FAQ
STO has gained exponential growth in a relatively short period. The growth can be seen in the total STOs market cap of $529,569,242.20 (as per 28/9/2020).
Yes, Security Token Offering is a regulated fundraising and registered in Australia.
STO is a regulated crowdfunding platform. Security token represents the ownership information of the investment product, recorded on a blockchain. Do send your business plan or project details to lin@stoadvisory.com.my. We will then advise you accordingly based on your information provided.
The amount raised varies from project to project. It generally depends on the project size.
The cost of attracting capital to a great extent, highly depends on the issuer’s business attractiveness. On average, the cost of raising funds varies from 3% to 12%.
An estimated time to execute STO varies from 3 months to 9 months depending on your project size.
- Cost Efficient compare to IPO
- Low barrier to entry
- Access to Global Market & attract all types global investors
- 24/7 Trading
- Regulatory Compliance
- Increased Liquidity
Since STO is registered in Australia, companies can open a bank account in any banks in Australia such as Commonwealth Bank of Australia, Westpac Banking Corporation (Westpac), Australia and New Zealand Banking Group (ANZ), and National Australia Bank (NAB).
Investors can purchase the shares on the share registry platform by complete KYC verification and submit proof of payment to the issuers. The purchased shares will then transfer to the investor’s account. In the case of investors wishing to trade the share, they can sell back to the issuer by submitting an application and the issuer will then approve and buy back.
| Equity Crowdfunding (ECF) | Peer-to-peer Lending (P2P) | |
| Permitted businesses | Only Malaysia locally incorporated private limited companies, unlisted public companies, or limited liability partnerships with paid-up capital up to RM20 Million or less than are eligible | Only Malaysia locally incorporated sole proprietorship, partnership, limited liability partnership, private limited companies, and unlisted public companies. |
| Fundraising Limit | RM20 Million | There is no limit imposed by the SC on the amount of funds that may be raised by an issuer on a P2P platform. However, the amount of funds that may be raised on the P2P platform or the rate of financing will depend on the outcome of the issuer’s risk scoring conducted by the P2P operator. |
| Types of Shares | Ordinary / Preference Shares | – |
| Minimum raised amount | The concept of ‘all or nothing’ is applied to the ECF fundraising exercise. In this regard, an issuer must raise the targeted amount from investors or the campaign is considered unsuccessful. When the ECF campaign is unsuccessful, all monies collected are returned to the investors. A targeted range of fundraising amount (minimum and maximum amount), must be set for each ECF campaign. | An issuer is allowed to keep the funds raised on a P2P platform provided that he has at least raised 80 per cent of the target amount. |
| Maximum raised amount | The issuer is only allowed to keep the funds raised within the targeted range of fundraising amount (minimum and maximum amount). A campaign is considered successful once the targeted amount sought to be raised has been met. | An issuer is not allowed to keep any amount which exceeds the target amount. |
| Can raise funds concurrently on multiple platforms? | No. An issuer can only raise funds on one platform at any one time. An issuer may be permitted to be hosted on an ECF platform and peer-to-peer (P2P) financing platform at the same time, subject to disclosure requirements as may be specified by the platform operators | An issuer can only be hosted concurrently for different purposes on multiple P2P platforms. However, the issuer is required to disclose to the P2P operator its intention to seek funding from other P2P operators concurrently. |
| Issuer Disclosure Requirements | 1. Information that explains key characteristics of the company 2. Information that explains the purpose of the fundraising and the targeted offering amount 3. Information relating to the business plan of the company (min 3-year business plan & financial projection) 4. Financial information relating to the company > For offering above RM500,000 | 1. Information that explains key characteristics of the company 2. Information that explains the purpose of the fundraising or Islamic Investment note and the targeted offering amount 3. Information relating to the business plan 4. Information relating ro his intention to seek funding from any other P2P platforms concurrently and 5. Financial information relating to the company > For offering above RM500,000 |
| Companies prohibited from raising funds | 1. Companies with no specific business plan or its business plan is to merge or acquire an unindentified entity (i.e. blind pool) 2. Commercially or financially complex strucutres (i.e. investment fund companies or financial institutions) 3. Public listed companies and their subsidiaries 4. Companies, other than a microfund, that propose to use the funds raised to provide loans or make investment in other entities. 5. Companies with paid up share capital exceeding RM20 Mil 6. Investment Holding Company are not allowed to raise funds. The issuer must be an operation running basic company 7. Any other type of entity that is specified by the SC | 1. Companies with no specific business plan or its business plan is to merge or acquire an unindentified entity (i.e. blind pool) 2. Commercially or financially complex strucutres (i.e. investment fund companies or financial institutions) 3. Public listed companies and their subsidiaries 4. Companies, other than a microfund, that propose to use the funds raised to provide loans or make investment in other entities. 5. Any other type of entity that is specified by the SC |
| Type of investor | Sophisticated Investors – no restriction on investment amount Angel Investors – Max of RM500,000 within a 12-month period Retail Investors – Max of RM 5,000 per issuer with no more than RM50,000 within a 12-month period | |
