Malaysia's securities regulator is allowing providers of electronic wallets to sell unit trusts and other investment products to retail investors via their digital platforms.
But they have to first register as a recognised market operator with Securities Commission Malaysia (SC), which has amended its official guidelines on recognised markets to include a new chapter on e-services platforms.
This will open the door for e-wallet or e-payment apps to partner with licensed capital markets service providers to sell investment products to investors, the regulator says in a statement on May 5.
According to SC Chairman Syed Zaid Albar, the amended guidelines “will facilitate the wider distribution of capital market products through digital platforms which are already familiar to our investors”.
The SC will continue to “facilitate the development of innovative digital solutions to improve access to investments for all participants of the Malaysian capital markets", he says in the statement.
There are more than 15 e-wallet or e-payment service providers in Malaysia at present, including ride-hailing operator Grab Holdings’s GrabPay, TNG Digital, a joint venture between local smart card provider Touch 'n Go and China’s Ant Financial Group, and Boost, a unit of regional telecommunications group Axiata.
TNG Digital Chief Executive Officer Ignatius Ong welcomed the move by the SC, saying that financial technology is “the way of the future”.
The company, which claims to have more than 10 million users, plans to take advantage of the change and introduce new products soon.
“Fintech is the way of the future, and as the leading e-wallet in Malaysia, we are ready and will be rolling out a suite of financial management products to Malaysians very soon,” Mr. Ong tells Asia Asset Management (AAM). He did not provide a specific timeline.
The SC’s move will benefit the fund management industry in the long term as it makes investment products easily available to all Malaysians, according to a fund manager from a Malaysian asset management company.
"However, the growth will take time. It requires all players to do their part in investors' education and financial literacy. The fund management industry has been doing this for decades, and awareness level is still low," the Kuala Lumpur-based manager tells AAM, speaking on condition of anonymity.