The Securities Commission (SC) has adopted the International Organization of Securities Commissions (IOSCO) Methodology for assessing domestic securities market regulations. IOSCO is the main standard setter for the regulation of capital markets.

The Malaysian Accounting Standards Board (MASB) has placed exposure drafts of proposed accounting standards on its website to elicit public comment prior to final deliberation and issuance.

MASB introduced a new set of Islamic accounting standards in 2005. Specifically, it plans to introduce standards on ijarah (leasing), zakat (tax), murabahah (deferred sales), and takaful (insurance). These are in addition to the previous set of Islamic accounting standards MASB introduced in 2001.

At the 45th Banking and Financial Law School Seminar, the Bank Negara Malaysia (BNM) Governor endorsed universal application of the International Swaps and Derivatives Association Master Agreement for over-the-counter (OTC) financial derivatives contracts. This recognizes the global nature of financial market transactions and the need for a global perspective in managing risk, where legal documentation of derivatives plays a role in mitigating risk for banks and businesses.

The Capital Market Master Plan (CMP), published in 2001, is a comprehensive roadmap for Malaysian capital markets over the next 10 years. Representatives of the Securities Commission (SC) and local and foreign capital market professionals helped formulate the CMP.

CMP initiatives include the following:

Market Institutions

• Linking the money settlement system with the capital market trading and clearing systems

Bond Market

• Encouraging international financial institutions and multinational corporations to issue ringgit bonds
• Allowing domestic bonds to be rated by international bond rating agencies
• Establishing a centralized platform for clearing and settlement of listed and unlisted bonds

Islamic Capital Market

• Promoting a wider range of Islamic collective investment schemes
• Increasing the pool of Islamic capital market expertise through more training and education
• Enhancing awareness of Malaysia’s Islamic capital market at the domestic and international levels

Investment Management

• Introducing a uniform regulatory framework streamlining the licensing rules for the investment management industry

Technology and E-Commerce

• Facilitating end-to-end, straight-through processing in Malaysian capital markets, with linkages to international systems

These developments are presented in detail in Chapter 5 of the CMP. The full CMP document and a status report on its implementation can be found by following the link below.

On May 2009, the Malaysian government announced the establishment of the national financial guarantee institution, Danajamin Nasional Berhad (Danajamin). Danajamin will provide financial guarantee insurance for issues of private debt and Islamic securities. The insurance will be available for securities issued by investment grade companies, which are defined as rated BBB or higher by a Malaysian rating agency. Danajamin will have the capacity to insure up to MYR15 billion of investment grade private debt and Islamic securities.

On June, Prime Minister Datuk Seri Najib Razak announced measures that would further liberalize foreign investment and open up Malaysia's domestic capital markets. The measures are part of the country's shift to a new economic model, following liberalization in services sub-sectors and measures to enhance the financial sector. Some of the important measures announced include:

• ownership in the wholesale segment of the fund management industry will now allow 100% ownership for qualified and leading fund management companies;
• foreign shareholding limits for the unit trust management companies/stock broking companies will be raised to 70% from 49%;
• the Foreign Investment Committee guidelines on the acquisition of interests, mergers, and takeovers were repealed; no equity conditions will be imposed on sectors not deemed strategic; and,
• the 30% bumiputra requirement for an initial public offering will no longer exist.

A new investment institution, Ekuiti Nasional Berhad (Ekuinas) will also be established. Ekuinas will serve as a private equity fund with an initial capital of MYR500 million, which will be subsequently enlarged to MYR10 billion, focusing on investments in sectors with high growth potential and joint investments with private sector funds.