Securities Commission Malaysia (SC) said Monday it will develop appropriate regulatory frameworks for alternative assets to provide clarity to market players.

The SC said in its Capital Market Masterplan 2026–2030 (CMP4) that its priority for new alternative asset classes includes digital assets, securitized real-world assets (RWAs), carbon credits and renewable energy certificates (RECs).

Within the digital asset space, the SC will expand its regulatory framework to allow new crypto offerings and to strengthen the resilience of regulated crypto market players.

This measure will attract anchor participants to institutionalize
the local crypto market ecosystem, while the SC concurrently strengthens surveillance and enforcement efforts against illicit and unlicensed crypto activities.

Separately, focus will be placed on securities tokenization to harness the efficiency and accessibility benefits of blockchain technology.

This necessitates the collaboration with capital market intermediaries, innovation leaders and other agencies, including Bank Negara Malaysia (BNM), to scale up tokenization pilots, enabling innovative products to be tested in real-world conditions and introducing faster time-to-market.

This will complement the SC’s regulatory sandbox to accelerate the pace of innovation in the capital market.

“It should be emphasized that alternative assets may expose investors and markets to novel risks (e.g. crypto illicit activities, mule, integrity of tokens post listing),

“Therefore, any developmental initiatives will be complemented with data-driven supervision and surveillance, for example artificial intelligence (AI)-driven anomaly detection, on-chain
transaction forensics for proactive risk detection and market integrity assurance through strategic partnerships with RegTech players,” said SC.

To further strengthen investor confidence in the new alternative asset classes, the SC will explore enhancements to its investor protection framework, including dedicated dispute resolution forums and insolvency ringfencing safeguards.

The SC will also continue working with BNM to coordinate policies on anti-money laundering and know-yourcustomer (KYC) safeguards for digital assets, including cryptocurrencies.

In parallel, the SC will work with the Ministry of Digital to align on the nation’s digital agenda.

At the same time, capacity building will be coordinated for entities or intermediaries along the value chain.

Industry-wide upskilling initiatives, including thought leadership and SCxSC programs will also be launched to grow the local talent pool. Regulatory digital capabilities and talent pipeline will be enhanced through internal capability development and strategic partnerships with RegTech players, said SC.

According to the report, alternative asset classes are a diverse universe that cover real estate, derivatives, private equity, private credit, hedge funds, crypto assets, infrastructure assets, commodities, minerals, collectibles and others.

Most investors use alternative assets due to their low correlations and high alphas to diversify portfolio risks and enhance performance.

“Global trends indicate rising investor interest in alternative assets and as such, it is important for regulations to continue to be relevant to ensure competitiveness,” said SC.

It noted there is considerable synergy in facilitating greater intermediation of alternative assets.

It is envisaged that alternative assets could help Malaysia achieve its developmental goals, especially in positioning the Malaysian capital market for the next generation investment preferences, it added.

Malaysia’s venture capital and private equity record 21% CAGR between 2020 and 2025