.jpg)
The Securities Commission Malaysia (SC) today published a consultation paper to seek public feedback on a proposed framework for tokenised capital market products.
Tokenised capital market products refer to the digital representation of capital market products using distributed ledger technology (DLT) such as tokenised shares, tokenised bonds and tokenised funds.
Tokenised capital market products should be differentiated from digital tokens and digital currencies1. The latter are already subject to a separate existing framework.
The SC has observed growing interest among capital market participants seeking to offer tokenised capital market products or undertake regulated activities relating to tokenised capital market products.
The proposed framework seeks to enable the broader exploration of DLT in capital markets, particularly use cases that enable programmable assets, fractional ownership, improved transparency and efficiency in record keeping, while ensuring investors’ protection.
The consultation paper is intended to generate discussions and seek public feedback in relation to the requirements as set out under the proposed framework.
The consultation paper seeks feedback on key areas including:
- Additional obligations – includes enhanced disclosure requirements, governance controls and record and registry requirements.
- Technology risk management – compliance with the SC’s Guidelines on Technology Risk Management covering cybersecurity, data privacy, and operational resilience.
- Additional requirements for licensed persons dealing in tokenised capital market products
Even though tokenised capital market products leverage DLT, they are still treated the same as conventional capital market products under existing regulations. Accordingly, the proposed framework is intended to be read in conjunction with existing securities laws and guidelines to ensure consistency in regulatory treatment.
The SC welcomes feedback from a wide range of stakeholders, including potential issuers, licensed intermediaries, technology service providers, institutional investors, legal and compliance professionals, and industry associations to ensure a constructive consultation process.
In addition to providing feedback on the consultation paper, the SC also encourages capital market participants interested in offering and/or dealing in tokenised products to consult and discuss their plans with the SC.
The public consultation period is from 6 May – 16 June 2025.
The consultation paper is available here. For any enquiries or to arrange an engagement session to discuss your plans, please contact the SC at aFINity@seccom.com.my.
- This refers to digital tokens and digital currencies that are prescribed as securities under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019. Examples include utility tokens (such as $BID and $FRAC) and cryptocurrencies (such as Bitcoin or Ethereum).
