The Securities Commission of Malaysia (SCM) has formulated a progressive equity crowdfunding framework (ECF), a first in the South East Asia. The move has been lauded by the market players as ground-breaking, placing Malaysia far ahead of other countries in the region.
Co-Founder and CEO of Crowdonomic Media (CWD) Leo Shimada, called SCM a pioneer, adding that the ECF framework reflects a sound understanding of business and industry developments. “Having in-depth knowledge of the regulatory situations across multiple markets, I can say with confidence that the current SCM framework is one of the most progressive and innovative across the world,” he told DealStreetAsia.
The SCM has recently revised the proposed equity crowdfunding framework, after seeking feedback from potential crowdfunding operators, entrepreneurs, venture capital firms, financial institutions and the general public.
This revised framework is expected be tabled at the Malaysian Parliament, in the near future. If passed, it will lead to amendment of the Capital Markets and Services Act, to include equity crowdfunding as means for raising capital.
Meanwhile, other countries with a thriving crowdfunding sector, are still to formulate appropriate laws. Australia is still mulling over the legislation of equity crowdfunding for small businesses and startups, potentially putting the legislation off till 2016. Currently, the Australian crowd-sourced equity funding is available to wholesale investors with more than AU $2.5 million in assets to be invested or annual earnings of around AU$250,000.
Shimada believes that this fundraising platform can unlock the business potential in Malaysia by increasing the efficiency of capital formation which in turn allows companies to focus on building their business. “Through equity crowdfunding, (Malaysian businesses) will be able to reach out and solicit interest from a diverse group of investors who are each looking at various sectors, growth stages and investment criteria using the power of the Internet and social media.”
Crowdonomic.vc is an equity crowdfunding platform operator based in Singapore. It is now South East Asia’s largest crowdfunding platform, growing at a double digit rate month-on-month.