SC leads digital innovation in Malaysia's capital market

KUALA LUMPUR: Securities Commission Malaysia chairman Tan Sri Ranjit Ajit Singh outlined the progress made in digital markets since the commission revealed its digital markets strategy at its flagship fintech event, SCxSC Digital Finance Conference 2017.

The strategy aims to enhance access to financing, increase investor participation, augment the institutional market, and develop synergistic ecosystems.
According to SC, the equity crowdfunding (ECF) and P2P financing platforms have funded 450 campaigns, raising a total of RM50mil to meet the financing needs of the Micro, Small and Medium Enterprises (MSMEs). 

For ECF in particular, more than 70% of the issuers have women or youth as founders, with 40% of the investors under the age of 35.

Second Minister of Finance Datuk Seri Johari Abdul Ghani in his keynote address announced that the government will establish a Co-Investment Fund (CIF) with RM50mil from existing grants to be co-invested in SMEs with private investors through ECF and P2P platforms. 

SC will assist in setting up the fund, and define the co-investment criteria for both equity and debt-based financing.

The SC has also launched its Digital Investment Management (DIM) framework this year, paving the road for automated discretionary portfolio management services to be offered in Malaysia. SC expects the first digital investment manager to be licensed in the first half of 2018.
At Monday's event, SC also announced measures to liberalise Malaysia’s RM1.3tril bond and sukuk market for retail participation, and launched a centralised bond and sukuk information platform to provide easier access and comprehensive information on corporate bond and sukuk.
The centralised information platform, known as BIX (bond and sukuk information exchange), was launched by Datuk Seri Johari and Tan Sri Ranjit this morning. 

Ranjit said the centralised information platform will be an important component of the overall bond and sukuk market infrastructure and the first of its kind to consolidate price and credit information combined with an advanced search function and other useful tools to help investors make more informed investment decisions and increase greater participation in the bond and sukuk market.
Ranjit also said SC is embarking on a pilot project to explore the usage of Digital Ledger Technology in the unlisted and Over-The-Counter markets space. 

The findings from the pilot will form the basis of an industry blueprint. At the same time, SC is reviewing relevant regulations and guidelines to facilitate functional and effective use cases of digital assets in the capital market, including secondary market trading of established crypto currency and digital assets.