Malaysia's Social Exchange Platform (SEP) explained: what it asks of your NPO, and when your own donation site is the better route

This is part 2 of a two-part guide. Part 1 maps the whole Malaysian fundraising landscape. This part explains the SEP in full, so you can decide — calmly and with the facts — whether it belongs in your fundraising plan.

Key facts

Why the SC created it

The SC's reasoning, in its own words, is that capital markets have mostly served for-profit fundraising, while there is growing interest in funding ESG and social projects run by NPOs. The SEP is meant to let NPOs reach that pool of funders through "a transparent regulatory framework that fosters trust in the fundraising activity" ^{[1, paras 1.02–1.05]}. It grew out of a six-month pilot, SEPP25, run from January to June 2025 ^[4].

In other words: it is designed to connect institutional and ESG-minded donors — corporates, foundations, impact funders — with established NPOs running measurable projects. Early corporate commitments on Impakrintas came from Zurich General Takaful Malaysia, Yayasan Waqaf Malaysia and Kumpulan Perangsang Selangor ^[3].

Who the guideline applies to — and who it doesn't

Paragraph 2.01 is short and decisive. The guideline applies to:

(a) an entity intending to operate a social exchange platform; and (b) a non-profit organisation seeking to raise funds through the social exchange platform. ^[1]

And a "social exchange platform" is defined as "an electronic platform operated by an SEP operator that facilitates fundraising by an NPO in relation to a social impact project", where an SEP operator is "an entity registered by the SC to operate an SEP" ^{[1, Chapter 4]}.

Read together, that tells you what the guideline sets out to regulate: a registered, SC-supervised operator role, and the NPOs that choose to raise money on that operator's platform. Its eligibility rules, trust account, 20% cap and reporting duties are all framed around "funds raised through the SEP".

What the guideline does not do is create a registration process for an organisation's own fundraising — its donation page, bank-in details, donation box, recurring-giving programme or gala dinner. Those keep running under the rules covered in part 1.

So the SEP isn't a new layer of red tape on everything you already do. It is a separate door, with its own rules, that you may choose to walk through for a specific project. If you're unsure how a particular product or arrangement is classified, that is a question for the SC or your advisor, not for this article.

One rule does bind every platform, registered or not: only a registered operator may call itself a "social exchange platform" or hold itself out as operating one ^{[1, para 5.02]}. So if a service describes itself that way, you can check it against the SC's register.

What an NPO must meet to raise through an SEP

The eligibility bar is deliberately high ^{[1, Chapter 14]}:

Worth noting for religious organisations: the listed categories include "promoting religious causes through the construction, improvement, purchase or maintenance of buildings for religious worship in Malaysia, and through the provision or management of related facilities and activities" ^{[1, Appendix 1, 1(f)]}. So a building fund for a temple, mosque or church can, in principle, qualify — if the organisation clears the other bars.

What raising through an SEP involves

If you are accepted, these obligations apply to the funds raised through the platform ^{[1, Chapters 14–15]}:

Before you raise

• Detailed disclosure to the operator: project objectives, measurable impact targets, sustainability and scalability, organisation chart and key people (including name, nationality, address and qualifications), conflicts of interest, the target amount with a scheduled timeline for drawdown and use of funds, and audited financial statements for the last three years [14.12–14.13].
• Project length of no more than five years [14.08].

While you raise and spend

• Operating costs capped at 20% of the amount raised through the SEP — and that 20% includes the platform's fees, legal fees and the fees for verifying your reports [14.09 and guidance].
• A segregated trust account at a licensed Malaysian financial institution for the SEP money, kept separate until the project is complete [14.10–14.11].
• Accurate, up-to-date donor records for the project [14.11(b)].
• Regular updates to donors and the operator on progress and any material change [14.23].
• Marketing that matches your disclosures, and never implies SC endorsement [14.24–14.25].

Reporting

• Quarterly utilisation-of-funds reports, within seven days of each quarter-end [14.14].
• An annual utilisation-of-funds report, within three months of year-end, audited by an external auditor registered with the Audit Oversight Board [14.15–14.16].
• A social impact report, verified by an external reviewer you appoint — annually for projects longer than a year, and within three months of completion [14.17–14.22]. Projects raising more than RM500,000 add SDG alignment and a detailed beneficiary analysis [Appendix 3].

Ongoing

• Seven-year record retention for SEP project documents [15.07].
• Immediate notification to the operator of board changes, litigation, or anything that materially affects the project [15.03].
• SC powers of direction over the NPO, including directions not to transfer funds or to remove a director [Chapter 16].

None of this is unreasonable for what the SEP is — a regulated marketplace for institutional money. But it is a real workload, and it has real costs: an AOB-registered auditor, an external impact reviewer, platform fees, and the staff time to run quarterly reporting — all of which must fit inside the 20% operating-cost cap.

Should your organisation use the SEP?

A practical way to decide:

The SEP is likely worth exploring if:

• You already meet the eligibility bar comfortably — 44(6) approval, 3+ years, 2+ full-time staff, RM100k+ annual spend.
• You have a defined, measurable project of up to five years (a clinic programme, a scholarship cohort, a building fund) rather than general operating funds.
• You want to reach corporate and institutional donors who value SC-regulated disclosure.
• You already produce audited accounts and can take on quarterly reporting and an external impact review.

Your own donation channel is likely the better primary route if:

• You raise for general operations, recurring causes or seasonal events — monthly supporters, festival offerings, prayer ceremonies, ongoing welfare funds.
• You are newer, smaller or volunteer-run, and don't yet meet the three-year, two-employee or RM100k-spending thresholds.
• Your donors are your own community — members, devotees, alumni, neighbours — who give because they know you.
• You want full control of your brand, your donor relationships, your timeline and your campaign pages.

Most organisations will do both over time: their own channel as the permanent home for their supporters, and the SEP — where it fits — for a specific flagship project aimed at institutional funders. The two are not in competition. Your own channel is where your donor relationships live; the SEP is a specialised marketplace you can visit.

Owning your channel: what you keep

When you raise through your own donation site:

• Your brand, your name, your domain. Donors give to you, on your page, and remember you.
• Your donor relationships. You hold the donor records — you can thank them, send updates, invite them back and recognise regular supporters directly.
• Your timeline. Open a campaign today. Run a fund forever. Launch a festival appeal next week. No onboarding queue.
• Your structure. Operating-cost limits are set by your constitution, your board and your promises to donors — not by a platform rule designed for a different kind of fundraising.
• Your money, directly. With your own payment gateway, donations settle into your own bank account.

What you don't escape — and shouldn't want to — are the duties that apply to all your money: accurate accounts for your registration body, correct 44(6) receipts, e-Invoicing where it applies, and honesty with donors about what their money is for. Part 1 covers those.

Borrow the SEP's best habits — without the paperwork

The SEP's disclosure list is, frankly, a good checklist for any campaign. Donors — especially after recent headlines about fund misuse — respond to the same things the SC asks for. You can adopt the spirit of it voluntarily, at your own scale:

Doing this voluntarily builds exactly the trust the SEP is designed to create — and puts you ahead of whatever the Societies Act review brings ^[5].

How DonorCARE helps you run your own channel, properly

DonorCARE is fundraising software built for Malaysian NPOs and religious organisations. It isn't a marketplace and it doesn't pool your money: it gives your organisation its own donation channel, under your own name, with the transparency and compliance habits above built into daily work.

Your own site and your own money

• A branded public site with campaign pages, news posts, FAQ and the legal pages a public site needs — on a DonorCARE subdomain or your own domain. See Webpages
• Your own CHIP payment gateway: FPX, cards, DuitNow QR and e-wallets, settling directly into your own bank account. Register a CHIP account · Connect it · See Payments
• Campaigns for every kind of giving — an ongoing fund, a target, a deadline, or a ceremony — with preset amounts, minimum and maximum gifts, and recurring card giving. (Choose a campaign type)

Transparency donors can see

• Target and progress on campaigns with a fundraising goal.
• Campaign updates that show donors what their giving achieved — the "regular updates" habit, built in.
• Receipt verification — every receipt has a link anyone can open to confirm it's genuine, read live from your records.
• Badges and recognition walls to thank your regular supporters.

Compliance that runs in the background

• Automatic, sequential receipts for every completed donation — numbers never reused. Tax-deductible receipts are only issued once your 44(6) status is recorded as Approved (how), in a template you control.
• LHDN e-Invoicing — individual e-Invoices on request, monthly consolidated submissions for the rest, and a compliance dashboard. (Details)
• One ledger for every channel — online gifts arrive automatically; cash, cheques and bank-ins are recorded alongside them.

Fund-use reporting your board and auditor will thank you for

• Bank reconciliation and month close, so figures stop moving once signed off.
• Board reports — Fundraising Summary, Compliance Report, Donor Overview and Financial Summary — generated for any period.
• Exports for your auditor, and a ready-made SQL Accounting import. See Reporting

Governance you can show a committee

• Roles and permissions so each volunteer sees only what they need.
• Second-person approval before a donation can be voided.
• A full audit trail of who changed what, and when.

Relationships that stay yours

• A donor database with giving history and tax profiles, audiences and email campaigns to keep supporters close.
• For temples and dharma centres: offerings, ceremonies and memorial tablets, handled end to end.

If you later take a flagship project to the SEP, the habits and records you've built on DonorCARE — audited-ready books, campaign-level reporting, a track record of updates — are exactly what an operator will want to see.

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