Securities Commission 20th Anniversary Dinner

1. A journey of twenty years may seem short to some, but twenty years in biblical terms is half a generation, while in modern terms twenty years make a generation. But the mere length of a journey may not in itself be a cause for celebration; it is the quality of the journey that matters. It is the lessons learnt, the knowledge shared, the recognition gained, the lives touched, and in the context of the institution that we are celebrating tonight, the tremendous wealth created for society that make the difference.

2. It is a pleasure for me to be here this evening to mark the 20th Anniversary of the establishment of the Securities Commission Malaysia. The 20-year journey of the SC has been nothing short of remarkable. From being a precocious “new kid on the block” within the Malaysian and regional financial landscape, punching above its weight and trying to gain acceptance and recognition from society and from its peers and regulatees, the SC today is a pivotal and highly regarded institutional pillar within the Malaysian financial landscape, overseeing a capital market that is now worth RM2.6 trillion, a capital market that has not only registered tremendous growth over the past two decades, but one that is also more diversified and more resilient.

3. The role of the Malaysian capital market in capital formation and wealth creation has been immense. The market raised an average of RM65 billion annually from 2000 to 2010, as compared with RM39 billion between 1993 to 2000. This is a clear reflection that the Malaysian capital market has over the years earned the trust and confidence of investors, issuers and intermediaries alike.

4. Last year as part of the IMF and World Bank’s Financial Sector Assessment Programme, the SC achieved a remarkable 92 percent compliance with the IOSCO Principles. This very high score places Malaysia as one of the leading capital markets in the world in terms of regulatory quality.

5. The light that shines from this beacon of regulatory excellence in Bukit Kiara reaches far beyond the shores of Malaysia. The SC plays a significant role in influencing and shaping international regulatory policies and practices in Asia, particularly among the ASEAN countries; in the OECD, through its work on corporate governance; and of course globally, through IOSCO. The recognition by the international regulatory community of SC’s leadership role is reflected, among others, in the fact that the SC’s flagship, Emerging Markets Programme, a bespoke training programme for emerging market regulators is now in its 14th year and has trained over 550 regulators from 65 countries across the globe. This year’s World Capital Markets Symposium, the third in the series, has again attracted very prominent thought leaders and experienced regulators from across the globe, some of whom are with us tonight. I understand participants representing international regulators, fund managers, academia, corporate leaders, opinion makers and the financial services industry are currently in Malaysia for these two days.

6. For SC’s continued and active participation in the international regulatory arena, the SC Chairman Datuk Ranjit Ajit Singh now chairs the Growth and Emerging Markets Committee of IOSCO – the largest committee within IOSCO with 86 members. Datuk Ranjit is also the Vice Chair of the IOSCO Board, the governing body of this international organization of securities commissions.

7. In my view, ensuring fair and orderly markets, protecting investors and addressing systemic risks whilst ensuring that the capital market serves as an efficient engine for economic growth, make securities regulators institutions that serve the public good, or what I would call public good institutions.

8. Building an institution that is strong, successful and enduring is no mean feat. Building an institution that serves the public good is even more challenging. Paying lip service to the concept of the public good comes at no cost, and most people will be happy to do so or at least be seen to be doing so. However, this commitment can change when individual interests are affected. When the pursuit of public good is perceived to threaten, undermine or in any way adversely affect private interests, there will be attempts to enlarge, restrict or even distort the notion of public good. It is of course the responsibility of the institution to ensure that the pursuit of public good does not compromise basic individual rights, hinder legitimate private interests or impede genuine commercial transactions. Achieving the right balance I am sure is easier said than done. In fact the delicate balancing act that these institutions sometimes have to perform, I am told, make them the envy of many trapeze artists.

9. So how do we build strong and enduring institutions that serve the public good? With so many heads of institutions in this room, including all the previous Chairmen of the SC, many people here are better placed than I to answer this question. But allow me to share some thoughts with you.

10. At the most fundamental level, it is the people and the leaders of an institution that matter most, for without them no institution can be birthed, let alone flourish and withstand the test of time. It is the quality of leadership and the quality of its people that set an institution apart from its peers, for better or for worse. Leaders of public good institutions must not only be visionary, inspirational and passionate, they must also be courageous and tenacious. A keen sense of public duty, a strong commitment to a higher calling, a potent mix of passion and perseverance, professionalism and pragmatism and a tamper-proof moral compass are pre-requisites for both leaders and employees of public good institutions. They will do well if they are constantly guided by the words of Dante that the hottest places in hell are reserved for those who in times of great moral crisis maintain their neutrality. Hence a thick skin must be your first layer of clothing.

11. A second fundamental requirement is integrity. Components of integrity are many, and they include being honest in relationships with others, the ability to admit weaknesses and strengths, and the willingness to admit when a mistake has been made. The presence or absence of integrity is probably the most important quality that has surfaced time and time again, especially in today’s world where wealth and success are often pursued at any cost.

12. In today’s global financial market where securities are traded within fractions of a second, a year is a long time, so twenty years is probably ancient history! As Charles Darwin has reminded us, it is not the strongest nor the most intelligent of the species that survive. It is the ones that are most adaptable to change. This applies as much to living things as it does to institutions. Given the lightning speed of change that blows across the world today, adaptability and agility will enable institutions to effectively respond to changing circumstances. Public good institutions cannot sit and wait for the storm to pass, they must learn to run or to dance in the rain or to swim in the flood as the situation requires.

13. The ability to adapt and respond to change however does not come naturally. Which brings me to two other essential attributes – a culture of learning and a culture of embracing diversity. A constant thirst for knowledge and embracing and accepting diversity, not only of people but also of their views and beliefs, will ensure that institutions remain agile and are able to respond speedily to the changing environment. An environment of pure uniformity, where people speak, talk and think alike, is barren intellectual ground.

14. In this regard I know for a fact that the search and sharing of knowledge and the openness to debates and dialogues is something that is second nature to the SC.

15. The diversity of SC’s employees not only in terms of age and gender but also in terms of religion and ethnicity, as well as social, professional and academic background makes it stand out as a model public institution. It makes the SC the place to go for individuals wanting to serve the public interest and wanting to make a difference.

16. I have no doubt that this excellent organisation, with its line-up of outstanding leaders and passionate, diverse, professional and hardworking men and women past and present, will continue to grow from strength to strength. The happy problem for Datuk Ranjit is how to make such a great institution even greater?

17. I wish the Securities Commission a memorable 20th anniversary and all the success in continuing to strengthen itself as an enduring institution.

Thank you.

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