The Securities Commission Malaysia (SC) has announced three initiatives to drive innovation in financial technology (fintech), including collaborating with sovereign wealth fund Khazanah Nasional to explore the issuance of tokenised bonds.
According to the SC in a statement on October 1, its collaboration with Khazanah, as a potential issuer, involves exploring how blockchain technology can enhance the efficiency of bond issuance and operations.
“This initiative explores the use of smart contracts and custodial arrangements,” the SC says in the statement.
The other two initiatives announced by the SC were the introduction of a regulatory sandbox, and efforts to enhancing its regulatory framework to encourage securities tokenisation.
The three initiatives, unveiled at the SCxSC Fintech Summit 2024 (SCxSC), are aimed at promoting responsible innovation in the country’s capital market, the regulator says.
Mohammad Faiz Azmi, SC’s chairman, says the regulator is committed to fostering a thriving fintech ecosystem in the capital market.
“To drive innovation in the capital market, the SC is taking a holistic approach. Through initiatives like the regulatory sandbox and SCxSC, we seek to enable industry experimentation and foster collaboration with the broader ecosystem,” he said.
SC says the regulatory sandbox framework provides a controlled environment for testing innovative products and services while ensuring investor protection.
The regulator adds that early next year it will develop a series of guidance notes for intermediaries to understand and manage the associated risks relating to securities tokenisation.