By Lawrence Yong
Over 40 entities have registered an interest to look into setting up of the country’s first regulated, unlisted market, dubbed ‘myULM’, mainly aimed at linking investors to unlisted small and medium sized enterprises (SME), the Securities Commission (SC) said at a recent briefing.
The SC expects to make the award for setting up ‘myULM’ by the end of this year.
The 40 entities had registered for a ‘request for proposal’ (RFP) which is available for free upon request. This is just a week after the SC shared with 121 participants last Monday its concept for the market.
An immediate candidate list may come from the pool of some 700 companies which have already been pre-rated as among the top tier of Malaysia’s 600,000 SMEs. The SC was working with SME Corp on the initiative although both were not ready to give any details.
Other candidates which may make up the number include start-ups from bumiputra-focussed agency Teraju, multimedia super corridor (MSC) companies, Bionexus-status companies and companies from the Cradle Fund, which funds start-ups.
Besides exposing SMEs, the platform may also trade intellectual property rights, over-the-counter bonds and derivatives and may even be useful to attract crowd funding for welfare and social causes, aspiring artists and interest schemes such as palm oil grower schemes or multi-level marketing products, the SC said.
Crowdfunding refers to a process used on the Internet to basically solicit money from the public.
“It will be the birthplace of ideas. We are going to be an exchange of exchanges. A online hypermarket,” the SC said.
The SC said that when doing its research, it went through several online platforms which tried to grow an over-the-counter market for unlisted securities in the last decade, including a broker-backed US platform and others in Australia, Taiwan and Singapore which have all mostly failed to take-off.
The plans are for a more holistic approach to its platform to include an infomediary segment, akin to social network giant Facebook, where traders can gather and share information, besides using the SC-watched trading platform.
SC does not plan to directly participate or invest in the platform apart from a regulatory oversight, and being the agency for registering information from companies wishing to list. Investors will still have to do their own due diligence on companies before investing but SC would dutifully fend off fake businesses.
“If you are a scam, you won’t come in,” the SC said.
Brokers and traders had said that the SC’s concept for the online market was too broad and it may have problems drawing enough liquidity.
SC however responded that brokers and traders may not be needed as it was more an online matchmaking arena than a money-generating market like the Bursa Malaysia. There should be no counter-party or official referees unlike the stock exchange and business would be conducted on a free and open platform that may or may not call for a subscription.
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