SC to state entities offering peer-to-peer financing

KUALA LUMPUR: The Securities Commission (SC) will announce selected entities that offer peer-to-peer financing in a couple of months, said chairman Tan Sri Ranjit Ajit Singh.

He said applications to be a registered peer-to-peer financing operator had received overwhelming response.

“We also have five registered equity crowdfunding platforms, attracting seven issuers and raised a total of RM4.7 million,” he said in his special address at the Malaysian Private Equity Forum 2016 here yesterday.

The peer-to-peer framework will enable sole proprietorships, partnerships, incorporated limited liability partnerships, private limited and unlisted public companies to access market-based financing to fund their projects or businesses, via an electronic platform.

Ranjit also announced the Malaysia Venture Capital and Private Equity Development Council will be forming an industry-driven working group tasked to identify recommendations for improving and building capacity within the venture capital and private equity ecosystem.

“This working group will focus on central issues which include exploring how our homegrown dealflow can be further improved, possible intermediation channels that could facilitate portfolio scoping, and how the mobilisation of our savings pool can be further encouraged,” he said.

Over the years, the SC has pursued proactive initiatives to ensure that the right incentives and structure are in place to facilitate venture capital and private equity activities.

One such measure was establishing a tax exemption framework that allows qualifying venture capital/private equity firms which have invested significantly in seed or early stage companies to enjoy tax-free income, he added.

“Being of the view that effective regulation caters to the interests of both the industry and its investors, the SC has taken a pragmatic and proportionate approach in regulating the venture capital and private equity sectors, which is consistent with that taken by other comparable jurisdictions globally, such as Singapore, Hong Kong and the US,” said Ranjit.

He went on to say that the SC also has liberalised certain requirements to accord greater flexibility and better accommodate venture capital and private equity activities.

Ranjit said the liberalisation moves were concurrently supported by measures to enhance the quality of registered venture capital and private equity firms.

“It is with this in mind that the SC has also sought, through its regulatory framework, to ensure that not only will venture capital/private equity firms display good business practices in relation to conducting operations, but also that these firms are well-managed with adequate capital and personnel of sufficient experience and expertise,” he added. – Bernama