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Chief Regulatory Officer of KLSE Bhd, Encik Md Nor Ahmad said one of the key efforts in balancing regulations with market requirements is the on-going review and enhancement of regulations in consultation with industry and market participants.
"Since 1998 KLSE has been holding annual industry dialogues with over 20 industry and market associations, including standard setters organisations such as Malaysia Accounting Standards Board, Financial Reporting Foundation, Malaysian Institute of Corporate Governance and Malaysian Institute of Certified Public Accountants, to name a few.
"Through these sessions, issues on development and enhancement of regulations are recorded and discussed candidly, taking into account feedback and suggestions from representatives of these organisations.
"Where appropriate, the shared findings and analysis from these sessions are incorporated in enhancing market regulations. Before regulations are enhanced, the exposure draft is circulated amongst the same group for comment and feedback," he said.
Md Nor Ahmad was speaking at the KLSE Bhd Corporate Governance Conference in Kuala Lumpur today. The conference was officiated by the Deputy Finance Minister I, Dato' Dr. Shafie Hj. Mohd Salleh.
Md Nor said in incorporating the consultative process in regulations KLSE Bhd had prescribed 15 Practice Notes and 3 Guidance Notes to its Listing Requirements - covering a wide range of areas relating to standards of corporate disclosure and corporate governance.
In addition to the well known Practice Note 4 of 2001 or PN4 for companies with unsatisfactory financial condition, the rest of the practice notes cover, among others:-
- continuing education programmes for directors
- requirements on transactions and related party transactions
- requirements relating to directors and signatory to statutory declaration accompanying annual audited accounts
- disclosure in relation to the Malaysian code on corporate governance and the state of internal control
- submission of semi-annual returns
- independent directors
Meanwhile, further guidance notes were issued for:-
- continuing education programme
- independent directors for the MESDAQ Market
- recurrent related party transactions of a revenue nature for the MESDAQ market
Md Nor said KLSE Bhd had established the Taskforce on Corporate Disclosure Best Practices in 2002 comprising industry representatives in yet another effort to balance the need for regulations and to meet market requirements.
"A key responsibility of the taskforce is to develop and issue a Guidance on Corporate Disclosure Best Practices in consultation with industry and market participants to ensure a broad spectrum of interest is represented.
"The taskforce is now in the final stages of issuing the exposure draft of the Guidance on Corporate Disclosure for feedback and comments to industry and market participants," he said.
Industry representatives members of the taskforce include Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants, Malaysian Institute of Corporate Governance, Malaysian Association of the Institute of Chartered Secretaries and Administrators, Association of Merchant Banks Malaysia and the Federation of Public Listed Company Md Nor added, "Lest we forget, clear and structured rules alone cannot promise sustainable standards of corporate governance.
"What is important is the creation and maintenance of a strong culture of ethics, honesty and good sense, these attributes, for the most part, are voluntary behaviour."
