SC introduces property crowdfunding framework

17 May 2019 / 12:12 H.

KUALA LUMPUR: The Securities Commission Malaysia (SC) has released a new property crowdfunding framework to provide an alternative financing avenue for first-time homebuyers.

“We are pleased to announce that we have revised our Guidelines on Recognised Markets today. The revised guidelines will introduce new requirements to facilitate property crowdfunding,“ SC chairman Datuk Syed Zaid Albar said in his speech at the Fintech Roundtable today.

The revised guidelines list out the requirements and obligations of a property crowdfunding platform operator, to support the integrity of the scheme and protect investors’ interest.

The requirements include minimum shareholders’ funds of RM10 million; obligation to provide fair, clear and timely information to both homebuyers and investors; and exit certainty at the end of the agreed tenor.

Interested parties can now submit their application to operate a property crowdfunding platform to the SC.

The property crowdfunding framework was issued after taking into consideration feedback and input from the public and industry players during a recent public consultation by the SC.

Through the platform, homebuyers can raise financing through the crowd and use the period of tenor to accumulate financial resources.

The platform is only open to Malaysian first-time homebuyers aged 21 years old and above while the residential property listed on the platform must be completed with Certificate of Completion and Compliance, and valued at a maximum of RM500,000.

Homebuyers are required to stay in the property for the duration of the tenor but are allowed to sub-let rooms. The financing limit is up to 90% of the value of the property.

The SC also announced eight new recognised market operators today, comprising three equity crowdfunding (ECF) and five peer-to-peer financing (P2P) platforms.

The new ECF operators are Ethis Ventures, 1337 Ventures and My Startr while the new P2P operators are Bay Smart Capital Ventures, CapSphere Services, Crowd Sense, MicroLEAP and MoneySave Capital.

The new financing players will operationalise by year-end. This brings the total number of registered financing platform operators to 21.

As at end-March, the ECF and P2P financing market has provided close to RM350 million of alternative financing for nearly 900 Malaysian micro, small and medium enterprises.

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