The Regulation of Equity Crowdfunding in United Kingdom and Malaysia: A Comparative Study

Abstract

Equity Crowdfunding is a novel method for small and medium enterprises to raise fund from the public through an Internet platform operated by a third-party intermediary or platform operator. As an advanced equity Crowdfunding market in the world, United Kingdom regulation on equity crowdfunding is frequently used as a significant ingredient in its development, so it functions as a model for other legislations. Despite there is positive sign of equity crowdfunding market in Malaysia in terms of funds raised by platform operator, still the performance is pale in comparison with the achievement done by United Kingdom. This article analyses the approaches to ECF adopted in United Kingdom and Malaysia in light of the potential for cross?jurisdictional use of the framework. This qualitative research utilizes the secondary data gained from scientific database analysis and library research including documents and precedents on equity crowdfunding and analysed this data by legal interpretation and comparative assessment. The study finds key features of each jurisdiction as well as notable similarities and differences in terms of the obligations of platform operator, issuer and investor. This article recommends for issuer in Malaysia which requires small amount of funds to be exempted on the disclosure requirements and to provide tax incentive for retail investors in order to encourage public to utilize equity crowdfunding.