter­na­tional view and ge­o­graph­i­cal po­si­tion that is ideally placed for peo­ple to come into the hub in or­der to work with the hub with ca­pac­ity build­ing across Asia, would en­able Asian cap­i­tal mar­kets to al­lo­cate its vast sav­ings to Asian in­fra­struc­ture and av­enues, which will then be­come more com­pelling,” he said.

“It could be based in one of a num­ber of places across Asia, but it is ap­par­ent that there is en­thu­si­asm and com­mit­ment in Malaysia, which is great.”

He said in­fra­struc­ture spend­ing was ex­tremely long-term, and this was one of the rea­sons why in­vestors found it so dif­fi­cult to fund, as there was too much un­cer­tainty.

“How­ever, most in­sti­tu­tional in­vestors, par­tic­u­larly pen­sion funds, have to think long-term, as they have long-term re­li­a­bil­i­ties. This is where the IOSCO APAC hub can help.”

Go­ing for­ward, Alder said it was only log­i­cal to set up more hubs in dif­fer­ent parts of the world, like the Mid­dle East and Africa, as well as the Amer­i­cas.

“But Malaysia will def­i­nitely set the stan­dards for these other hubs to come as it is our first hub out­side of our head­quar­ters in Spain.”

Es­tab­lished in 1983, IOSCO de­vel­ops and pro­motes the im­ple­men­ta­tion of global stan­dards for cap­i­tal mar­ket reg­u­la­tions.

Its mem­bers from 115 ju­ris­dic­tions col­lec­tively reg­u­late more than 95 per cent of mar­kets world­wide, which to­tals some US$140 tril­lion (RM622.9 tril­lion).

PIC BY AIZUDDIN SAAD

In­ter­na­tional Or­gan­i­sa­tion of Se­cu­ri­ties Com­mis­sions’ Asia Pa­cific hub, lo­cated in the Se­cu­ri­ties Com­mis­sion build­ing in Kuala Lumpur, was of­fi­ci­ated by Prime Min­is­ter Datuk Seri Na­jib Razak in con­junc­tion with the Global Emerg­ing Mar­kets Reg­u­la­tory Con­fer­ence yes­ter­day.

Ash­ley Adler

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