Malaysian Regulator has Updated Equity Guidelines

Securities Commission (SC), Malaysia has updated Guidelines on the Offering of Equity and Equity-linked Securities in Malaysia.

The Equity Guidelines, which supersedes the Guidelines on the Offering of Equity and Equity-linked Securities issued on 1 February 2008 by the SC, is issued under section 377 of the Capital Markets and Services Act 2007 (CMSA) and applied by the SC in considering the following proposals under section 212 of the CMSA:

(a) Issues and offerings of equity securities;
(b) Listings of corporations and quotations of securities on the main market of Bursa Malaysia Securities Bhd (Bursa Securities) (Main Market); and
(c) Proposals which result in a significant change in the business direction or policy of corporations listed on the Main Market.

More specifically these guidelines are generally applicable to body corporates whether they are incorporated in Malaysia or outside Malaysia. However, these guidelines, do not apply to proposals undertaken by corporations seeking listing or listed on the alternative market of Bursa Securities (ACE Market) (except for a proposed transfer of listing from the ACE Market to the Main Market).

General principles

These guidelines are formulated to ensure a fair and consistent application of policies. The requirements set out in these guidelines represent the minimum standards that have to be met by applicants embarking on proposals. Accordingly, applicants must observe the spirit and the wording of these guidelines.

The principles on which these guidelines are based embrace the interests of listed corporations, the provision of investor protection and maintenance of investor confidence, as well as the need to protect the reputation and integrity of the capital market. The principles include the following:

(a) Issuers must be suitable for listing and have minimum standards of quality, size, operations, and management experience and expertise;
(b) Issuers and their advisers must make timely disclosure of material information and ensure the accuracy and completeness of such information to enable investors to make an informed assessment of the issuer, the proposals and the securities being offered;
(c) Issuers and their directors, officers and advisers must maintain the highest standards of corporate governance, integrity, accountability and responsibility;
(d) Directors of an issuer must act in the interests of shareholders as a whole, particularly where a related party has material interest in a transaction entered into by the issuer;
(e) All holders of securities must be treated fairly and equitably and must be consulted on matters of significance; and
(f) Proposals undertaken by issuers must not undermine public interests.

In circumstances not explicitly covered, in making its decision, the SC will have regard to the general principles outlined in the Guidelines where applicable for specific proposals submitted for the SC’s consideration.