The Securities Commission has revised its Guidelines on Recognised Markets, introducing new requirements to facilitate property crowdfunding.
Chairman Datuk Syed Zaid Albar said that the revision was done in order to heed the government’s call for the Malaysian capital markets to leverage on technology.
“In the 2019 Budget announcement, the government stated that it intends to leverage technology-enabled and innovative mechanisms to provide an alternative funding source for first-time homebuyers, through a property crowdfunding scheme.
“To support the integrity of the scheme and protect investors’ interest, the revised guidelines list out the requirements and obligations of a property crowdfunding platform operator which include minimum shareholders’ funds of RM10 million, obligation to provide fair, clear and timely information to both homebuyers and investors as well as exit certainty at the end of the agreed tenure,” Syed Zaid said at the SC Fintech Roundtable here today.
He had earlier, alongside Finance Minister Lim Guan Eng, announced the registration of three equity crowdfunding (ECF) and five peer-to-peer (P2P) financing platforms.
The ECF are Ethis Ventures, 1337 Ventures and My Startr while P2P are represented by Bay Smart Capital Ventures, CapSphere Services, Crowd Sense, MicroLEAP and MoneySave Capital.
Lim said as of first quarter 2019, the ECF and P2P financing market has provided close to RM350 million of alternative financing for nearly 900 micro, small and medium enterprises (MSMEs).
“Of the total 11,261 investors, 53 per cent are less than 35 years old. The appeal of these alternative and innovative forms of investments to the younger audience is potentially due to the opportunity to engage with businesses from an early stage and the ease of access due to digitisation.
“Given the track record, the addition of these new players will be beneficial to the market,” he added.
Lim noted that the government had committed RM50 million towards a co-investment fund (CIF) for ECF and P2P, under the 2019 Budget.
The fintech wave is shaping the financial landscape in many ways. The digital economy plays a crucial role in Malaysia’s journey towards becoming a high-income nation.
“On average, our digital economy had grown nine per cent in value-added terms between 2010 to 2016,” said Lim, adding by 2020, over 21 per cent of Malaysia’s economy would be digitilised against the current level of 18 per cent.