Malaysia Finance Minister Lim Guan Eng announced that Order 2019 would be effective starting from Tuesday (15th January 2019). This means that anyone caught operating unauthorised initial coin offerings (ICOs) or digital asset exchanges face a 10-year jail sentence and an RM10 million fine.
Cryptocurrencies, tokens and other digital assets will be categorised as securities henceforth, and fall under the regulation of the Securities Commission — an ongoing effort between Bank Negara Malaysia and the Securities Commission that has apparently been finalised.
As such, Lim Guan Eng said that “such instruments and their associated activities must be first approved by the SC”, and comply with the associated securities laws and regulations. This development tallies with the SC’s assertion that ICO regulations will come into effect in Q1 of 2019.
In the same announcement, Lim Guan Eng asserted that digital assets, to the Ministry of Finance, has a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and deems it as an alternate asset class for investors.
According to the regulator, the guidelines will among others, establish criteria for determining fit and properness of issuers and exchange operators, disclosure standards and best practices in price discovery, trading rules and client asset protection.
Those dealing in digital assets will be required to put in place anti-money laundering and counter-terrorism financing (AML / CFT) rules, cyber security and business continuity measures. With the coming into force of the Prescription Order, the offering of digital assets, as well as its associated activities, will require authorisation from the SC and compliance with relevant securities laws and regulations.
In order to implement the regulatory framework on digital assets, the SC and BNM will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators. The relevant regulatory framework is expected to be launched by end-Q1 2019.
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The turmoil in the stock market has prompted institutional and retail investors alike to shift more of their investments into good-old cash, sending the total assets inside money market funds to their highest levels since early 2010. According to the Investment Company Institute, assets in money market funds surpassed $3 trillion sometime in December. They rose further last week to $3.07 trillion in the week ended Jan. 9, after seeing a net inflow of $19 billion that week. That’s the highest level since March 2010. A separate report from iMoneyNet said that assets held in money market funds have risen $159.53 billion in the past five weeks. The increase in money market funds was accompanied by major outflows in exchange-traded funds, especially equity and bond ETFs. The ICI said that between Dec. 5 and Jan. 2, an estimated $60.5 billion flowed out of stock ETFs while another $48 billion flowed out of bond ETFs. Cash is often seen as a safe haven during periods when stock and bond prices are declining. The S&P 500 Index fell 14.2% during the last three months of 2018 amid concerns of an economic slowdown. Signs that the Federal Reserve would keep lifting interest rates through 2019 added to concern about bond prices, which decline as interest rates rise. Another factor prompting the shift to cash accounts is that, after three years of rate hikes by the Fed, interest rates are finally returning to levels where some investors believe they offer a modest return in the short term.
“Cash is attractive at today’s levels. Yields have come up a lot without taking on too much risks,” Collin Martin, director of fixed income with the Schwab Center for Financial Research in New York, told Reuters. |
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