Alternative Funding Sources for Businesses

SC selects six platforms for equity crowdfunding in Malaysia

SC selects six platforms for equity crowdfunding in Malaysia

Alix Global, Ata Plus, Crowdonomic, Eureeca, pitchIN and Propellar Crowd+

THE Securities Commission Malaysia (SC) has announced the approval of six registered equity crowdfunding platforms, giving small businesses and entrepreneurs greater access to capital.

The six platforms are Alix Global, Ata Plus, Crowdonomic, Eureeca, pitchIN and Propellar Crowd+. They are expected to start operations by the end of 2015, the SC said in a statement.

The equity crowdfunding (ECF) framework is an important milestone for inclusivity in the Malaysian capital market, said Ranjit Ajit Singh, SC chairman and also chair of the Malaysian Venture Capital Development Council (MVCDC).

“The establishment of the ECF is a component of SC’s strategy to democratise finance,” he said at the two-day Synergy and Crowdfunding Forum 2015 (SCxSC) which kicked off today (June 11).

“Over the years, Malaysia has developed a diversified and well-established RM2.8-trillion (US$745-billion) capital market, helping businesses to grow as well as financing long-term investments in the economy.

“However, for capital markets to be inclusive; small and medium enterprises (SMEs) and startups must also be able to obtain market-based financing.

“Hence, it is timely to further widen access through innovation in financial technologies such as ECF platforms,” he said.

The SC is keen to roll out ECF in Malaysia, saying an alternative funding channel like this can facilitate the growth of new small-scale enterprises which contribute significantly to the national economy.

In August 2014, it published a consultation paper requesting feedback, and released initial guidelines in early February under Section 34 of the Capital Markets and Services Act 2007 to introduce new requirements for the registration of ECF platforms and provide governance arrangement for the operator of such platforms.

A call for registration to become ECF operators was also released in February. A total of 27 applications to operate an equity crowdfunding platform in Malaysia were received from a diverse group of interested parties, both foreign and domestic, the SC said.

The SCxSC forum today also saw the signing of an MoU (memorandum of understanding) between Multimedia Development Corporation (MDeC) and three of the six platform operators – Crowdonomic, pitchIn and Propellar Crowd+ – to conduct programmes in funnelling ICT companies to the ECF platforms.

The SCxSC forum, which attracted over 800 participants, was organised in collaboration with Maybank, MDeC, Cradle Fund, Malaysian Business Angels (MBAN) and #edGY, a publication that focuses on youth entrepreneurship and startups.

By Digital News Asia