ECF framework revised after public feedback: SC

  • Feedback from potential operators, entrepreneurs, VC firms, financial institutions, etc.
  • SC considers channels such as ECF crucial to growing new small-scale enterprises

ECF framework revised after public feedback: SCTHE proposed regulatory framework for an equity crowdfunding platform has been revised based on public feedback, Securities Commission Malaysia (SC) said in a statement.
The SC issued a public consultation paper on ECF on Aug 21, and has since received comments and feedback from potential crowdfunding operators, entrepreneurs, venture capital firms, financial institutions and the general public.
Having reviewed the comments and feedback received, revisions to the proposed framework have been made, the SC said.
In an earlier statement, it said ECF is a new form of fundraising that allows startups or other smaller enterprises to obtain capital through small equity investments from relatively large numbers of investors, using online portals to publicise and facilitate such offers to crowd investors.
The SC said it considers alternative funding channels, such as ECF, a crucial and innovative market-based structure to facilitate growth of new small-scale enterprises, which contribute significantly to the national economy.
Recently, it organised a two-day SC Synergy & Crowdfunding Forum (SCxSC) which attracted over 600 participants to discuss and share on equity crowdfunding and related issues.
The salient features of the framework are:

  • All locally incorporated private companies (other than exempt private companies) are eligible to participate on the ECF by issuing ordinary and preference shares to the public.
  • An issuer will be allowed to raise up to a RM3 million for a 12-month period and a total maximum of RM5 million through the platform.
  • Microfunds that are registered with the SC as venture capital firms and have an identified business plan are also allowed to participate on the ECF platform. No fundraising limit is imposed on microfunds but they are only permitted to target sophisticated investors.


  • Retail, sophisticated and angel investors are allowed to invest in companies hosted on the ECF platform subject to the investment limit specified by the SC.
  • Issuers are required to file a standardised disclosure document with the ECF operator providing amongst others, key information on the issuer, the offering and the amount to be raised.
  • Investors will be given a cooling off period of six days within which they may withdraw their investment.
  • If there is a material adverse change effecting the project or the issuer, investors are also given a period of 14 days to opt out of the investment.
  • Funds invested will be kept by the ECF operator in a trust account and will only be released to the issuer after specified conditions are met.

Both the consultation paper and response paper are available on the SC’s website at
Related Stories:
Investor confidence critical for equity crowdfunding: SC chairman
Equity crowdfunding and the need to play it cool
Crowdfunding the beginning of a long-term relationship
Equity crowdfunding: The good, and not so good
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