Capital market regulators should enhance their investor education efforts to increase financial literacy and informed participation in the capital market, said Datuk Syed Zaid Albar, chairman of the Securities Commission Malaysia (SC), at the IOSCO Growth and Emerging Markets (GEM) Conference 2019 in St Petersburg, Russia recently.
Datuk Syed Zaid spoke at the conference as the Vice-Chair of the GEM Committee, the largest grouping within the International Organisation of Securities Commissions (IOSCO), representing close to 80 percent of IOSCO membership, including 11 of the G20 members.
Despite rapid economic growth, significant gaps remain between emerging markets and advanced economies. Nominal GDP per capita in advanced economies is almost nine times higher than that of developing economies.
For emerging markets to catch up with income levels in advanced economies, households must participate in wealth creation channels such as the capital market. “Effective investor education provides awareness to the public on available investment opportunities and equips investors with the right knowledge and tools to participate in a confident and informed manner. In other words, investor education in emerging markets is not only a form of investor protection, but also a tool to attract market participants,” said Syed.
Datuk Syed also shared Malaysia’s National Strategy for Financial Literacy, a holistic five-year roadmap aimed at raising financial literacy levels and the overall financial well-being of Malaysians. The National Strategy also recognises that digitisation is reshaping the economy, market and regulatory strategy, making financial literacy even more pertinent.
“The SC has embraced digitisation to make the capital market more accessible and inclusive for Malaysians. Financial technology has led to the emergence of alternative
financial services including robo-advisors, equity crowdfunding and peer-to-peer
financing, which have reduced transaction times and investment cost. To ensure that
investors are aware of the associated risks, including cyber risks, we also adapt our
investor education efforts to respond to emerging digital trends,” said Syed.
The SC has diversified its investor outreach initiatives and communication channels, including digital and social media to extend the reach as well as deliver the message to the right target audience.
The SC’s investor education and outreach initiatives are conducted under the banner of “InvestSmart”. SC’s annual flagship event, InvestSmart Fest, promotes knowledge in capital market products and services, while raising public awareness of scams. Further information on how Malaysians can increase their financial literacy to invest for the future can be found at www.investsmart.com.my.