The Securities Commission Malaysia (SC) is looking to launch a new fundraising platform called the Social Exchange (SE), which will be dedicated to projects that seek to achieve positive social outcomes and meet the needs of the underprivileged community by mobilising private and philanthropy capital. As the first of its kind to be introduced in the ASEAN region, it is expected to be launched by the end of 2024, and opened for registration in the first quarter of 2025.

Chairman of the SC, Awang Adek Hussin said that the SE will specifically benefit entities like non-governmental organisations (NGOs), social enterprises, and state Islamic religious councils. They can tap into this new avenue to fund their projects that have positive social outcomes for the underprivileged community, with zero coupon and capital repayments.

That said, all entities that wish to be registered and listed on the SE must first go through a vetting process before being onboarded. This is to ensure their credibility and integrity in their respective industries.

“One of the objectives is once people know that we have a credible framework, then a lot more people will come out, want to contribute. The other [objective] is [to ensure that] those money raised will be used as intended because we have assurance, whereby the entities must be registered,” said Awang Adek, who also stressed that the SE is not comparable to equity crowdfunding (ECF) and peer-to-peer (P2P) as these avenues seek to gain profit.

To get things rolling, the SC will first establish an advisory committee so that it can speed up the implementation of the SE with proper governance. This committee will include representatives from the SC, the Ministry of Finance, and Bursa Malaysia. A detailed framework guiding the implementation will also be released soon, outlining all the requirements to ensure that the funds raised are used as intended.

“We want to time the official operation of the exchange with the ASEAN Summit, which will be chaired by Malaysia in 2025,” Awang Adek further stated, adding that the SE is expected to be showcased at the Summit.

The SC chairman acknowledged as well that the conception and implementation of the SE drew inspiration from India’s Social Stock Exchange (SSE), which is a part of the country’s National Stock Exchange (NSE) and the Bombay Stock Exchange. “In India, this is run on their stock exchange, so we will have to explore whether it can be run by Bursa Malaysia. That’s one possible option,” he said.

(Sources: Free Malaysia Today, New Straits Times)

• TAGS:
• ASEAN Summit
• Bombay Stock Exchange
• Bursa Malaysia
• Dato’ Seri Dr Awang Adek Hussin
• India National Stock Exchange
• India Social Stock Exchange
• Ministry of Finance
• Securities Commission
• Securities Commission Malaysia
• Social Exchange (SE)