BUKIT KIARA: The Securities Commission Malaysia (SC) is in talk with the Ministry of Finance to review its revenue model to ensure its long term financial sustainability.
The talk was, according to Securities Commission Malaysia (SC) executive chairman Datuk Seri Dr Awang Adek Hussin questioning, the fairness of its current fee structure that has remained unchanged for 30 years.
“In terms of (revenue) sharing with Bursa (on duties imposed on trading) for instance, is it fair, this was done 30 years ago, is what we are doing now still relevant with time?
“Secondly, we charge minimal fees to our players. We charge investment banks only RM2,000 a year, (while) they make millions a year,” he said at the SC 2023 annual report press conference today.
The Securities Commission reported its largest net operating deficit in at least a decade in 2023. Awang Adek attributed it to the low average daily trading value in the market.
He highlighted that the average daily trading value is only RM2.2 billion per day and that around RM2.5-2.6 billion is needed to break even.
“Even during the Covid years, because the value of trading was relatively high, we didn’t have that problem with deficit. But last year especially the value was so low.
“Some 90% of our revenues come from duties imposed on trading in market and that is shared between SC and Bursa. Bursa Malaysia has a bigger share than in SC. So when the value is low, we don’t get enough revenue. So that’s the problem,” he explained.
The SC posted a net operating deficit of RM56.46 million in 2023, which is 384.5% higher compared to RM11.65 million a year earlier, on lower trading duties.
Revenue fell 7.2% to RM209.91 million from RM226.16 million a year ago, while expenses rose 12% to RM266.36 million from RM237.81 million previously.
Awang Adek said that the Malaysian stock market was doing very well in the 90s therefore enough revenue was generated from duties at the time.
