Malaysia is opening the doors to digital and multi-asset brokers in the stockbroking industry to cater to a more diverse and technology savvy investor population.
According to Finance Minister Zafrul Aziz, the move will drive “greater diversity in intermediary models in the securities market".
"We believe that this will also spur greater innovation in the stockbroking industry, create greater diversity in market participants and most importantly enhance value for investors," Mr. Zafrul told participants of a virtual investment conference on July 7.
Securities Commission Malaysia (SC) will amend its stockbroking licensing framework to allow the entry of these different players, according to Syed Zaid Albar, chairman of the securities regulator.
"These players include digital-only brokers who can cater to investors looking for no-frills services, or algorithmic trading platforms or multi-asset brokers for more sophisticated investors," he said at a so-called fireside chat at the conference.
The changes to the licensing framework will also enable more “flexible models with efficient capital structures” aimed at attracting a bigger pool of specialised market participants, he added.
Mr. Syed Zaid said the investor population in Malaysia is a lot more diverse now and technological advances have changed the way they interact in the capital market.
"It is important that our industry also evolves to meet the diverse needs of investors…To enable this to happen, the market structure will need to evolve," he said.