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Guidelines on digital assets come into force today

28 Oct 2020 / 18:24 H.

PETALING JAYA: The Securities Commission Malaysia (SC) has revised its guidelines on digital assets, which came into force today to regulate initial exchange offerings (IEO) and digital asset custodians (DAC).

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.

The guidelines also include rules and regulations on DAC to facilitate interested parties who wish to provide custody services for digital assets. DACs play an important role within the digital asset ecosystem of the Malaysian capital market to safeguard digital assets of investors. Application and queries related to DAC can be directed to aldmail@seccom.com.my.

“The SC would like to remind 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 RM10 million or imprisonment for a term not exceeding 10 years or both,“ the regulator said.

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 Feb 15, 2021. Application and queries related to IEO platform operator can be directed to rmo@seccom.com.my.

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