Securities Commission Malaysia’s IEO Guidelines Comes into Force Today

Securities Commission Malaysia’s IEO Guidelines Comes into Force Today

by October 28, 2020

The Securities Commission Malaysia (SC) has revised its Guidelines on Digital Assets (Guidelines), which came into force today to regulate Initial Exchange Offerings (IEO) and Digital Asset Custodians (DAC).

SC said that the Guidelines will facilitate the SC’s objectives in promoting responsible innovation in the digital asset space, while at the same time managing emerging risks and safeguarding the interests of issuers and investors.

Earlier in January 2020, the SC had announced a framework to enable companies to raise funds via the issuance of digital tokens in Malaysia through an IEO platform registered by the SC. Under the Guidelines, IEO platform operators will be required to assess and conduct the necessary due diligence on the issuer, review the issuer’s proposal and the disclosures in the whitepaper, and assess the issuer’s ability to comply with the requirements of the Guidelines and the SC’s Guidelines on Prevention of Money Laundering and Terrorism Financing.

With the issuance of the revised Guidelines today, interested parties who wish to register as an IEO platform operator or DAC can start submitting their applications to the SC. The deadline for applications to be registered as an IEO platform operator is 15 February 2021.

Equity crowdfunding platform operator pitchIN has previously revealed that it is keen to secure the necessary regulator approval from SC to operate an IEO platform.

SC reiterated in its press statement that members of the public that they are not permitted to offer, issue or distribute any digital assets in Malaysia without obtaining a registration or authorisation from the SC.

Any person found to be operating a digital exchange or offering or distributing any digital assets without the SC’s authorisation commits an offence and may be liable, on conviction, to a fine not exceeding ten million ringgit or imprisonment for a term not exceeding ten years or both.

The full version of the Guidelines and more information on application as IEO platform operator or DAC can be found here.