SC to Allow Capital Market Product Distribution via e-Service Platforms

Operators of e-wallet or e-payment applications can now partner with Capital Markets Services Licence holders - SC Malaysia

The Securities Commission Malaysia (SC) announced today that it would facilitate the online distribution of capital market products such as unit trusts, through e-Services platforms like e-wallet or e-payment service providers.

The SC’s Guidelines on Recognised Markets now include a chapter on “e-Services platform,” which contains the registration requirements and ongoing obligations for e-Service providers, according to the announcement.

This amendment will allow operators of e-wallet or e-payment applications to partner with Capital Markets Services Licence holders to distribute capital market products to investors, the Commission explains.

It notes that e-wallets or e-payment operators, which are currently subject to the oversight of another sectoral regulator, will be required to obtain the prior approval from the said regulator before submitting their application to the SC.

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Wider distribution of capital market products

“The SC will continue to facilitate the development of innovative digital solutions to improve access to investments for all participants of the Malaysian capital markets. The introduction of the e-Service platform framework will facilitate the wider distribution of capital market products through digital platforms which are already familiar to our investors,” says Datuk Syed Zaid Albar, Chairman of the SC.

The SC had stated during its virtual press conference held on 16 April 2020 that it observed an increase in the number of online trading accounts being registered.

At the same time, there has also been a shift among license holders towards using digital channels to distribute capital market products and services, it said,

Interested operators will have to register with the SC as a recognized market operator (RMO) and may submit their applications from today onwards, according to the SC.

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