Bank Negara Malaysia, the country’s central bank, has put together a framework for the sandbox following a month-long consultation with startups, banks and other stakeholders. Malaysia is the latest country following Indonesia, Thailand, Hong Kong, and Singapore, to set up a fintech regulatory sandbox in an effort to help startups experiment with new products and services in a safe environment.
“The Framework reflects the Bank’s long standing policy in striking an optimal balance between promoting innovation whilst preserving financial stability and protecting consumer interest,” stated Bank Negara Malaysia Chairman Financial Technology Enabler Group Aznan Abdul Aziz.
The sandbox will be open to firms looking to test out innovations that improve the accessibility, efficiency, security and quality of financial services. The bank aims to attract ideas that improve risk management and address gaps in investments in the Malaysian economy. Applicants to the sandbox should be able to demonstrate that a product or service has been developed to a “functional stage” and is ready for testing, according to the release. As expected, each applicant must also have a good understanding of risks during testing, with adequate resources committed to manage them effectively.
Last June FundedByMe received regulatory approval from the Securities Commission Malaysia to operate its equity crowdfunding platform in the southeast Asian country. The Securities Commission Malaysia opened up the process to applying platforms in April 2015, with the process closing in May 2015 and approved platforms announced in June 2015. FundedByMe Malaysia, is one of the six equity crowdfunding operators currently approved in Malaysia.