SC to finalise IEO guidelines this month


THE Securities Commission Malaysia (SC) will finalise the guidelines for its initial exchange offering (IEO) this month which will enable interested applicants to apply as an operator.

SC assistant GM Chan Zhong Yang said the regulator has received a lot of feedback on the guidelines following an extensive industry consultation and have made some minor changes to it.

“It is coming, hopefully by this month. So in October, we will finalise the guidelines and bring them into force. Applications will immediately be opened,” he said during the SCxSC 2020 virtual conference yesterday.

Chan said the guidelines will be on SC’s website and the application period is expected to take over two months before it can proceed with the assessment process.

The statutory body has published guidelines on digital assets earlier this year that outline the framework for fundraising through digital token offering in the country.

The SC approved three digital asset exchanges (DAX) last year, where all three have gone live this year with four digital assets permitted for trading on these platforms.

More than 400,000 accounts have been opened across these three DAXs and the value surpassed RM100 million in August.

Responding to a question on the possibility of bitcoin automated teller machines (ATMs) in the country, Chan said it cannot be developed in Malaysia yet as it poses significant risk related to the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA).

The SC, he said, is open for discussions with interested parties to develop a solution for the matter although it has engaged with several parties regarding the ATMs but the move is dampened by AMLA-related issues.

“These are not acceptable in a regulated space. Nothing can go without complying with AMLA. It is not something that will probably work under our guidelines,” he added.

SC deputy GM Azrina Azmel said robo advisory attracts the younger generation to invest due to its convenient and accessible process. She said based on the records on robo advisory, most of the individuals who opted for the channel are aged 35 years old and below which reflects its popularity among the younger generation.

“It is also for other investors who want to explore different channels of investments.

“With robo advisory, you do not have to do much. You just need to have your goal and the robo advisory will make sure your investments will follow the target you want to achieve. That is one of the best ways to learn about investments,” she said during the conference.

She also said the advent of spare change investing has enabled many individuals to learn about investment activities as it is a method that allows investors to integrate the activity in their daily lifestyle due to the small amount required.

Azrina also said the SC has plans to deepen the Islamic finance market to make it more accessible to a wider group of people.

The development of digital technology has the ability to elevate the Islamic capital market and there is a demand for Shariah-compliant services and products, said Azrina.

“When there are products that do offer Shariah-compliant options, there will be take-ups. We encourage innovation in the Islamic capital market, so that these products are accessible to a wider range of the demography.”