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

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

Corporations must -

demonstrate readiness to address expected testing outcomes including necessary plans for the scaling up of its operations or having an orderly winding down plan or living will, as the case may be

conduct adequate regulatory and risk assessments

Permissible time-period for testing

Successful corporations that are admitted into the regulatory sandbox will be permitted a time-period of up to twelve (12) months to test its 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.

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.

Corporations have until April 2025 to apply for the first cohort of the Sandbox.

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

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.