Shaikh Abdullah Salem al Salmi, Executive President of Capital Market Authority (CMA), approved the licensing of the first global crowdfunding platform operator, Ethis Investment Platform LLC, to be established in the Sultanate of on 3 March 2022.
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, in modern times typically via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.
Ethis Investment is also the first Islamic global crowdfunding platform to set up operations in Oman.
The 1st approval came after the CMA recently issued the new Rules on Crowdfunding Platforms on 21 November 2021.
Following the same, the CMA received overwhelming interest from both international and local crowdfunding fintech players, as the new regulation had been made very facilitative by allowing cross-border investments.
With the new regulation, the CMA will be managing all crowdfunding activities for companies in Oman, including donation-based, rewards-based, equity-based, and Peer-To-Peer (P2P) financing.
The crowdfunding platform initiative by the CMA aims to provide an alternative financing platform for companies, including small and medium-sized enterprises (SMEs).
The initiative is taken to raise funding directly from global and local investors without going through a financial institution intermediary while enhancing financial inclusion by providing easier financial access to all segments of society.
Also, it is in line with Oman’s Vision 2040 as an enabler to develop and diversify the economy, and attract foreign investors into the Sultanate of Oman.
This represents another major milestone for the CMA in developing the capital market and fintech area for the financial industry in Oman, as crowdfunding is driven by fintech which includes the usage of blockchain technology. Blockchain technology is most simply defined as a decentralized, distributed ledger that records the provenance of a digital asset.
It is also another milestone in the development of Islamic finance in the Sultanate of Oman since a key component of Shariah-based financing is enhancing financial inclusion in society.
The Ethis crowdfunding platform will be operated by Ethis Global Group through Ethis Investment Platform LLC in Oman and will be offering both equity and P2P financing crowdfunding platforms.
The Ethis group has an equity crowdfunding platform licensed in Malaysia and a P2P financing crowdfunding platform licensed in Indonesia. Both are regulated by the respective securities’ regulators over there. In addition, they have a donation-based global crowdfunding platform.
The CMA is also expecting to have a few more crowdfunding platform operators, both conventional and Islamic, to be established and licensed in the Sultanate of Oman soon.
