SC in talks for framework to enable retail investors to buy corporate bonds
The Securities Commission has started discussions with relevant stakeholders to identify a suitable framework to enable corporate bonds to be offered to retail investors.
Its chairman Tan Sri Zarinah Anwar said on Tuesday, Jan 11 that key issues that needs to be looked at ranging from eligible issuer base, mode of offering, format of offering documents, price transparency.
Other factors which had to be looked into were investor protection and education activities before retail offerings can be allowed, she said at the RAM Annual Bond conference here.
Zarinah said with the growing maturity of the Malaysian capital market, in particular the corporate bond market, it is now appropriate from a regulatory perspective to widen the investor base and investment spectrum.
"An option which is being considered in this regard is to provide the infrastructure which can facilitate direct participation of retail investors in new issues. I believe this development will provide an important source of growth for the market in the coming years," she said.
She said as outlined in the Economic Transformation Programme, the economy would gain by having a portion of the large but mostly untapped savings in the banking system utilised for longer-term investments that promote economic growth.
"To retail investors, investing in corporate bonds will provide a viable opportunity to seek higher returns in consideration of some exposures to credit and market risks.
"Towards this end, the SC has commenced discussions with the relevant stakeholders to identify a suitable framework to implement the offering of corporate bonds to retail investors," she said.