The Securities Commission Malaysia (SC) rolled out Malaysia’s first Social Exchange Pilot Programme (SEPP25), beginning with five non-governmental organisations (NGOs) showcasing social impact projects.
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The SEPP25 forms a major step towards establishing the country’s first-ever Social Exchange as announced by Prime Minister Dato’ Seri Anwar Ibrahim at the Global Forum on Islamic Economics and Finance in May last year in Kuala Lumpur.
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The Social Exchange is a structured platform for fundraising dedicated to projects with positive social outcomes through mobilisation of private sector funding or philanthropic capital. It is expected to be fully operational in 2026 and will benefit entities such as NGOs and social enterprises.
The Securities Commission Malaysia Chairman, Dato’ Mohammad Faiz Azmi, said the initiative reinforces the SC’s continuous efforts in meeting the Sustainable Development Goals and is well-timed as it resonates with the 2025 Malaysian Chairmanship of ASEAN theme of Inclusion and Sustainability.
Building on the SC’s key initiatives such as “Catalysing MSME And MTC Access to the Capital Market: 5-Year Roadmap (2024-2028)” and Maqasid Al-Shariah Guidance for Islamic Capital Market (Guidance), the Social Exchange also expands the spectrum of initiatives that centre on enhancing access and financial inclusion for the capital market.
This also aligns with Malaysia’s Ekonomi Madani aspirations for a fair and inclusive economy, Dato’ Faiz said.
This pilot phase aims for a deeper understanding of critical components towards establishing the Social Exchange leveraging the Malaysian capital market infrastructure and act as an enabler in fulfilling the funding needs of the third sector encompassing NGOs and social enterprises through a regulated environment.
This is similar to the model seen in India where the capital market regulator the Securities and Exchange Board of India undertakes a similar initiative through its two stock exchanges.
Dato’ Faiz stressed that the Social Exchange also reinforces the competitive edge for Malaysia’s leadership in Islamic Finance. The outcomes of the Social Exchange amplifies the utility and applicability of principles of the Maqasid Al Shariah Guidance in strengthening Malaysia’s social impact ecosystem.
This pilot phase is critical for the initial development of the Social Exchange as it will facilitate to create a platform that offers a credible, transparent, and trusted way for donors to track the impact of their contributions.
By consolidating information on participating NGOs and social enterprises, the platform will serve as a means to ensure that every Ringgit drives meaningful change. This will provide adequate disclosure and reporting, promoting enhanced oversight and responsibility for its stakeholders.
The SEPP25 will commence with the following NGOs:
- Malaysian Association for the Blind
- Malaysian Relief Agency
- Mercy Malaysia
- Suriana Welfare Society Malaysia
- WWF-Malaysia
During the pilot phase, the five NGOs will engage with the Securities Commission Malaysia to share relevant data and information as well as provide inputs on areas that the SC has identified as key to the building blocks of the Social Exchange. Key components on the SEPP25 will include social project fundraising requirements to be fulfilled, social impact report and capacity building programmes.
In addition, the fundraising onboarding process based on parameters to be set by the Securities Commission Malaysia will also demonstrate their ability to report project outcomes accordingly.
These steps will be useful as the Securities Commission Malaysia finalises the relevant requirements for the Social Exchange framework later.
To that end, the Securities Commission Malaysia has set up an Advisory Committee, supported by an Implementation Committee, to provide guidance and advice throughout the phased approach of the initiative.
About Securities Commission Malaysia
The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.
The Securities Commission Malaysia has direct responsibility for rule-making, enforcing regulations pertaining to the capital market, ensuring sustainable market growth and development, supervising capital market activities and market institutions including the exchanges, clearing houses and registered market operators, and regulating all entities and persons licensed under the Capital Markets and Services Act 2007. Based on the SCA, the SC reports to the Minister of Finance and our accounts are tabled in Parliament annually.
