SC Continues To Drive Digitisation of the Malaysian Capital Market

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The Securities Commission Malaysia (SC), at this year’s SCxSC Fintech Conference 2018, has urged financial services providers to embrace technology to develop a more inclusive, innovative and efficient capital market, in line with the government’s agenda to support the growth of the digital economy.

Minister of Finance YB Lim Guan Eng, who officiated the Conference, shared details regarding the recently announced co-investment fund (CIF) for equity crowdfunding (ECF) and peer-to-peer (P2P) financing. The CIF is part of the government’s initiative to enhance access to financing for the micro, small, and medium enterprises (MSMEs), which traditionally face challenges in obtaining financing to catalyse their growth.

Meanwhile, SC Chairman Datuk Syed Zaid Albar outlined the progress of the SC’s Digital Markets Strategy. He said: “Technology and innovation, if deployed within the framework of robust safeguards, can be harnessed to transform markets for the benefit of investors, intermediaries and the economy at large.”

Securities Commission Malaysia Chairman Datuk Syed Zaid Albar delivering opening speech at SCxSC Fintech Conference 2018.

Syed Zaid highlighted that alternative market-based financing initiatives, namely ECF and P2P, continued to show strong progress. To date, the 13 ECF and P2P registered platforms have collectively raised more than RM200 mil for nearly 500 MSMEs. To scale up this segment, the SC is assessing new applicants for both ECF and P2P platforms, and is expected to make an announcement in the first half of 2019.

Additionally, the SC has received strong interest from new and existing capital market players to offer automated discretionary portfolio management services under the Digital Investment Management (DIM) framework. While the first DIM licence was awarded in mid-October, Syed Zaid shared that the regulator has yesterday granted another approval-in-principle, with more applications currently under assessment.

The SC also unveiled details of Project Castor with the accompanying industry blueprint entitled ‘Capital Market Architecture Blueprint in a Decentralised World’, which explored the technical implementation and feasibility of using Distributed Ledger Technology as the underlying market infrastructure for unlisted and over-the-counter (OTC) markets.

This year’s edition of SCxSC, which focuses on the innovative emerging technologies that could be applied within the capital market, has attracted more than 1,000 participants for the two-day event. Now in its fifth year, SCxSC is the SC’s annual fintech conference for entrepreneurs, technology and digital innovators, industry and government representatives to discuss and explore fintech ideas in the capital market.

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