The Securities Commission Malaysia (SC) has revised its Guidelines on Recognised Markets to introduce new requirements to facilitate the new Property Crowdfunding (PCF), said chairperson Syed Zaid Albar.
He also announced the registration of eight new Recognised Market Operators (RMO) comprising three equity crowdfunding (ECF) and five peer-to-peer (P2P) financing platforms.
"The introduction of equity crowdfunding and P2P financing has helped narrow the gap between micro, small and medium size enterprises (MSMEs) and the financial system, by providing an alternative source of capital for MSMEs to fund business expansion, working capital and meet other financial requirements.
"We hope the registration of these new platforms will help further broaden the ECF and P2P financing market segments, and enable healthy competition, while meeting unmet demand from both issuers and investors," he said at the launch of the SC Fintech Roundtable 2019 by Finance Minister Lim Guan Eng in Kuala Lumpur today.
In his speech, Lim said the MSMEs contributed 37 percent of the country's gross domestic product last year and this is projected to rise to 41 percent by 2020.
"Through the power of the ‘crowd’, market-based financing platforms such as ECF also allow entrepreneurs to interact with their customers who are themselves investors to shape and refine product ideas.
"As such, crowdfunding is a great asset to businesses and entrepreneurs, generating much-needed revenue and increasing the customer base, while at the same time aiding our country’s economy," he added.
As at end-March 2019, the ECF and P2P financing market provided close to RM350 million in alternative financing for nearly 900 Malaysian MSMEs.
Meanwhile, the PCF offers the same potential as that of ECF and P2P financing platforms in providing an alternative source of financing, but is tailored for first-time homebuyers, whilst providing investors access to a new investment option.
The PCF scheme, eligible for Malaysians aged 21 and above and first-time homebuyers, has a financing limit of up to a maximum of 90 per cent of the property value.
Homebuyers will be required to observe the moratorium throughout the tenure of the investment note, and occupy the property at all times. However, they are permitted to rent out rooms during the scheme's tenure.
On property criteria, it must be completed residential properties valued at not more than RM500,000 at the point of primary offering, and located within Malaysia only.
As for the PCF operator, the platform must be registered with the RMO with a minimum shareholders' fund of RM10 million, of which RM5 million must be set aside and maintained in a segregated account at all times.
The RM5 million should only be utilised for the purpose of ensuring and facilitating the exit certainty.