What Are IEOs?
Initial Exchange Offerings (IEO) in Malaysia were given the green light after the The Securities Commission of Malaysia (SC) approved two companies as IEO operators. The SC had previously become the first commission in Southeast Asia to regulate equity crowd funding (ECF) and so the foray into IEO, while expected, still represents an exciting development with wide-ranging consequences.
This is because IEOs will create a whole asset class for investors through new financial instruments and are expected to be the catalyst that will launch Malaysia’s capital markets into the digital asset age.
IEOs in Malaysia is still very much at its infancy and as such, interest in them is still low. The general public does not really understand or are largely unaware about IEOs and what they are, as there is a lack of investor education and media attention on the subject. There are even investors who have a misconception that IEOs are just ECF clones, while others mistake digital assets for cyptocurrencies, which tend to raise negative perceptions.
IEOs Defined
IEOS are basically privately issued assets in the form of digital tokens. These tokens can be issued by tech-related privately held businesses of any maturity stage and sold to public investors for the purpose of fundraising of up to RM100 million. However, IEOs can only be performed through approved IEO operators within regulated settings.
Although IEO contains the word exchange as part of its name, there is no exchange involved in the entire process. Currently, digital asset exchanges (DAX) in Malaysia are not allowed to issue IEOs. The most common phrase used is Initial Coin Offering (ICO), but that has been tainted by previous incidents of fraud and scams.
Simply put, IEOs work like Initial Public Offerings (IPO) — a company that wants to go public will issue and float its shares in the open market. IEOs work on the same principle, with one major difference — digital tokens are used instead of shares.
What to know more about IEOs in Malaysia and how they can help your business raise capital?
Gambit Consultancy specializes in providing consultancy services to assist businesses that apply for IEO approval. Our consultancy services will help you navigate the steps you need to take — feasibility studies, whitepaper, tokenomics — for your IEO approval.
Visit us: www.gambit.com.my
