The Securities Commission Malaysia is seeking public feedback on a proposed framework for tokenised capital market products noting that there has been increased interest from market participants.

Tokenised capital market products are defined as digital representations of traditional capital market products using distributed ledger technology (DLT), such as tokenised shares, bonds, and funds. The SC emphasises that these products are distinct from digital tokens and digital currencies, which are already governed by a separate regulatory framework. The commission noted on the increased interest from market participants in offering tokenised capital market products and engaging in related regulated activities. The proposed framework aims to facilitate the exploration of DLT within capital markets.

These include use cases like programmable assets, fractional ownership, and enhanced transparency and efficiency in record-keeping, while prioritizing investor protection. The consultation paper is designed to initiate discussions and solicit public feedback on the requirements of the proposed framework.

The SC clarifies that even though tokenised capital market products utilise DLT, they will be treated similarly to conventional capital market products under existing regulations.

The proposed framework SC added is intended to be used with existing securities laws and guidelines to ensure regulatory consistency.

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