Regulatory Sandbox - Digital | Securities Commission Malaysia

Regulatory Sandbox

The SC recognises the rapid evolution of technology, leading to innovations cutting across multiple products and services which may not fully fit into existing regulatory framework(s). Hence, the regulatory sandbox provides a controlled environment for corporations to test new innovations while implementing appropriate safeguards to ensure adequate investor protection.

Corporations developing solutions that add value to the capital markets in areas such as financial inclusiveness, Islamic finance, sustainability, retirement solutions and improving market efficiency are encouraged to apply to the regulatory sandbox.

Key Objectives

To address market needs through facilitating the testing of innovative capital market products and services
To identify opportunities to enhance regulatory policies and best practices.
To provide a controlled environment to test innovative solutions that contributes to sustainable market vibrancy and to adapt to evolving demands of the market.

Eligibility Criteria

Proposed solution must -

be an innovative capital market product or service

not be currently present or available in Malaysia

bring benefit to the Malaysian capital market

be intended for use in Malaysia

not fully fit any of the SC's existing regulatory framework

Corporations must -

Be fit and proper

Demonstrate readiness to offer and test the intended capital market product or service (including having the necessary testing plans and plans to exit the Sandbox)

Demonstrate readiness to deploy the intended capital market product or service on a commercial scale upon successful testing

Conduct adequate regulatory and risk assessment

* Please refer to the Guidelines on Regulatory Sandbox for the complete eligibility criteria and requirements

Permissible time-period for testing

Successful corporations that are admitted into the regulatory sandbox will be permitted a time period of twelve (12) months, or for a duration as approved by the SC, to test their proposed solution.

Pre-consultation session

Interested corporations must participate in the pre-consultation session with the SC before submitting an application to be admitted within the regulatory sandbox.

For the purposes of the pre-consultation session, please submit a business plan to [email protected]. The business plan should include your proposed business structure, operating model and how such proposal satisfies the eligibility criteria above. Kindly refer to the Regulatory Sandbox Application Guide for a detailed list of suggested considerations to address in your business plan and overview of the consultation and application process.

Participation in the pre-consultation session must not be construed as an approval or guarantee for a corporation to be admitted into the regulatory sandbox.

The pre-consultation session is not a replacement for consultancy services or legal support.

Learn More about the Regulatory Sandbox

Information and Documents for Applicants

Applications to join the Sandbox will open on 15 April 2025 until 31 May 2025

Applicant must consult with the SC prior to submitting an application.
If submission is found to be incomplete, only 1 (one) resubmission is allowed and must be submitted within the application window.
Applicants can expect to obtain a response from the SC in 30 working days (from point of their complete application submission) if they have progressed to the evaluation stage. The evaluation stage is currently estimated to take 2 (two) - 4 (four) months, subject to the complexity of the application received.
Any delays in timeline will be promptly communicated.

Guidelines on Regulatory Sandbox

Regulatory Sandbox Application Guide

Application Form

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.