Summary of New Amendments to the Equity Crowd Funding Regulations in Malaysia

Malaysia’s equity crowd funding (“ECF”) industry is experiencing a steady increase in popularity as a preferred alternative funding option, with over RM221 million raised from different small companies and startups according to the Securities Commission (“SC”) Annual Report released in 2023. 

Since the issuance of the Guidelines on Recognised Markets (“RMO Guidelines”) in 2015, the SC has implemented several measured changes in the regulatory regime to further expand the scope and increased expectations on the ECF operators to enhance disclosures and investors’ protection. 

Stricter Issuer Requirements

The SC now limits ECF campaigns to entities including exempted private companies, public listed companies to companies that have no business plan (i.e. blind pool) etc. Considering that ECF is aimed toward early stage growth startups, this move indicates a compromise that the SC expects issuers raising funds to have at least a business plan (including on  how the funds raised will be utilised).

Enhanced Investor Protection

The expanded guidelines require issuers to provide more disclosures including:

  • Details of the offered shares such as number of shares and price of shares being offered, funds utilisation and its timeframe;
  • Particulars of all the key personnel including name, nationality, age, profession, qualification, past experiences and any potential conflict of interest; and 
  • If the issuer is a public company, mandatory information for public companies. 

These additional disclosures will enhance the ability for prospective crowdfunding investors to conduct their due diligence and assess the issuer’s business.

On a separate note, these obligations may likely further increase regulatory burdens for the ECF operator’s management team to review and consider all documents and information provided by the issuer as the SC expects the ECF operator to decide if the issuer should be permitted to raise funds on its ECF platform. 

Increased Fundraising Limit

Issuers can raise up to  a maximum sum of RM20 million throughout the ECF lifetime from the previous limit of RM10 million previously. The amendment may allow issuers to stay private longer while  continuing to fund their business before deciding to go public (i.e. initial public offering (‘IPO’).  

No Concurrent Fundraising

 An issuer is not permitted to conduct concurrent fundraising on multiple ECF platforms or on any stock market of Bursa Malaysia. In other words, an issuer is only permitted to raise funds on one ECF platform at a time.

Increased financial requirements for ECF operators

Any applicant seeking to apply to operate as an ECF platform will need to have at least RM5 million paid up capital. This new amendment is consistent with the current paid up capital requirement imposed on P2P operators.


These new regulatory updates may indicate SC’s role in promoting a healthy progress to promote a secure funding environment for both businesses and investors seeking to invest in companies hosted on an ECF platform.

If you are a company planning to raise funds on an ECF campaign and looking for an equity crowdfunding lawyer to ensure that the investment agreements and documents are industry standard and legally compliant, please contact us today for a free initial legal consultation.

Disclaimer: The content provided on this website does not constitute legal advice but are for general informational purposes only. It may not be the most up-to-date legal information after the published date. To seek professional legal advice, please book in a free initial 30 mins legal consult with us.

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Izwan Zakaria

Izwan likes to write about startups. He enjoys working and mentoring entrepreneurs and founders. He is also a startup lawyer at Izwan & Partners.

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