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Here is the conundrum. We want to be the hub for almost every industry - from Oil and Gas (O&G) and Islamic Finance to Shared Services and Outsourcing (SSO) and Halal. Yet policies are announced and later retracted, regulatory regimes put forward and later retracted, overtly or surreptitiously.

More so in the capital market, I fear that the Securities Commission of Malaysia (SC), once the vanguard of investor protection, has exhibited backflips worthy of an Olympian.

In taking a position of investor protection, I wonder if the SC is really spooking investors with its indecisiveness and through lack of transparency.

Speaking to any amount of local as well as foreign investment bankers, analysts and fund managers, I get the sense that the flip-flop at the SC is seen as a serious malaise that is negatively impacting the government’s efforts to liberalise the economy, attract foreign investments, encourage transparency and promote regulatory certainty.

The SC’s movement towards disclosure-based compliance was well-received when announced and has seen many initial public offerings (IPOs) and mergers and acquisitions (M&A) activity taking place over the past three years. These achievements seem to be in serious jeopardy with the SC leadership, or lack thereof, in progressing an advanced, self-regulated capital market that is the hallmark of any developed and mature market.

The slide towards merit-based disclosure is a huge regression, and does not do anything towards building, restoring or even protecting investor confidence.

Coupled with the perceived inexperience of the SC middle officers in understanding, evaluating and constructively commenting on submissions in a variety of industries, what promoters and investors are facing is frustration, loss of time and money and more importantly, loss of confidence in Malaysia as an attractive capital market hub in Asia.

When the special-purpose acquisition company (SPAC) was announced, Malaysia took a leadership position in the Asia-Paciofic (APAC) region as one of the few capital markets with an investment class that has proven to be attractive in the US and other developed markets.

This has swiftly turned into a minefield for potential investors as the SC has announced major changes to the regulations arbitrarily and continue to exhibit a genuine lack of knowledge on how such deals are structured and transparency on approval processes. This follows its unexplained official decisions on a number of delays and rejection of other IPOs and transactions.

In the name of investors protection and sustainable, regulated capital market growth, I do believe the SC has to grow up and face the reality that its flip-flop has negatively impacted the attractiveness of the local capital markets and is a malaise they need to immediately take cognisance of.

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