to leverage on the expertise and capabilities of financial advisers in reaching out to the wider community and at the same time promote access to financial services. as some of you may be aware, bank negara malaysia and the securities commission have signed a memorandum of understanding in august 2007 which provides for the mutual recognition of financial advisers licensed by the bank and financial planners licensed by the securities commission. in addition to providing for the mutual recognition of both licensing regimes through the harmonization of licensing requirements, the mou also introduces green - lane processes for financial advisers and financial planners licensed under the respective regimes to apply for licences under the other regime. bank negara malaysia will fast track the issuance of a financial adviser ’ s licence upon the financial planner having a rm100, 000 paid - up capital as a corporate body. this is with the view of facilitating greater efficiency in the provision of appropriate services by financial planners and financial advisers in response to consumer needs and demands as well as to pave the way for greater convergence in the financial planning industry. i would strongly encourage financial planners licensed by the securities commission to take advantage of the opportunity to apply for a financial adviser licence or become a financial adviser ’ s representative through this greenlane approval process and expand your current business scope. some of the measures implemented earlier to promote the development of financial advisers include facilitating the transformation of the tied agency force into financial advisers ’ representatives by allowing tied agents to continue receiving renewal commissions during the transition period of five years. these measures are indeed a reflection of bank negara malaysia ’ s serious effort and commitment to continuously promote the development of financial advisers as a new distribution channel for financial products and services. moving forward, the financial services intermediary sector which includes financial advisers, would be gradually deregulated and liberalized to pave the way for self - regulation with the expectation of continuous improvement in service standards. we believe that professional pride and aspiration of intermediaries such as financial advisers will provide the necessary self - discipline to ensure orderly development of the sector. in this regard, bank negara malaysia and the securities commission are working together with key industry players in formulating a workable self - regulatory regime for the financial advisory and planning industries. bank negara malaysia has so far issued eight financial advisers licences which employ a total of 57 financial advisers ’ representatives. i encourage you to follow their footsteps and embark on a new chapter in your professional careers, to make the most of the opportunities that you will have to create a lasting impact

channels. the ability of smes to realise this potential depends critically on providing the necessary infrastructure and enabling environment for smes to enhance their capacity and capability to effectively participate and expand in the domestic economy and to venture into the international markets. the financial sector and government support are an essential part of this enabling environment for sme development. repositioning of the financial industry to meet the new demands of smes banks are the dominant providers of financial services to smes. in the recent period, considerable advances have been made among apec economies towards strengthening the scope and access to financial services to the smes. the financial sector has become more broad based, competitive and efficient in providing entrepreneurs with alternative sources of investment capital, a diversified selection of new and innovative products, competitive rates, and more efficient services. this has been accompanied by increased ancilliary support services including business advisory services. these mutually complementary elements are in addition to access, choice of products, pricing and the quality of services to the smes. the more globalised environment however, requires new approaches and paradigm shifts are required for sme financing. first, there needs to be a recognition that smes are going to be increasingly specialized and diversified. therefore, the traditional standard transactional and lending - based banking approach needs to shift towards more customized and differentiated financial products and services that are tailored to the size, profile and specific needs of the different smes. this in turn, requires a different approach in the way financial institutions manage their relationships with smes. as smes become more innovative and entrepreneurial, financial institutions will need to be able to form sound judgments about the business of the smes based on a broader range of credit information which go beyond the narrow traditional focus on collateral and historical financial information. second, smes are likely to see a more pronounced shift towards more innovative and creative industries, such as green technology, medical sciences, information technology and computer animation. in such knowledge - based industries, the true value of companies is not measured in tangible assets, but in intellectual capital and specialist skills. therefore, financial institutions will need to deepen their understanding of these new growth industries, and build capacity to evaluate and manage the associated and related risks. third, with the increasing adoption of e - commerce applications by smes such as internet and mobile banking, financial institutions can also encourage the deployment of technological capabilities to the sme ’ s business operations. this can include working with smes to provide end - to - end supply chain