Equity crowdfunding now allowed for six portals in Malaysia
Malaysia has also embraced equity crowdfunding (aka crowdinvesting) as a means to turn projects into reality. The Securities Commission Malaysia has registered six crowdfunding portals (Crowdonomic, PropellarCrowd+, pitchIN, Eureeca, Alix Global and Ata Plus) as entities that can trade equities in their platforms.
Malaysia’s decision follows a global trend that includes countries as diverse as the United States, Canada, United Kingdom and China. By providing a legal framework that establishes fair rules that protect both the entrepreneur and the investor, crowdfund portals can now safely expand their operations within reasonable rules that don’t hurt the market.
The concept is new to Malaysian authorities, but they acted quickly. Securities Commission Malaysia has held a summit as recently as September 2014 to introduce the concept of equity crowdfunding. In February 2015 an amendment had been already made to their Capital Markets and Services Act (under Section 34) and a public call for registration was made.
Twenty-seven companies, both from Malaysia and abroad, attended to the call. But so far, in June, only the six portals cited were registered. The’re expected to start transactions by the end of 2015.
Elsewhere in the world
Several countries across the globe are providing legal bodies and registering entities to trade securities via equity crowdfunding model, at the same time.
In the United States, while the JOBS Act is pending final regulations, several states have already passed regulations that allow this investment mode, notably in the real estate area.
In Canada, just last month six provinces have joined efforts to provide a single legal framework for startups to raise money via crowdfunding platforms. The regulation puts limits on individual contributions per year and per campaign.
In China, the largest private real estate developer, Dalian Wanda Group, added crowdfunding as one of the means to raise money in the market. In a mix of loan and investment, investors can withdraw their funds three months after each project starts.