Today, my friend Datuk Kadir Jasin posted on his blog on the possibility that there might have been a leak of the contents of the recent Budget given the launch of FundMyHome just two days after the presentation of Budget 2019 in Parliament.
This was also previously mentioned by YB Datuk Seri Najib Razak, to which I have responded both through the social media as well as in The Edge Financial Daily.
Rest assured I share the same concerns as every Malaysian on the sanctity and confidentiality of the Government’s national budget. It is a highly confidential document, protected by the OSA.
I believe the misunderstanding comes about due to legal complexities.
What the YB Minister of Finance announced was that the Government is considering approving regulated property exchanges under the peer-to-peer framework and the Securities Commission (SC) is entrusted with the task. YB Lim Guan Eng mentioned that the target for approving such regulated property exchanges is first quarter 2019.
Meanwhile, I assume the SC is reviewing the rules and regulations, investors’ protection, possible mechanisms and so forth. It will then proceed to issue a consultative paper as per their guidelines and all stakeholders will be consulted before any new guidelines governing the new P2P framework are issued.
SC will then proceed to invite applications, review compliances before licenses are issued.
The new Malaysia does not tolerate rent-seeking or monopolistic behaviours and I am sure this will be the case as well.
What YAB Prime Minister Tun Dr Mahathir Mohamad launched last Sunday, two days after the Budget, was a digital property platform that does not require regulatory approvals.
It is NOT the same as what YB MOF mentioned in the Budget, although it is the intention of EdgeProp to turn the FundMyHome platform that was launched into a regulated property exchange upon future SC approval, sometime in early 2019.
What is the difference?
The SC regulates investments by the public, with the aim of protecting the individual investors. Currently, FundMyHome does NOT solicit public investments, but is instead funded only by institutions.
On whether FundMyHome will really help homeowners and make homes more affordable, I am convinced it will and in the course of the weeks and months ahead, I suspect most will agree.
All innovations go through stages of perception; from “ridicule” to “debate” and finally to “ it was obvious”.
In any case, given that FundMyHome involves no public money, concessions or guarantees of any kind from the Government, and that this is just an additional possible solution over and above existing ones, what can be wrong?
For those who think they have better solutions, this launch and this innovation in no way impedes anyone else from doing and proposing what they have in mind.
To those who say the way to make homes more affordable is to produce them at a lower price, I hope you can be successful too. We all share the same objective, to help fellow Malaysians have a roof over their heads that they can afford.
In the end, there will probably be many solutions with each complementing the other.
The only real argument against FundMyHome is therefore the possible cost to the economy and society that may arise out of the implementation of this scheme.
I know there are none.
The various regulators will and must review and ensure this is to be the case before approvals are given. I too want to ensure that it does not create more problems than it solve.
I am aware many think this creates a possible subprime crisis in future. I have no space here to elaborate but I can assure you that you are dead wrong and you should go read up the topic first on the conditions under which subprime happened i.e. overbearing debts.
FundMyHome has the opposite effect – it reduces debt (bank mortgage) by using equity (investors).