Capital Market Measures in Budget 2019 Reinforce Role of New Technology in Driving a Dynamic Economy

Budget 2019 has identified key priorities to support the transition of the Malaysian economy towards a more balanced, sustainable and inclusive growth. The Securities Commission Malaysia (SC) welcomes these measures that will enable a wider community to benefit from the capital market.

Technology has encouraged product innovation and created new ways and means of doing business in an age of digital disruption. Leveraging these advancements, three new initiatives have been announced in Budget 2019 to broaden retail investors’ participation and stimulate more innovative market-based financing options.

  1. The SC will put in place a regulatory framework to regulate digital asset exchanges and initial coin offerings (ICOs) to facilitate a fair and orderly development of this nascent market. These regulations are expected to come into effect in the first quarter of 2019.
  2. A Co-Investment Fund (CIF), with a grant of RM50 million, will be established to enable the Government to co-invest with private investors in financing the development of new businesses, especially for the Micro, Small and Medium Enterprise (MSME) segment, through equity crowdfunding (ECF) and peer-topeer (P2P) financing platforms.
  3. The introduction of property crowdfunding platforms, which will be regulated by the SC under a crowdfunding framework, will provide alternative financing options to first-time home buyers and give investors exposure to the property sector through smaller investment amounts. This initiative forms part of a series of Budget 2019 measures to facilitate home ownership.

The SC will work with the relevant stakeholders to operationalise these measures. Further details of these measures will be announced in due course. Budget 2019 also announced the establishment of a Special Committee on Islamic Finance led by the Ministry of Finance. Together with the extension of tax incentives for sukuk ijarah and wakalah, this will reinforce Malaysia’s position as a global leader in Islamic finance. Additionally, the extension of incentives for retail sukuk and bonds will encourage more issuances of such instruments and attract greater retail participation in the capital market.

Source: Securities Commission Malaysia