Equity crowdfunding, or ECF, is a method for private companies, known as issuers, to raise funds for their ventures via equity shares. The issuer offers their company’s equity in exchange for the funding from the ‘crowd’ or investors. In return for the money invested, investors gain a stake in the company and potentially earn their returns.
Is equity crowdfunding legal?
In Malaysia, equity crowdfunding platforms are regulated under Recognised Market Operator (RMO) guidelines by the Securities Commission Malaysia (SC). The RMO guidelines set out registration requirements and impose a set of obligations applicable to equity crowdfunding operators.
There are about 10 approved RMOs under SC and Ethis Malaysia is the first shariah-compliant equity crowdfunding platform approved by the SC.