KUALA LUMPUR: The Securities Commission Malaysia (SC) has introduced a focused scope assessment (FSA) to cut the time to market for new Capital Market Intermediaries (CMIs) and Recognised Market Operators (RMOs) by half.
Examples of CMIs are merchant bankers and stockbrokers, while RMOs operate equity crowdfunding, peer-to-peer and digital asset exchange platforms.
The FSA evaluates the applicant's operational and regulatory readiness in a more targeted and efficient manner.
It aims to shorten the time to market for CMIs and RMOs to three months, where previously it could take more than six months.
The FSA will also require applicants to have an independent party validate their business policies and procedures as part of their submission to the SC.
This will give the applicant more control in ensuring efficiency and encouraging readiness to observe the requirements to undertake a regulated activity.
According to SC, the FSA approach is in light of the capital market's growing maturity and evolving regulatory standards.
SC chairman Datuk Seri Dr Awang Adek Hussin said the fundraising and investment channels via the private market had been on a steady growth for micro, small and medium enterprises (MSMEs) to tap into funds for their expansion plans.
"As at the third quarter of 2023 (3Q23), the ECF and P2P platforms have collectively raised approximately RM5.9 billion, benefiting almost 10,000 MSMEs. "This commitment to develop a more progressive and robust regulatory framework reflects the SC's recognition of the crucial role these businesses play in driving the nation's growth and development," he said in a statement.
Notwithstanding the FSA, the SC continues its regulatory obligation in assessing applicants on critical areas including fit and properness, governance and key risk areas.
It added that amendments to the guidelines on Recognised Markets such as ECF, P2P and digital asset exchange, were also made to set the stage for a level playing field for all RMOs, particularly in ensuring the adequacy of financial resources to commence operations in a fair and orderly manner.
Notably, the capital requirement of RM5 million is now extended to new operators of ECF.
Additionally, amendments to the guidelines include the strengthening of practices against financial crimes, such as money laundering and terrorist financing.