SC initiates innovation lab for alternative trading system

This article first appeared in The Edge Financial Daily, on December 22, 2017.
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KUALA LUMPUR: The Securities Commission Malaysia (SC) said parties interested in establishing and operating an alternative trading system (ATS) in Malaysia may apply to participate in its regulatory sandbox sessions.

The sessions will be held under SC’s FinTech Innovation Lab (aFINity) from Jan 2 to March 30.

The government announced the introduction of ATS — an alternative trading venue that enables investors to trade in capital market products such as shares, bonds, and exchange traded funds and derivatives — in the 2018 Budget announcement two months ago.

In a statement yesterday, the SC said aFINity will allow the commission to discuss and provide feedback to innovative business ideas and concepts, and to explore proof of concept solutions designed to meet specific industry needs.

“During the regulatory sandbox sessions at the lab, interested parties are expected to describe the details of their ATS proposal and provide the SC with information on the type of ATS, the features of the proposed market which include the products to be traded, its users, operating rules and procedures, post-trade arrangements and the value proposition to the overall capital market,” the SC said.

Feedback provided to the SC during the engagement sessions will be taken into consideration in formulating the SC’s regulatory framework for ATS, it added.