ASEAN Regulators Implement Cross Border Securities Offering Standards

1 April 2013... The ASEAN Capital Markets Forum (ACMF) announced today that the securities regulators in Malaysia, Singapore and Thailand have implemented the ASEAN Disclosure Standards Scheme (Scheme) for multi - jurisdiction offerings of equity and plain debt securities in ASEAN. 

 

The Scheme aims to facilitate fund raising activities as well as to enhance the investment opportunities with in ASEAN capital markets.

 

Issuers offering equity and plain debt securities in multiple jurisdictions within ASEAN will only need to comply with one single set of disclosure standards for prospectuses, known as the ASEAN Disclosure Standards , bringing about greater efficiency and cost savings to issuers. 

 

The Scheme operates on an opt-in basis and ASEAN members will adopt the Scheme as and when they are ready to do so. Malaysia, Singapore and Thailand are the first three ASEAN jurisdictions to implement the Scheme.

 

The Scheme replaces the ASEAN and Plus Standards Scheme that was announced on 12 June 2009 and is one of the capital market initiatives undertaken by the ACMF as part of the regional capital market integration plan endorsed by the ASEAN Finance Ministers in April

2009 in Pattaya, Thailand. 

 

Mr. Lee Chuan Teck, Chairman of the ACMF and Assistant Managing Director of the Monetary Authority of Singapore, said “The implementation of the Scheme is another significant achievement in the ACMF’s continuing efforts to foster ASEAN capital market integration. With the Scheme in place, issuers will only need to prepare one set of prospectus for a multi-jurisdiction offering in the region. The ACMF hopes that this will encourage more companies to offer securities across ASEAN and help promote ASEAN as integrated capital market for fund-raising.”

 

“The initiative represents a significant milestone towards creating a more efficient environment for access to capital across the region, and is a key initiative by ASEAN capital market regulators to promote greater cross-border investment flows and grow the region’s capital markets. The fully harmonised disclosure standards will allow issuers more seamless access to financing opportunities within the region while facilitating investors’ decision making in multi-jurisdiction offerings,” said Ranjit Ajit Singh, Chairman of the Securities Commission Malaysia. 

 

“I am proud of this achievement. The arrival of the fully harmonized set of disclosure standards simply proved that ACMF is determined to make fund raising process most efficient for companies looking to expand their businesses. It creates more opportunity for ASEAN to channel our savings to promote growth of our own region. I hope that, in the near future, more ASEAN securities regulators will join Malaysia, Singapore and Thailand in adopting the ASEAN Disclosure Standards, yet enlarging the impact of this Scheme.” said Mr Vorapol Socatiyanurak, Secretary-General, the Securities and Exchange Commission, Thailand.

 

Further information on the Scheme is available in Appendix I. Details on the implementation of the Scheme can be found on the websites of the Securities Commission Malaysia ( www.sc.com.my), the Monetary Authority of Singapore (www.mas.gov.sg) and the Securities and Exchange Commission, Thailand (www.sec.or.th).

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.

Malaysia's New Corporate Governance Code Puts Strong Emphasis on Board Effectiveness

The Securities Commission Malaysia (SC) released the Malaysian Code on Corporate Governance (CG) 2012 (MCCG 2012) as the first major deliverable of the Corporate Governance Blueprint 2011 (Blueprint) launched in July last year.

Aimed at enhancing board effectiveness of listed companies through strengthening board composition, reinforcing the independence of directors and fostering commitment of directors, the new code will supercede the Malaysian Code on Corporate Governance 2007.

"In essence, the Malaysian Code on Corporate Governance 2012 and the Blueprint seek to embed a culture of good corporate governance, addressing the key components of the corporate governance ecosystem to strengthen self and market discipline. Boards and shareholders must embrace the fact that good business is not just about achieving the desired financial bottom line by being competitive. It is equally about creating shareholder value, which can only be sustained by well-informed strategic direction and engaged oversight, which stretch beyond short-term financial performance," said Tan Sri Zarinah Anwar, Chairman of the SC.

The new CG code sets out eight broad principles and specifies the best practices of good corporate governance at a higher level than that expected by regulations. Each principle is followed by a series of recommendations, which include the formalisation of a board charter, capping of the tenure of independent directors to nine years and the separation of chairman and CEO roles. It also elaborates on the need for boards to recognise and manage risks and for companies to encourage shareholder participation.

To support and enhance the capacity of directors to fulfil the demands of their role, the new code puts greater emphasis on the role of the Nominating Committee, chaired by a senior independent director, in relation to the recruitment, assessment, and training needs of directors.

"Good corporate governance cannot be achieved merely on the strength of regulations. Directors have a duty not just in setting strategic direction and overseeing the conduct of business in compliance with laws, they should also be effective stewards and guardians of the company in respect of ethical values, and ensuring an effective governance structure for the appropriate management of risks and level of internal controls," added Tan Sri Zarinah.

The MCCG 2012 will be effective on 31 December 2012 although listed companies are encouraged to make an early transition to the principles and recommendations elaborated in this new code.

The new CG code, as well as a set of FAQs, is available at the SC website at www.sc.com.my