Executive Chairman of the Kuala Lumpur Stock Exchange (KLSE) said that those who can respond quickly and adapt to the rapidly changing market demands will no doubt be the market leader in their field of service.
"Two significant factors driving market competitiveness are innovation and packaging of products and services which meet changing market requirements.
"For innovation - features of products and services need to change, sometimes, even re-invented to meet requirements. In terms of packaging - service providers have packaged and integrated their services to optimise on the scale of services offered and to add value. For example share registration services are now packaged with corporate secretarial services and accounting services.
Mohd Azlan was speaking at the launch of the Direct Dividend Payment Service at the Kuala Lumpur Stock Exchange (KLSE) today. The Direct Dividend Payment Service enhances investor convenience and protection through the delivery of dividends direct to shareholders' bank accounts.
"It has indeed been the aspiration of shareholders to have their dividend payments credited directly into their bank accounts instead of having to wait for the mail. Clients who opt for the Direct Dividend Payment Service would now be able to enjoy the efficiency, security and confidentiality of this service. Through this service, dividend payments to shareholders are made more prompt, efficient and most importantly, convenient and secure for all parties concerned.
"The share registrar need not prepare individual cheques for shareholders which, even for a small company, may run into thousands of pieces. The burden on administration to mail, monitor and re-issue lost or expired cheques are eliminated. With payment credited direct to shareholders account, benefits are achieved for public listed companies, shareholders and share registrars," he said.
The innovative service is provided by Signet Share Registration Services Sdn Bhd, a member of the Symphony Group of Companies.
"Symphony House and Signet are certainly taking advantage of present development trends in the Malaysian capital market - especially in integrating products and services to achieve economies of scale and scope, whilst enhancing efficiency of delivery systems," he added.
The Direct Dividend Payment Service further complements the objectives of immobilisation of securities and the introduction of scripless trading introduced in phases by the Malaysian Central Depository (MCD), a subsidiary of the KLSE, since 1996 and completed in 1998.
"Immobilisation of securities and scripless trading provided significant benefits to a wide cross section of industry participants including issuers, stockbroking intermediaries, share registrars and investors. Apart from reducing the movement of physical documents, and its attendant costs, the move increased overall market security and confidence in minimising the risks of forgery, theft or loss of share scrips," Mohd Azlan said.
The enhanced efficiency in delivery system through Direct Dividend Payment service will contribute positively to greater investor confidence and participation and facilitate more timely disclosure to all shareholders.
"Public listed companies need to know who their shareholders are on a regular basis in order to meet requirements before commencing any corporate actions. This is to ensure that relevant notices and reports on corporate actions are sent to all shareholders in a timely manner. Shareholders, in turn, need to receive notices and reports in time in order to make well-considered decisions to participate in corporate actions. At a broader level - investment decisions are not only driven by market fundamentals, increasingly, investors also factor in efficiency and cost effectiveness of delivery systems in making investment decisions," Mohd Azlan said.
Moving forward, Mohd Azlan said that greater industry support is clearly needed.
"Share registrars and corporate service providers could innovate further by consolidating and building more competent service businesses. More public listed companies need to participate in paying dividends electronically to shareholders. Further innovation should be explored with an increase in the use of technology.
"With the example set by symphony house and with more service providers committed to improving delivery systems - via innovation, packaging and greater use of technology - the competitiveness and interest in the Malaysian capital market will undoubtedly be enhanced.
