Chapter 2: Licensing & Capital Requirements
To register as a DAX operator (RMO), the SC reviews you on four dimensions: entity, capital, personnel, capability.
2.1 Entity eligibility
| Condition | Requirement |
|---|---|
| Company form | A locally incorporated private limited company (Sdn Bhd) |
| Business purpose | Must be formed to operate a digital asset exchange |
| Substance | Real office and local team in Malaysia — no shell companies |
2.2 Capital threshold (critical)
- Minimum shareholders’ funds: RM 5,000,000, to be maintained continuously while operating.
- This is not a nominal “registered capital” figure — it must be real, usable net assets; the SC checks legality of source and adequacy.
- You also need sufficient working capital to cover at least early operating costs (systems, people, compliance, insurance).
💡 Think of RM 5M as the “ticket” — real launch needs much more working capital. See Chapter 8.
2.3 “Fit and proper” requirements
The SC runs a fit-and-proper review (integrity, competence, financial soundness, no serious adverse record) on each of:
- Board of Directors
- Controlling shareholders / Ultimate Beneficial Owners (UBO)
- Senior management (CEO, CTO, CFO, etc.)
- Compliance Officer
- AML Compliance Officer (AMLCO)
flowchart TD
A[Submit personnel list] --> B[Background & integrity check]
B --> C[Relevant experience
finance/securities/tech] C --> D[Financial soundness] D --> E{All pass?} E -->|Yes| F[Personnel approved] E -->|No| G[Replace / supplement]
finance/securities/tech] C --> D[Financial soundness] D --> E{All pass?} E -->|Yes| F[Personnel approved] E -->|No| G[Replace / supplement]
Key roles must be local / dedicated
- Management with financial-market, securities or risk experience is needed.
- Compliance Officer and AMLCO are typically required to be dedicated, resident in Malaysia, and able to report directly to the board / SC.
- Establish independent risk management and internal audit functions.
2.4 Capability requirements
The SC requires you to demonstrate you can run a fair, orderly, transparent market, including:
- Robust trading rules and market surveillance (anti-manipulation, anti-insider, anomaly detection).
- Sound client-asset protection (fund/asset segregation, custody arrangements).
- Resilient technology and cybersecurity (see Chapter 6).
- Clear complaint handling and dispute resolution.
- Business continuity / disaster recovery (BCP/DR) plans.
- Adequate insurance.
2.5 Ongoing obligations (after you’re licensed)
- Continuously maintain RM 5M shareholders’ funds.
- Submit periodic financial, compliance and operational reports to the SC.
- Notify/seek approval for material changes (ownership, key personnel, systems, new listings).
- Submit to SC inspection and audit.
Summary / action items
- Confirm you can raise and lawfully evidence RM 5M shareholders’ funds (+ working capital).
- Lock in directors, CEO/CTO/CFO, Compliance Officer, AMLCO and prepare their backgrounds.
- Confirm key compliance roles can be locally resident and dedicated.
- Draft trading rules, client-asset protection and BCP/DR frameworks.
➡️ Next: Company Setup