SC chairman Datuk Seri Awang Adek Hussin.
KUALA LUMPUR: Come next year, non-governmental organisations (NGOs) or social enterprises have the option to raise money to fund charitable projects via the Social Exchange, which is the first of its kind in Asean.
According to the Securities Commission (SC) chairman Datuk Seri Dr Awang Adek Hussin, Social Exchange is targeted to be launched by the end of this year.
“We expect to launch this exchange by the end of the year or early next year. By early 2025, we can hopefully get this up and running. We also want to time the official operation together with the Asean Summit, which Malaysia will chair the 2025 edition.
“We want to showcase that we are doing something here and maybe this is something that Asean countries can consider doing.”
The Social Exchange is a dedicated fundraising platform for projects with positive social outcomes through the mobilisation of private and philanthropy capital in meeting the needs of the underprivileged.
“The needs and requirements are quite similar in every country. They all want to do it where it is coordinated and regulated to make sure there is no abuse,” he said at a briefing on the sidelines of the Global Forum on Islamic Economics and Finance here yesterday.
Awang Adek said India was the first country to set up a Social Stock Exchange (SSE) and Malaysia has studied the mechanism of India’s implementation.
“One of the countries that have actually done this is India and it runs on their stock exchange, so we will have to explore whether it can be run by Bursa Malaysia here but that is to be determined on how we want to implement it,” he explained.
India’s SSE, under the regulatory ambit of the Securities and Exchange Board of India, is to enable social enterprises and voluntary organisations work for the realisation of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund.
Objectives of the SSE are having a regulated platform that brings together social enterprises and donors, facilitate funding and growth of social enterprises and enabling mechanism to ensure robust standards of social impact and financial reporting.
Awang Adek said following the launch of the exchange, interested organisations or enterprises are likely to be able to register their projects on the exchange in the first quarter of 2025.
Eventually, the listing of the instruments by NGOs and social enterprises on the Social Exchange can be expected by the second quarter of 2025, he shared.
He added that the advisory committee for the establishment of the Social Exchange will be chaired by the SC, with the participation of representatives from the Finance Ministry and Bursa Malaysia, along with other relevant parties.
“This (the framework) is to promote the raising of funds and more importantly to ensure the funds raised in the exchange will be used properly for their intended purpose. One of the objectives of the advisory committee is that once people know we already have a credible framework, then a lot more people will come to contribute,” he said.
Among the key focus areas of the eligible projects under the Social Exchange will encompass diverse themes aligned with the Sustainable Development Goals.
These include social welfare, quality education, capacity building as well as good health and well being. It will also include waqf-related and environmental sustainability projects.
