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 Securities Commission chairman Datuk Mohammad Faiz Azmi |
KUALA LUMPUR: The tokenisation of bonds and sukuk, aimed at broadening retail participation in Malaysia’s capital market, is expected to be introduced this year.
Securities Commission (SC) executive chairman Datuk Mohammad Faiz Azmi said the initiative is a collaborative effort between the commission and Khazanah Nasional Bhd.
He said the initiative aimed to make bonds more accessible to retail investors, as the current limitation indicated that only sophisticated investors can participate in certain bond issuances.
"One of the things that we will be announcing later this year is that we’re experimenting with Khazanah to see how we can tokenise bonds.
"And the logic is, if you tokenise a bond, you don’t have to buy the whole bond. You can just buy a percentage of it,” he told a media briefing on the SC’s Annual Report 2024 released today.
Mohammad Faiz added that the initiative would allow SC and Khazanah to assess key functionalities, such as smart contracts and custodial arrangements, while evaluating the benefits and risks of blockchain-based securities.
According to the Capital Markets and Services Act 2007, sophisticated investors include high-net-worth individuals with RM3 million in net assets, or RM1 million in investments, companies with RM10 million in net assets, and institutional investors such as banks, pension funds and insurance companies.
The SC Annual Report 2024 highlighted that blockchain technology offers benefits such as programmability, transparency and accessibility, leading to a global push for tokenisation.
The report noted that the SC is currently developing regulatory guidance to assist intermediaries in understanding and managing risks associated with tokenised securities.
However, Mohammad Faiz acknowledged that the pace of tokenisation depends on regulatory considerations, particularly from Bank Negara Malaysia.
"There are a number of thought processes in that whole digital asset space; tokenisation is certainly on the agenda. But the pace depends also on how the central bank looks at it,” he said.
Despite this, Mohammad Faiz expressed optimism, citing ongoing discussions within the government to advance digital asset adoption.
"The good thing is, there’s a lot of conversations going on in the government.
"I’ll let the government announce the plans when they finally come out, but they want to move the needle. And we, at SC, are more than happy to support that,” he added. - Bernama
Source: Bond option for retirees (2025, 20 March). Retrieved from http://thestar.com.my/business/2025/03/20/tokenisation-of-bonds-and-sukuk-to-be-introduced-this-year---sc
Disclaimer
The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile. The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, Bond and Sukuk Information Platform Sdn Bhd (“the Company”) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.
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