[Crowdfunding] What is Equity Crowd Funding (ECF)?
Proudly to tell you that Malaysia is the first country in ASEAN to introduce a regulatory framework to facilitate equity crowdfunding in 2015, with six registered equity crowdfunding (ECF) platform operators was fully operationalise since 2016. Good job to Securities Commission of Malaysia.
Get to know more here...
What's in it for SME and start-up companies?
An alternative source of funding and quicker access to capital at a lower cost compared to traditional banks products
An opportunity for start-ups and SMEs to harness the power of the crowd on the internet to raise funding
Start-ups and SMEs can also gauge market reception of their proposed product and/or services from response received on the ECF platform
And, it's a free advertising also for the companies via social medias to be promoted by ECF operators
What's in it for general public as an investor?
Become a shareholder of a SME and new start-up by owning some shares
Diversify their investments beyond the traditional asset classes
Investors can take up the investment block they are comfortable with
Access to asset class which only available to high-net worth individuals previously
Trust Account ?Yes. Similar to P2P lending, all approved ECF platforms must have a dedicated trust account (operated by public trustee) for each of the issuer company. Monies obtained from investors are placed in a third party trust account until the appropriate disbursements are required to be made. All of the transaction was recorded in trust account to protect the interest of the investors and a certificate of ownership will be issued to all investors. This effectively avoid the misappropriation of investors' monies by ECF operators.
source at : https://financemalaysia.blogspot.com/2018/10/crowdfunding-what-is-equity-crowd.html?fbclid=IwAR0piz4be7PhrjWFGRGxHLuzRF8bWxM36q0mHchbdmda8S2Tfj2_vIMJGWk