Embracing Innovation
The Securities Commission Malaysia (SC) recognises the inclusive potential of Fintech in making our capital market more accessible to a wider range of stakeholders, agile to emerging trends and upholding accountability among its participants.

We aim to continue our efforts in facilitating innovations to better serve the needs of our economy and participants, while at the same time safeguarding investor trust and confidence. In line with this, we crafted a holistic digital agenda, designed to achieve four main objectives - enhance access to financing, increase investor participation, augment institutional market and develop synergistic ecosystems.
  • Enhance Access to Financing
    Many Malaysian micro, small and medium enterprises MSME(s) face challenges in obtaining funding through traditional sources of funding to meet their financing needs. Despite being a vital component of the Malaysian economy, MSME(s) are traditionally underserved by the financial system.

    To address this, we focused on facilitating market-based financing avenues such as equity crowdfunding (ECF) and peer-to-peer (P2P) financing to narrow this gap, by providing an alternative source of capital for MSME(s) to fund early stages of business development, business expansion, finance working capital and meet other financial requirements.
  • Increasing Investor Participation
    It is important that we continuously identify new and innovative investment solutions to encourage the participation of the emerging “digitally-inclined” generation of investors to invest in the capital market. While most people would associate the below-30 demographic as more digitally-inclined, further research has shown that the Digital Generation is not just limited to millennials, but extends across age demographics. Inspired by the digital user experience they encounter in their daily lives, these investors are demanding similar level of experience from their financial services providers - preferring to interact with technology for their investment needs.

    In response to the emerging pool of digital-savvy investors, the SC is also facilitating the provision of digital-only capital market services, including robo-advisory, which offers investing convenience, better accessibility and transparency at a relatively affordable cost.

    The SC is of the view that the digital investment space is clearly an area where intervention and facilitation by regulators could help the industry to develop new, more cost-effective and transparent ways of delivering investment services to consumers. Such services would complement the existing suite of investment channels to enable more consumers, particularly those who have been underserved, to access these services at a relatively affordable cost.
  • Augmenting the Institutional Market
    By leveraging digital, greater transparency of information can be achieved within the capital market. With greater transparency, our market would become more efficient and be able to attract greater investor participation.

    For example information relating to our secondary bond and sukuk market, used to be highly fragmented among different sources and not easily accessible. While information on a new issuance was generally readily available to all potential investors via offering circulars, nevertheless there was less transparency of bond and sukuk data post-issuance, especially in areas of credit risk and pricing. These data, was only accessible to large institutional investors and seldom, if at all, available to the smaller investors. As part of our efforts to introduce greater transparency and spur further growth in these markets, the SC established the Bond + Sukuk Information Exchange Malaysia (BIX Malaysia) in 2017. BIX Malaysia is a centralised online information platform, to enable investors to obtain necessary information on ringgit bonds and sukuk to assist in their investment decisions.

    Digitising the brokerage industry is key towards enhancing broker’s growth, expanding reach to new and younger investors as well as improving customer experience. The Brokerage Industry Digitisation Group (BRIDGe), comprising representatives from the SC, BNM, Bursa Malaysia and industry panels including banks, payment service providers, brokers as well as share registrars was established in August 2018. Together, BRIDGe serves to accelerate the digitisation of the country’s stockbroking business.
  • Developing Synergistic Ecosystems
    Notwithstanding digitalisation of intermediaries, financial services institution (FSIs), start-ups and exchanges, there is still a need to develop the surrounding ecosystem service providers. These service providers include custodians and trustees, rating agencies and information vendors and brokers. `Digitising’ these ecosystem players will allow faster, and more seamless access to these services, thereby creating a more transparent and efficient market. We are working closely with our capital market ecosystem service providers to build market-relevant digital services and offerings to meet the needs of the ecosystem. 
In September 2015, the Securities Commission Malaysia (SC) launched the “Alliance of FinTech Community” (aFINity) to catalyse and nurture Fintech development in the Malaysian capital market.

It serves as a platform for continuous interactions between the SC as a capital market regulator and all relevant Fintech stakeholders such as innovators, financial institutions, government agencies, ecosystem players and investors.

The aFINity engagements facilitate discussions to create a healthy ecosystem for Fintech to thrive. Towards promoting responsible financial innovations, these engagements:
  • Allow the SC to gain insights from the community on emerging fintech innovations

Through aFINity, we also collaborate with international financial services regulators to promote innovation in our respective market. This includes signing innovation co-operation agreements (Fintech Bridges) and frameworks. You can find the list of our agreements HERE.

If you require our regulatory support and would like to use the referral mechanism, please email us at [email protected] 

  • What’s In It For You?
    • Enjoy first hand updates regarding SC-led FinTech regulatory developments and events
    • Explore and discuss new FinTech ideas and solutions with the SC 
    • Participate in interactive focus groups at the policy formulation stage in line with your area of interest
    • Obtain clarity regarding any FinTech policy and regulatory matters
    • Attend frequently held aFINity talks and educational programmes regarding specific areas on FinTech
  • How Can We Help You?
    • Regulatory Support: We provide regulatory support for new or emerging innovative Fintech ideas
    • Regulatory Enquiries: We provide clarifications for Fintech related queries through aFINity engagements
  • Project Castor
    Project Castor is the SC’s pilot project to explore the usage of Distributed Ledger Technology (DLT) in the regulated capital market space. The project aims to help the SC to demonstrate the technical implementation feasibility of DLT at this juncture to serve as the underlying market infrastructure for unlisted & Over-the-Counter markets. 

    At the end of the project, the SC 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 DLT as the underlying market infrastructure for unlisted OTC markets.
  • aFINity Participants
    Our Membership Demographic
    We currently have 233 aFINity members from a wide range of backgrounds:
    Our Engagement Profile
    We categorise our engagements according to our current initiatives:
Prospective clients go online to define their:
  • Financial characteristics
  • Risk profile
  • Financial goals
by answering a series of questions in an online questionnaire.
Based on the risk profile, a proprietary algorithm is run to define the best suited, personalized investment portfolio to minimize risk and maximize performance.
The resulting  investment recommendation is displayed online for future clients to visualise the potential gains and losses of the proposal, as well as a more or less detailed composition of the proposed portfolio with exposure levels and target underlying securities.
The empowered investor can accept and proceed with an online transfer/account opening.
The algorithm will provide discretionary management services steered by the risk profile and investment allocation.
Customers will be able to track their  investment performance anytime anywhere on their mobile.
HOTLINE: +603-6204 8000
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