The Securities Commission Malaysia (SC) has launched a public consultation on a proposed framework for tokenised capital market products.

A consultation paper released today outlines potential rules for the digital representation of assets such as shares, bonds, and funds using distributed ledger technology (DLT).

The SC clarified that the framework applies to tokenised versions of capital market products using DLT, and does not cover cryptocurrencies or utility tokens like Bitcoin or $BID, which are already regulated under existing rules introduced in 2019.

The move follows increased interest from market participants seeking to explore tokenisation in capital markets.

The proposed rules aim to enable use cases such as programmable assets, fractional ownership, and improved transparency and record-keeping, while maintaining investor protection.

Although these products are enabled by DLT, they would still be subject to the same securities laws and guidelines that apply to conventional capital market instruments.

The consultation paper outlines several areas for feedback.

This includes additional obligations for issuers and intermediaries such as enhanced disclosures and governance controls, record-keeping requirements, and adherence to existing technology risk management guidelines covering cybersecurity and data privacy.

It also addresses potential requirements for licensed entities that deal in tokenised capital market products.

The SC is inviting input from a wide range of stakeholders including issuers, licensed firms, tech providers, investors, and legal and compliance professionals.

The consultation period runs from 6 May to 16 June 2025.

The consultation paper is available on the SC’s website, and interested parties may contact the SC at aFINity@seccom.com.my to arrange engagement sessions.

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