Response to Oral Question PL9

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YANG BERHORMAT PEHIN ORANG KAYA LAILA SETIA DATO SERI SETIA AWANG HAJI ABD. RAHMAN BIN HAJI IBRAHIM

QUESTION:

YANG BERHORMAT PEHIN ORANG KAYA LAILA SETIA DATO SERI SETIA AWANG HAJI ABD. RAHMAN BIN HAJI IBRAHIM requests the MINISTER OF FINANCE AND ECONOMY II to state the progress of the establishment of the National Stock Exchange, including the timeline target for its establishment, laws and regulations, as well as related matters that until now still do not show concrete developments. Clarification is requested, as requested in 2023, on the main reasons why this establishment has not been realized despite the proposal being under consideration for several years.

YANG BERHORMAT MINISTER OF FINANCE AND ECONOMY II

ANSWER:

This project is progressing well and if conducted systematically, it will create more new quality jobs such as primary dealers, secondary dealers, research analysts, investment analysts, and others.

Simultaneously, the establishment of the Stock Exchange offers opportunities for investors to participate in economic growth and encourages a culture of saving and investing. Moreover, a well-regulated Stock Exchange will enhance the transparency and accountability of the market, which can further increase attractiveness for domestic and international investors and promote a more resilient and diverse economy. The success of this project requires comprehensive market readiness. This not only involves the development of regulations and infrastructure for the Stock Exchange but also includes the development of a supportive ecosystem, including additional service providers such as depository services, custodian services, corporate financial advisors, underwriters, auditors, and capable legal firms.

In this regard, the Stock Exchange Project has made efforts to address the challenges and opportunities for the success of the Stock Exchange project. One of these challenges is the direct implementation of a business model without involving brokers and real-time settlement.

In addition, the Stock Exchange Project is conducting a Feasibility Study and, Alhamdulillah, this study for The Establishment of Securities Exchange, Clearing House, and Central Securities Depository has been completed, and the Implementation Stage is set to begin, Inysa Allah, this month. The studies conducted include:

1. Strategy development containing a strategic roadmap to build a market model ecosystem, regulatory reforms which also include Shariah governance initiatives, industry development, market infrastructure enhancement, capacity-building programs, cost-benefit analysis, and revenue projections.

2. Market outreach as a strategically planned plan to engage stakeholders such as regulators, market participants, companies as potential issuers, and investors.

3. Preparation for implementing the implementation phase action plan such as

   • a more suitable organizational structure for BNX;
   • Shariah governance and sukuk listing;
   • technology requirements for all three BNX entities' platforms; and
   • procedures or application processes for licenses to operate in the Stock Exchange.

Regarding the provision of laws and regulations, the Brunei Darussalam Central Bank (BDCB), in collaboration with the Attorney General's Office, has prepared amendments to the Securities Markets Order, 2013 (SMO). This includes establishing and facilitating the formation of a Listing Authority and organizing an Official Listing, as well as providing regulations for sponsor companies required when companies wish to be listed on the stock exchange. These amendments aim to promote market development, protect market integrity, and ensure investor protection.

Additionally, BDCB is responsible for drafting the Listing Rules. This matter has gone through several discussions with stakeholders to ensure its usability and practical suitability in the local context and market development stage in the country. So far, the work on amendments to legislation and Listing Rules is in the final phase.

Insya-Allah, the MOFE will continue to make every effort to implement this Stock Exchange and seek cooperation from other stakeholders to expedite the completion of this project. Thank you, Yang Berhormat Yang Di-Pertua.