Regulation

PARTICIPANTS MONITORING

We have vigilantly tracked the effects of global downturn and proactively monitored the implications to our Participants as well as addressed the potential ramifications to our market.

We ensured that Participants have adequate capital. In this area, their capital adequacy ratio was monitored more frequently by comparing their positions versus exposures and the potential corresponding impact from market volatility. Participants were reminded on the need to maintain capital requirement obligations and exercise prudent risk management policies at all times, particularly in volatile market periods. Engagements were made when concerns surfaced. An assessment was carried out on best practices and the adequacy of Participants' risk management measures. Our review revealed that they continue to observe appropriate standards of business conduct and have in place adequate risk management measures.

As at 31 December 2008, the industry average for Investment Banks' Risk Weighted Capital Ratio (RWCR) was above the minimum requirement of 8%. The industry average for Non-Investment Banks' Capital Adequacy Ratio (CAR) was 11.12 times against the minimum requirement which must exceed 1.2 times. Finally, the industry average Adjusted Net Capital for derivatives brokers was RM11.9 million, which is above the minimum requirement.

CORPORATE GOVERNANCE STANDARDS

Bursa Malaysia is committed to maintaining high standards of CG, which is inextricably linked to market integrity. Key initiatives carried out to raise CG standards during the year were premised on collaboration with professionals and industry organisations and through direct engagements with listed issuers and institutional investors.

We reviewed CG disclosures in annual reports as part of our monitoring function and communicated with listed companies on their disclosures or the lack thereof. We also carried on-site examinations of a select group of listed companies based on defined indicators.

We are in the midst of developing a CG practical guide to provide guidance to listed companies to enhance CG practices. Collaborative efforts with institutional investors to create awareness on how shareholders rights can influence company behavior, is on track. Amendments were also made to our Listing Requirements (LR) to incorporate the various CG rule changes.

Bursa Malaysia has required quarterly reporting since 1999. During the year, we achieved a higher rate of compliance on submission of quarterly and yearly financial statements. Results show that 98% of listed issuers complied with the reporting obligation stipulated in the LR.