KUALA LUMPUR, April 13 — The Securities Commission Malaysia (SC) has introduced the regulatory framework for peer-to-peer financing (P2P), setting out requirements for the registration of a P2P platform as provided in the amended Guidelines on Recognised Markets.

The introduction of the new Chapter 13 in the guidelines provides for the duty and responsibility of a P2P operator, type of issuer and investor who can participate in P2P, it said in a statement here.

It is part of the SC’s ongoing effort to provide greater access to market-based financing through the application of technology solutions.

P2P framework will enable sole proprietorships, partnerships, incorporated limited liability partnerships, private limited and unlisted public companies to access market-based financing to fund their projects or businesses, via an electronic platform.

Parties who are interested to operate a P2P platform may submit their applications to the SC starting from May 2. They must be locally incorporated and have a minimum paid-up capital of RM5 million.

Ongoing obligations are imposed on the P2P operator such as ensuring compliance with platform rules, having in place an efficient and transparent risk scoring system for issuer and contingency arrangement to ensure business continuity.

To protect investors, a P2P operator is required to ensure that monies obtained from investors are placed in a trust account until the minimum target amount is met.

When an issuer makes repayment to the investor, the P2P operator is also obliged to place the investors’ monies in a trust account.

There is no investment limit imposed on a sophisticated investor and angel investor while retail investors are strongly advised to limit their investment exposure in P2P to a maximum of RM50,000.

Last year, Malaysia became the first country in Asean to introduce a regulatory framework to facilitate equity crowdfunding, with six registered equity crowdfunding platforms expected to be fully operational this year.

The amended Guidelines on Recognised Markets are available on the SC’s website. — Bernama