We tend to think of regulators as those who exert control through mandated activities such as licensing, registration, approvals, inspections and enforcement. To us, they get the job done by wielding the law, sometimes with muscular displays of authority. But that is only half the tale.
Many regulators are also responsible for developing the domains they oversee. This function requires them to raise awareness and understanding, shape perceptions, foster cooperation and collaboration, tout new ideas and policies, and guide stakeholders to the next level.
For example, the law is explicit about the developmental role of the Securities Commission (SC). The Securities Commission Malaysia Act states that one of the commission’s functions is to encourage and promote the development of the Malaysian capital market, including via research and training.
Lack of accessibility
A lot of other regulators place similar emphasis on disseminating knowledge, but very few consistently publish in-house research that’s accessible to everyone.
Regulators typically have vast institutional memory and expertise worth sharing
This is a missed opportunity because regulators typically have vast institutional memory. They have a lot of experience and expertise worth sharing. And given their part in the formulation and implementation of policies, there is always interest in what regulators and their employees have to say about key topics of the day.
Some institutions around the world, notably multilateral organisations and central banks, issue staff discussion papers and staff working papers to spur public discourse. These present research done by staffers on matters that are relevant to the work of these institutions. Working papers usually feature research in progress, while discussion papers originate from completed research.
Bank Negara is a role model when it comes to the publication of staff research
It is standard practice for the institutions to make it clear that the views expressed in these papers are those of the authors and shouldn’t be attributed to the institutions. This is meant to draw a line separating the researchers’ opinions from official policy and the institutions’ positions. Despite the disclaimers, these documents carry weight because of the association with the institutions.
In Malaysia, Bank Negara is something of a role model when it comes to the publication of staff research. Since 2013, the central bank has uploaded on its website more than 30 papers written by its researchers.
I say ‘something of a role model’ because the central bank stands alone in this category; no other regulator of business activity in the country makes it a point to put out such research papers.
SC takes action
Until recently, that is. The SC’s online knowledge hub now has what it calls a repository for staff discussion papers. At the moment, it contains only one item.
The SC has signalled its intent to continue providing staff research papers for public consumption
Authored by five employees from three SC departments and published in July this year, the paper gives a behavioural perspective on encouraging retirement savings in Malaysia.
The research and recommendations are certainly interesting, but it’s equally significant that the SC has signalled its intent to continue providing staff research papers for public consumption. A LinkedIn post by the SC two months ago says the paper is the first of a series and, on its website, the commission says that the papers ‘are published as part of the SC’s commitment to facilitate the generation and dissemination of new knowledge.’
A lot has been done to draw attention to the first staff discussion paper. This includes a special article in the commission’s Annual Report 2022 that’s based on the paper; an opinion piece in weekly financial newspaper The Edge Malaysia, written by two of the paper’s five co-authors and echoing views presented in the paper; and a mention of the paper by the SC chairman in his keynote address at an event in November.
It is good that the SC appreciates the value of staff research and how it can contribute to the capital market. While we expect our regulators to be fair and firm in implementing policy and enforcing the law, we also hope that they operate with keen intellect, a thirst for knowledge, and a willingness to push novel ideas.
