KUALA LUMPUR: The Securities Commission (SC) has added a new chapter in the Guidelines on Recognised Markets to require digital asset platform operators to be registered as a recognised market operator.
In a technical briefing to the media today, the SC said the new framework is part of its efforts to promote innovation while ensuring investor protection in the trading of digital assets.
“While there is a framework to facilitate the trading of digital assets, investors are reminded to be mindful of the risk when dealing in digital assets such as sudden price fluctuations and liquidity risks,” it said.
It said the amended guidelines followed the coming into force of the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 on Jan 15 this year.
“Any person who is interested to operate a digital asset platform, including those operating within the current transitional period, has to submit an application to the SC by March 1 this year,” it said.
The SC said under the amended guidelines, an operator must be a locally incorporated company with a minimum paid-up capital of RM5 million upon commencing requirements.
However, the SC said it has the power to require an operator to enlarge its paid-up capital if needed, on a case-by-case basis.
If the operator company is a public-listed entity, then the company will need to appoint at least one independent director as well as address any conflict of interest with regards to the framework.
The operator’s obligations include actively looking into safeguarding its clients by maintaining up-to-date records of investors, monies and digital assets held; segregating trust accounts for receiving and paying out monies maintained in licensed financial institutions; and having arrangements to protect risk or loss as well as theft.
Meanwhile, the SC said it would be issuing separate guidelines on the offering of digital assets via an Initial Coin Offering (ICO), by the end of March 2019. – Bernama
