Securities Commission Malaysia seeks public feedback on proposed regulatory framework on ICO and property crowdfunding

The Securities Commission Malaysia (SC) is seeking public feedback on the framework for Initial Coin Offering (ICO) and property crowdfunding.

The regulator has published two consultation papers – one on the proposed regulatory framework for the issuance of digital asset through ICOs, and the other on the proposed regulatory framework for property crowdfunding.

The consultation paper on ICO discusses the proposed framework for, among others, the eligibility of issuers, the need for transparent and adequate disclosures as well as utilisation of proceeds of the ICO. The SC said:

“The lack of a regulatory framework for ICOs currently, exposes investors to the above risks and makes them vulnerable to fraud and manipulation. Regulation is therefore required to mitigate the risks posed by ICOs for purposes of investor protection and promoting confidence in the ICO market.”

To that end, the regulator said that it is adopting a two-pronged approach to mitigate incidences of fraud while protecting market integrity. Elaborating further, it said:

“This approach entails an authorisation for the offering or issuance of the ICO and the registration of a disclosure document (Whitepaper) which complies with prescribed minimum requirements set by the SC.”

In its consultation paper on property crowdfunding, the SC is seeking public feedback on the proposed regulatory framework which will, among others, set the eligibility requirements of first-time homebuyers, criteria of properties which can be listed on the platform, obligations of platform operators and financing limits.

Those interested can submit their comments by 29 March 2019.