SC revises guidelines for property crowdfunding

KUALA LUMPUR: The Securities Commission Malaysia (SC) has revised its Guidelines on Recognised Markets  to introduce new requirements to facilitate the new Property Crowdfunding (PCF), said Chairman Datuk 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 here yesterday.

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 percent of the property value.

Homebuyers will be required to observe the moratorium throughout the tenor of the investment note, occupy the property at all times (but are permitted to rent out rooms during the scheme’s tenor). –Bernama