This article first appeared in The Edge Malaysia Weekly on March 16, 2026 - March 22, 2026

FOR individual investors, one of the standout initiatives under the Capital Market Masterplan 2026-2030 (CMP4) is the review of the Private Retirement Schemes (PRS) to expand their investment options into other asset classes.

These asset classes could include exchange-traded funds (ETFs), the Securities Commission Malaysia (SC) executive chairman Datuk Mohammad Faiz Azmi revealed during the launch of CMP4 last Monday.

“ETFs allow us to create products that are intrinsically cheaper than funds and meet the thematic needs of investors,” he said, noting that many young Malaysians are increasingly investing in ETFs listed overseas.

The regulator added that legislative amendments may be required to ensure the administrative and operational requirements do not incur excessive costs.

Introduced in 2012, Malaysia’s PRS industry has been well accepted by investors, with its net asset value growing to RM8.8 billion in 2025 from RM4.8 billion in 2020. Under the SC’s current PRS guidelines, funds may invest in transferable securities, money market instruments, deposits with financial institutions, derivatives and real estate.

Acknowledging shifts in investor preferences — particularly among younger investors who are increasingly turning to digital platforms and alternative investments — the regulator is looking to broaden access to capital market products through the introduction of new regulated asset classes.

The SC plans to work with industry players to reduce investment barriers, including lowering the minimum investment amount for certain instruments such as retail bonds.

In the report, the regulator highlighted concerns about low retail participation, with only 25% of Malaysians participating in the capital market. As a result, many Malaysian households continue to park their wealth in low-yielding assets, limiting long-term wealth creation and retirement preparedness.

To address this, emerging technologies such as artificial intelligence-driven tools will be adopted to promote investor education and facilitate investment discovery.

The SC also plans to work with other regulators and industry participants to develop systems that allow investors to view their entire financial position in one place by consolidating data from bank deposits, loans, retirement savings and investment portfolios.

On the digital assets front, however, it offered limited details, stating only that it will develop “appropriate” regulatory frameworks for alternative assets to provide greater clarity to market participants.

Meanwhile, for companies, the SC has outlined plans to support businesses at different stages of growth. Coordinated efforts are required to lift the overall capital market to between RM5.8 trillion and RM6.3 trillion by 2030, from RM4.5 trillion in 2025.

Among the initiatives is the institutionalisation of angel investor syndicates to strengthen the country’s venture capital ecosystem and improve funding access for young companies. These early-stage investors pool funds to jointly invest in start-ups.

At the same time, the SC is considering a regulatory framework for private debt instruments and direct lending to support the development of the private credit market. Private credit refers to non-bank financing in which investors — through capital market intermediary funds or sponsored vehicles — provide loans directly to companies.

In developed markets, capital market intermediaries have increasingly ventured into private credit as a way to diversify their offerings.

The SC also aims to broaden participation in the corporate bond and sukuk markets, noting that not all potential issuers are equally equipped to access bond and sukuk financing.

According to the regulator, the bond and sukuk markets have reached a stage of maturity where the focus should be on facilitation rather than pure regulation. Key efforts include helping high-potential issuers in navigating the complexities of bond and sukuk issuance, such as clarifying structural considerations, documentation requirements, execution pathways and engagement with investors and market intermediaries. 

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