KUALA LUMPUR (Jan 15): The Securities Commission Malaysia (SC) has published the Guidelines on Digital Assets which outline the framework for raising funds via digital token offerings in the country. The guidelines will take effect in the second half of this year.

In a statement today, the regulator said the guidelines have incorporated the feedback it received following the issuance of its consultation paper last year on the proposed regulatory framework for initial coin offerings.

"Digital tokens offering can provide another alternative fundraising avenue for early stage entrepreneurs. This initiative supports Malaysia's Shared Prosperity Vision 2030 (SPV2030) by supporting the growth of SMEs and micro businesses which are targeted to contribute 50% to Malaysia's GDP.

"It also aligned with SPV2030's aspiration to create 30% high technology Malaysian companies," said SC chairman Datuk Syed Zaid Albar.

The guidelines require all offerings of digital tokens to be carried out through an initial exchange offering platform operator that is registered with the SC.

The platform operator would be required to carry out the necessary assessment and due diligence to verify the business of the issuer and the fitness and properness of the issuer's board, as well as to understand the features of the digital tokens.

The SC will be working with the relevant platform operators in assessing eligible issuers during the first phase, it said.

Prospective issuers must also satisfy governance and capital requirements in order to be eligible to conduct a token offering, and must demonstrate that their proposed project or business provides an innovative solution or a meaningful digital value proposition for Malaysia.

The regulator has enforced a cap of RM100 million on funds to be raised via token issuances, with issuers being able to tap on investments from retail, sophisticated as well as angel investors, subject to investment limits provided in the guidelines.

Each issuance must be accompanied by a white paper, which should provide material information on the issuer, digital token and utilisation of funds obtained through the fund-raising exercise.

The SC said it will be monitoring the utilisation of proceeds post-issuance.

"The SC would like to remind members of the public that until the coming into force of the guidelines, no person is permitted to offer or issue any digital tokens in Malaysia," said the regulator.