Barriers and Opportunities for Enhancing Capital Flows
In the COMCEC Member Countries
35
--Compulsory adoption of December 31st as the common year-end for bank reporting,
enabling more accurate comparison of the performance of different lenders;
--Mandatory retirement of bank CEOs after ten years and the compulsory change in external
auditors after ten years;
--Adoption of International Financial Reporting Standards (IFRS) by all publicly listed and
significant public interest entities, including banks, from 2012;
--Reforms to improve the efficiency and depth of the capital market as well as boost investor
confidence, including extending trading days, permitting short selling and introducing
market making;
--Updated stock exchange technology, including the NASDAQ OMX trading platform.
The raft of new regulations and initiatives introduced by Nigeria’s financial regulators in the
past three years has set off what appears to be a reform momentum that can lift investor
confidence in the country’s capital markets and economy.
2.3. UPPER-MIDDLE INCOME COUNTRIES
Malaysia
Institutions and laws overseeing capital markets
The Securities Commission (SC), which falls under the purview of the Ministry of Finance, is
the main regulator of capital markets in Malaysia. It licenses capital markets and supervises
exchanges, clearing houses and central depositories. It is the registering authority for
prospectuses of corporations; the approving authority for corporate bond issues; the regulator
for matters relating to securities and derivatives contracts, mergers and acquisitions and unit
trust schemes; and the licensing and supervising authority. The SC was established on March
1st, 1993 under Securities Commission Act 1993 and has investigative and enforcement
powers. Apart from its regulatory activities, the SC has the task of promoting the development
of the securities and derivatives markets in the country.
Before 1993, overseeing the securities industry was distributed between the Registrar of
Companies, the Capital Issues Committee, the Panel on Take-overs and Mergers, the Foreign
Investment Committee, Bank Negara Malaysia (BNM, the central bank), the Ministry of Trade
and Industry and the Kuala Lumpur Stock Exchange (KLSE). The Sixth Malaysia Plan (1991-95)
highlighted the need for a single regulatory body with a broad overview of capital markets and
the SC was formed in 1993 to promote the development of capital markets, streamlining the
regulations governing the securities markets, and speeding up the process of processing and
approving corporate transactions.