MCO Moodys Corp

Malaysia will scrap mandatory ratings for bonds issued in the country and allow foreigners to wholly own unit-trust management companies.

The bond-ratings requirement will be removed starting Jan. 1, 2017. The government will also allow foreign-owned rating agencies to operate in Malaysia.

"The entry of international agencies will further enhance the quality and standards of rating services, introduce a more competitive fee structure and widen both expertise and the range of credit-rating services on offer," Malaysia's Prime Minister Najib Razak said in an address at an investor conference.

Foreigners will be allowed to own 100% of unit-trust management companies. "There will be no barrier to entry for foreign unit-trust management companies coming into Malaysia," he said.

Write to Jason Ng at jason.ng@wsj.com

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