The Securities Commission Malaysia (SC) released a consultation paper to get public opinions on a new plan for tokenized capital market products. This means they are looking at using digital tokens to represent investments like shares or bonds.
The SC explained that tokenized capital market products are digital versions of shares, bonds, and funds. These are created using a special technology called distributed ledger technology (DLT), the same kind of tech used in blockchains.
The SC said tokenized capital market products differ from digital tokens and digital currencies. Digital tokens and currencies already have rules, and the new plan will only focus on tokenized versions of investments like shares and bonds.
The SC has noticed that more people in the capital market are becoming interested in offering tokenized investment products or getting involved in activities related to them under existing regulations.
The proposed framework aims to encourage the use of DLT in capital markets. It focuses on ideas like programmable assets, fractional ownership, better transparency, and more efficient record-keeping while ensuring investors are protected.
The consultation paper is meant to start discussions and gather public feedback on the requirements outlined in the proposed framework.
The consultation paper asks for feedback on important areas, including extra obligations like better disclosure rules, governance controls and requirements for record-keeping and registries.
Other important areas include managing technology risks, such as following the SC’s rules on cybersecurity, data privacy and making sure operations are resilient. It also includes extra requirements for licensed companies dealing with tokenized capital market products.
According to the SC, even though tokenized capital market products use DLT, they are still treated the same as regular capital market products under the current rules.
The proposed framework works alongside current securities laws and guidelines to ensure consistent rules.
The SC said it welcomes feedback from many different groups, including companies that might issue tokens, licensed brokers, technology service providers, institutional investors, legal and compliance experts, and industry groups to ensure the consultation process is helpful.
The SC also encourages people in the capital market interested in offering or dealing with tokenized products to share their plans and talk with the SC for advice.
The public consultation period is from May 6 – June 16, 2025.
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