Capital markets watchdog the International Organisation of Securities Commissions (IOSCO) is to open its first office in Asia by the end of 2016.

The regulator says the new ‘regional hub’, based in Kuala Lumpur, will serve as IOSCO’s base for Asia-Pacific as a whole.

It’s the first time that the organisation, which regulates more than 95% of the world's securities markets, will have a presence outside of its current headquarters in Madrid.

The centre will play a “key role” for IOSCO when it comes to building of regulatory capabilities across developed and emerging markets.

It is also expected to facilitate cross border regulatory cooperation and attract leading market and regulatory experts to Kuala Lumpur.

Dato’ Seri Ranjit Ajit Singh, chairman of Malaysia's Securities Commission welcomed the decision.

“Capital markets globally have now become a key driver of economic growth and financing, and the Asia-Pacific region has some of the world’s most significant economies and capital markets,” he said.

“The selection of Malaysia clearly demonstrates international recognition of Malaysia's efforts towards building a high quality and well-regulated capital market and the role of the country in the region".

IOSCO board chairman, Greg Medcraft added: “The regional hub in Kuala Lumpur will take IOSCO to a new level and will play a significant role in developing and deepening regional capital markets.”