# Fintech Regulation in Malaysia: The BNM and SC Regulatory Sandboxes > Malaysia runs two regulatory sandboxes for fintech: Bank Negara Malaysia's Financial Technology Regulatory Sandbox for payments, banking and insurance, and the Securities Commission's sandbox for capital-market innovations. This explains how startups apply and graduate. - Category: finance - Language: en - Status: published - Updated: 2026-08-01 - Canonical: https://negaraku.md/en/finance/fintech-regulatory-sandbox-malaysia --- Build a new payment app or a tokenised-securities platform in Malaysia and you hit the same wall: the rules were written before your idea existed. The regulatory sandbox is the door through that wall — a supervised space to test a live product before you hold a full licence. Malaysia has two of them, and which one you knock on depends on what you are building. ## Who runs which sandbox? Two regulators, two mandates. | Regulator | Sandbox | Covers | |-----------|---------|--------| | Bank Negara Malaysia (BNM) | Financial Technology Regulatory Sandbox | Payments, banking, insurance, takaful, money services | | Securities Commission (SC) | Regulatory Sandbox | Capital-market products — investing, alternative financing, tokenised securities | BNM's sandbox is the older of the two, launched in October 2016. The SC's capital-market sandbox is far newer, running its first cohort in 2025. ## How does BNM's sandbox work? BNM refreshed its framework with an enhanced version that took effect on **29 February 2024**. It now has two tracks: - **Standard Sandbox** — the general route, with a simplified eligibility (Stage 1) assessment. BNM aims to respond to applications within 15 days. - **Innovation Green Lane** — a fast track for licensed institutions with a strong record in risk management, governance and compliance. Approved once, an institution can register each new solution through a lighter process, with BNM targeting approval within 30 working days. The catch for founders: the Green Lane is **not open to fintech startups directly**. Eligible applicants are banks, development financial institutions, insurers, takaful operators and money services businesses. A startup can still take part — by partnering with one of those institutions, subject to BNM's approval. Testing carries real conditions. A Green Lane solution typically covers up to 20,000 customers and runs up to 12 months, and the institution must register a new solution at least 15 days before testing begins. Since its 2016 launch, the framework had facilitated more than 110 applications as of the 2024 update. ## How does the SC's capital-market sandbox work? The SC's sandbox targets products that do not fit its existing rules — think alternative real-estate investment, secondary-market platforms and tokenised securities. To qualify, a solution must be genuinely new, not already available in Malaysia, and demonstrably useful to the Malaysian capital market. The applicant must be fit and proper, with a testing plan and an exit strategy in place. The process starts with a **compulsory pre-consultation** with the SC before any formal submission. For the first cohort, applications ran from **15 April to 31 May 2025**. Successful firms get 12 months — or a duration the SC approves — to test, entering in batches. That first cohort selected **six firms** across three focus areas: alternative real-estate investments, secondary-market solutions, and alternative financing. Priority themes the SC has flagged include financial inclusion, Islamic finance, sustainability and retirement solutions. ## What happens when testing ends? A sandbox is a runway, not a destination. At the end of the test window, a firm either graduates — moving to full authorisation and deploying at commercial scale — or exits, winding the product down under the plan it filed at the start. Regulators use what they observe to refine future policy, which is why an exit strategy is a condition of entry, not an afterthought. ## What's next - **Match the regulator to the product first.** Money movement, lending and insurance go to BNM; anything capital-market goes to the SC. Applying to the wrong one wastes a cycle. - **Budget for the pre-work.** The SC requires a pre-consultation; BNM's Green Lane needs a partner institution. Neither is a same-week process. - **Check the current window.** Application rounds open periodically — the SC by cohort, BNM's Green Lane on a set schedule — so confirm the live dates on the regulator's own site before you build your submission. ## Sources - Regulatory Sandbox — Digital — https://www.sc.com.my/development/digital/regulatory-sandbox (Securities Commission Malaysia) - SC Malaysia Picks Six Firms for First Cohort of its Regulatory Sandbox — https://fintechnews.my/55396/innovation/sc-malaysia-sandbox-first-cohort/ (Fintech News Malaysia) - BNM's New Sandbox Introduces a Fast Lane for Financial Institutions — https://fintechnews.my/42303/innovation/bnms-new-sandbox-introduces-a-fast-lane-for-financial-institutions/ (Fintech News Malaysia) - BNM opens July applications for fast-track fintech sandbox — https://theedgemalaysia.com/node/808976 (The Edge Malaysia) --- Source of truth: https://github.com/negaraku-md/NegaraKu.md License: CC BY-SA 4.0