Malaysia’s prudent stance with social exchange piloting

The Securities Commission Malaysia (SC) is adopting a prudent stance with the inaugural Guidelines on Social Exchange Platforms – in its effort to “strengthen public trust and mobilize more resources toward meaningful social impact”.

While the guidelines will allow for multiple platforms to be registered and operational to attract investments and donations for socially beneficial causes – including those with associated or fully Islamic values – the SC is also ramping up fiscal responsibilities by the beneficiaries of such funds.

To ensure proper usage of funds received from the social exchange platform initiative, the beneficiary cannot spend more than 20% of the amount raised for operating costs in managing the social impact project – which include fees for the platform, legal matters and compulsory reports. These reports must be submitted punctually on a quarterly and annual basis.

Opportunities presented on the platform as a social impact project will have a maximum five-year duration and the beneficiary project manager must be a locally incorporated entity recognized by Malaysian authorities as being a non-profit organization.

These guidelines, associated with the Maqasid Al-Shariah Guidance for Islamic Capital Market and drawing inspiration from models in India, follows the January 2025 announcement by the SC of the five pilot beneficiaries to be on Malaysia’s first social exchange platform:

• Malaysian Association for the Blind,
• Malaysian Relief Agency,
• Mercy Malaysia,
• Suriana Welfare Society Malaysia, and
• WWF-Malaysia.

Applications to operate a social exchange platform opened with issuance of the guidelines on the 19^th September 2025 – these guidelines specify a minimum paid-up capital and shareholders’ funds of RM500,000 (US$118,885) at all times during operations.

Other regulatory requirements – including ensuring checks for legitimacy of the fundraising activity and fiscal responsibility compliance by the beneficiary – extend to the platform operator having to monitor usage of the funds raised by the non-profit organization.