Ladies and gentlemen.
1. A very good morning to all. I am very pleased to see all of you here at the Securities Commission Malaysia’s “SCxSC FinTech Conference 2019”.
We have made significant progress on various fronts in 2019, and I would like to take the next few minutes to share with you these updates.
ENHANCING ACCESS TO FINANCING14. In terms of enhancing access to financing, the Malaysian ECF and P2P markets have grown by leaps and bounds. Collectively, these platforms have raised more than RM580 million benefitting close to 1,600 micro, small and medium sized enterprises (MSMEs).
15. It should be noted that these platforms deploy financing to a diverse range of sectors, including high-tech, education, retail, F&B and consumer products. Moreover, they have also attracted many new investors into the capital market – particularly those below the age of 35, which incidentally accounts for more than 50% of the retail investors.
16. Building on this momentum, this year the SC has registered three new ECF and five new P2P financing platforms. The entry of these new operators will enable a wider range of products to be offered to meet issuers' more varied and specific needs.
17. I am also pleased to note that the ECF market has seen its first two exits. Skolafund is a social enterprise crowdfunding scholarships for university students. It initially fundraised on the Ata Plus platform in 2017, and was recently acquired by one of Asia's biggest donation crowdfunding platforms.
18. Another issuer, MyCash Online which caters to the needs of unbanked migrants, was also recently acquired after initial fundraising on PitchIn. Both of these deals not only provided ECF investors with a healthy return on their capital, but also facilitated the growth of businesses with social objectives. Both exits suggest that ECF could be a viable asset class for investors, and a medium to finance not only commercial but also social enterprises.
Ladies and gentlemen,
19. As part of Belanjawan 2019, the government announced the Malaysia Co-Investment Fund or MyCIF with an allocation of RM50 million to co-invest on a one-to-four basis via our ECF and P2P financing platforms, which has been successfully operationalised this year. For Belanjawan 2020, I am pleased to note that an additional RM50 million has been allocated to this fund.
20. Recognising the importance of building financially sustainable social enterprises, an additional RM10 million was also allocated to MyCIF. This is specifically to co-invest on a one-to-one basis in social enterprises via P2P financing platforms.
21. We expect this injection of funds to further spur the growth of Malaysian MSMEs through our ECF and P2P platforms.
22. Finally, the SC has also introduced guidelines for property crowdfunding (PCF), which provides an alternative financing avenue for first-time homebuyers. Last month, we have registered the first PCF platform in Malaysia, which should commence its operations soon.
INCREASING INVESTOR PARTICIPATION23. At the same time, the SC also aims to boost investor participation by – among others – introducing new and easily accessible investment channels. In 2017, we introduced the regulatory framework for Digital Investment Management (DIM), which is more widely known as robo-advisors.
24. Today, Malaysia has three licensed and fully operational robo-advisors, namely StashAway, MyTHEO and Wahed. Another two parties have received approval-in-principle, and should be fully operational early next year. We continue to see strong interest in this space and will pursue to facilitate its growth.
25. We also have with us this year Mr Eli Broverman and Mr Jeff Cruttenden, the co-founders of two renowned robo-advisors to share the success of their experience in this area.
26. To further diversify Malaysia's digital capital market space, in January this year the SC had introduced the regulatory framework for Digital Asset Exchange (DAX). Three DAX operators have subsequently been registered in June this year.
Ladies and gentlemen,
DEVELOPING SYNERGISTIC ECOSYSTEMS27. Underpinning these efforts is our commitment to develop synergistic ecosystems. In doing this, the SC and our regulated platform operators have actively conducted engagement and education programmes to raise awareness about the FinTech ecosystem in Malaysia.
28. At the same time, the SC also collaborates closely with regional and global peer regulators to share our knowledge and experience, while also learning from developments in other markets.
29. Such collaborations also allow us to participate and play an active role in jurisdictional benchmarking exercises. One such exercise is the Global Alternative Finance Regulation Survey. This was jointly conducted by the World Bank and the Cambridge Centre for Alternative Finance (CCAF) at the University of Cambridge Judge Business School between April and June 2019. More than 110 jurisdictions responded to this survey, focusing on P2P financing, ECF and initial coin offerings (ICOs).
30. The final report will be launched by the World Bank this afternoon. During this session, the relevant experts and survey authors will be sharing some of the key findings arising from the study. I am pleased to note that Malaysia has been identified as one of the most benchmarked-against jurisdictions globally and stands out as a regional leader – particularly in equity crowdfunding.
CONCLUSION31. In conclusion I am happy to say that 2019 has been an extremely busy year, with multiple new ECF, P2P financing, and DAX operators as well as digital investment managers registered by the SC. We are encouraged by the rising level of interest, and we hope that the momentum will continue to accelerate in the coming years.
32. Looking ahead to 2020, we will continue to advance our Digital Agenda by building on the foundations laid over the last few years. There will be several exciting new initiatives coming your way in the coming year and I hope that I can count on your support.
33. With that, I would like to draw my opening remarks to a close. Thank you once again for being here and I look forward to the discussions at "SCxSC 2019".
THANK YOU