Sunday, 18 December 2016

Principles of Regulation - My Journey So Far

When I made the promise to write about the principles of regulation, I thought of going straight into the topic and share my views about them. However, on second thought, I feel it is worth sharing about my journey is dealing with rules and regulation from a number of roles and positions which I had in the past. That would provide readers with the context of where I am coming from and hopefully would lead towards better understanding of my views and perspectives.

While I was regulated as a public accounting practitioner, my exposure about regulation expanded when I joined the Council of the Malaysian Institute of Accountants (MIA). I was given the responsibility to chair the Public Practice Committee which deals with issues facing public accountants in Malaysia. That lead me to be involved in negotiations in trade in services at the World Trade Organisation, ASEAN and some bilateral trade agreements.

Due to my involvement in this area, I represented MIA on the board of the Professional Services Development Corporation, a company setup by the government to promote the services of our professional overseas. I was also appointed to the National Professional Services Export Council, a body which advises Matrade in the same area.

During this period I was also appointed to the Public Practice Committee of CPA Australia. This was an international committee with members from Australia and key countries where CPA Australia had significant presence such as Malaysia and Hong Kong. This exposure was interesting as I was able to observe the issues of practising accountants in other countries as well including how regulation influence their strategies and operations.

When I was the Vice-President and later, President of MIA, I was involved in dealings at global and regional platforms on issues around the accounting profession. In ASEAN for example, I was involved in the negotiations at the Coordinating Committee on Services which was part of the process in negotiating services liberalisation under the ASEAN Framework Agreement on Services.

During my tenure at MIA, I was also involved in dealing with disciplinary lapses of MIA members through the Investigation Committee and later the Disciplinary Committee. These functions are very important for MIA as it was set up via an act of Parliament meaning MIA  has to protect the rakyat from MIA members who failed in performing their professional work and not the other way around of protecting members when they fail to behave professionally.

When I was invited to set up the Audit Oversight Board (AOB) as it's founding Executive Chairman, my life changed from being regulated into a regulator. As the AOB is a body under an act of Parliament (Securities Commission Act), the ways we achieved our mission and vision had to be in line with the expectations of Parliament, which represent all the rakyat of Malaysia.


The AOB had to interact with other stakeholders including the International Forum of Independent Audit Regulators (IFIAR) and the ASEAN Audit Regulators Group (AARG). The issues involved were not limited to audit inspections matters only but also covered areas such as investigations and enforcement.

Towards the end of my career as a capital market regulator I was given additional responsibilities as the Executive Director in-charge of Markets and Corporate Supervision. I was responsible over the regulation of our capital, bond and derivative markets including market institutions such as Bursa Malaysia. My work also required me to ensure market transgressions were detected, dealt with and when necessary recommending for enforcement actions.

I was also the pioneer member of the Operation Review Panel of the Malaysian Anti-Corruption Commission (MACC). The role of the panel was to ensure MACC performed their investigations professionally and not to let off suspects due to reasons other than based on the facts obtained through investigations. We certainly challenged some of the findings which in some cases resulted in prosecution. At the same time, the panel acted as the representative of the rakyat in guiding and encouraging MACC to operate without fear or favour.

Now I am on board of a number of financial institutions which are regulated and also on a self-regulatory organisation which regulates the distribution of collective investment schemes. Somehow I could not run away from regulation, as a regulator or being a regulatee.

I suppose the above should provide you with my background on my understanding and enforcing regulation.

My next posting would be on the Discipline of Regulation as adopted at the World Trade Organisation.
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