KUALA LUMPUR, May 6 — The Securities Commission (SC) is seeking public feedback on a proposed framework for tokenised capital market products (TCMPs).
The regulator said there has been a growing interest among capital market participants in offering or undertaking regulated activities relating to TCMPs.
TCMPs refer to the digital representation of capital market products using distributed ledger technology (DLT), such as tokenised shares, tokenised bonds and tokenised funds.
The SC said TCMPs should be differentiated from digital tokens and digital currencies, as the latter are already subject to a separate existing framework.
“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 (which was published today) is intended to generate discussions and seek public feedback in relation to the requirements as set out under the proposed framework,” the SC said in a statement.
The regulator said the consultation paper seeks feedback on key areas, including additional obligations (which include enhanced disclosure requirements, governance controls and record and registry requirements), technology risk management, and additional requirements for licensed persons dealing in TCMPs.
The SC said even though TCMPs leverage DLT, they are treated the same as conventional capital market products under existing regulations. It said the proposed framework is intended to be read in conjunction with existing securities laws and guidelines to ensure consistency in regulatory treatment.
Therefore, the SC said it welcomes feedback from a wide range of stakeholders, including potential issuers, licensed intermediaries, technology service providers, institutional investors, legal and compliance professionals, and industry groups, to ensure a constructive consultation process. The SC 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 today to June 16.
— Bernama
