THE CMDF FUNDING PHILOSOPHY

The CMDF has been operational since January 2004.  Though essentially a statutory fund, the CMDF strives to ensure its value-add by enabling the development of the capital market through the funding of projects that would address clear gaps in the Malaysian capital market. 

For example, the CMDF-Bursa Research Scheme is not merely about funding analysts reports on PLCs.  The Scheme addresses a sufficiency and technical expertise gap of research analysts.  It also encourages corporate disclosure by PLCs, addressing a common grouse against the quality of PLCs.  Most importantly, and the underpinning rationale for funding the project, is that the Scheme enables investors to make informed investment decisions through the reports generated by the analysts.  Such corporate transparency would lead to higher levels of corporate governance, which in turn strengthens the market confidence in Malaysia.

While the law has provided the CMDF with the four statutory objectives, the Board, in its evaluation of submissions, will be further guided by the philosophy that projects funded should be and/or:

  1. In line with the national agenda;
  2. Relevant to meet the needs and priorities of a developing capital market; and
  3. Have a significant impact on the overall capital market by closing a gap and/or which benefits a wide segment of the market.


DEVELOPING THE MALAYSIAN CAPITAL MARKET – THE 3 KEY THRUSTS

Further, the CMDF has aligned itself with the key thrusts of the capital market moving forward, as outlined by Phase 3 of the Capital Market Masterplan. 

This is both a strategic and timely move: strategic, because Phase 3 of the Capital Market Masterplan has been aligned to the 9th Malaysia Plan and timely, as both plans commences year 2006.

The key thrusts of Phase 3 of the Capital Market Masterplan are:

  1. To enhance the overall quality of the market
  2. To enhance the vibrancy and growth of the market
  3. To enhance the international competitiveness if the market

Moving forward, the CMDF will broaden its priorities to be in line with these key thrusts.  This will enable industry to identify and develop projects that would address specific gaps and needs, and which would have a positive impact on meeting the broader needs of the overall capital market.  Such projects are expected to fall within one of the four broad objectives of the CMDF.


ENABLING INDUSTRY KPIs

While the focus of the CMDF is to enable the development of the capital market through funding, the CMDF will ensure that overall projects funded play a role towards meeting the key performance indicators (KPIs) of the capital market.

Through funding of the CMDF-Bursa Research Scheme, the following items are directly addressed:

  • a sufficiency and technical expertise gap of research analysts; and
  • the adequate disclosure of corporate information to investors

Indirectly, supporting the Scheme also encourages greater transparency by PLCs, in line with corporate governance best practices.  Through this, the CMDF-Bursa Research Scheme contributes towards raising investor confidence in the market.

Similarly, through funding of the Minority Shareholders’ Watchdog Group’s operations, the CMDF supports and encourages shareholder activism, which is one of the key tenets of corporate governance.

Through its funds, the CMDF would like to ensure that it is contributing effectively towards the development of the capital market.  A form of measuring the CMDF’s success can be through the various independent surveys and country rankings related to areas such as corporate governance, market liquidity, investor confidence, etc., such as the annual CSLA/ACGA Report on Corporate Governance.




CMDF - BURSA RESEARCH SCHEME

The main purpose of this Scheme is to widen research coverage and raise the profile of small and mid-sized companies listed on Bursa Malaysia.  This Scheme is also in line with measures to enhance the liquidity in the market.

Under the Scheme, each participating company is covered by two research firms.  The Scheme currently on its last leg of a two-year timeframe, and is expected to end mid-2007, after which it will be reviewed by Bursa Malaysia.  There are currently just over 300 PLCs participating.  Research reports generated under this scheme are published on the Bursa Malaysia website and are available free of charge to the public.  Bursa Malaysia is the administrator of this Scheme. 

For further information, please visit www.bursamalaysia.com or contact the following at Bursa Malaysia (tel. (03) 2034 7000):

MINORITY SHAREHOLDER WATCHDOG GROUP

The CMDF supports the Minority Shareholder Watchdog Group in recognition of its public mandate to spearhead shareholder activism, a key tenet of corporate governance. 

Among its core activities, the MSWG is looking at establishing a set of Best Practices for Institutional Shareholders.  The MSWG is also working toward being a self-sustainable and independent body, in order to fully gain the support of the market and industry.

For more information on the MSWG and what it can offer investors – whether retail, institutional, local or foreign – please visit www.mswg.org.my or call +(603) 2070 9090.


SUBMISSION GUIDELINES

  1. Eligibility.  Only institutions related and relevant to the capital market, whether local or foreign (provided that foreign-based institutions are domiciled in country), are eligible to apply for funding of projects that would develop the Malaysian capital market in line with the objectives of the CMDF. 

Submissions from individuals will not be entertained, but are encouraged to work via the relevant industry organization or association.

  1. Project Criteria.Projects for CMDF’s consideration must meet at least one of the following objectives:
      1. Promotion of the Malaysian capital market to be efficient, innovative and internationally competitive
      2. Develop and upgrade skills and expertise
      3. Develop self-regulation
      4. Develop and support high quality research and development programmes and projects

Submissions should also take into consideration, the CMDF funding philosophy and ensure that their projects/proposals are in line with the key thrusts of the capital market, as identified by Phase 3 of the Capital Market Masterplan.

  1. Making the Application.  Applications must be made in writing, and should include but not limited to, the following:
    1. CMDF Application Form (downloaded from the website or available from the CMDF Secretariat), duly completed;
    1. Proposal or Business Plan for the project, programme or scheme, which should set out, but not be limited, to the following details:

      • Objectives of the project/programme/scheme;
      • Impact that the plan would have on the capital market;
      • Target audience(s) – investors or industry, etc.;
      • Stakeholders and/or recipients of the plan;
      • Details of how the project/programme/scheme would work and be implemented;
      • Key Performance Indicators (KPIs), outlining the expected deliverables, timelines and milestones, etc.;
      • Funding amount required, and its proposed disbursement; and
      • Any other relevant or supporting information deemed relevant by the applicant.

Click here for a copy of CMDF Application Form and the the Submission Guidelines.

 Disclaimer | ©2004, Capital Market Development Fund