Malaysia Introduces Enhanced IPO Framework for Main Market

Source: Regulation Asia Editors, Regulation Asia 2020-07-22

The new framework will introduce a mandatory holistic consultation process, a longer exposure period for the draft prospectus, and a more liberal principal adviser regime.

Malaysia’s SC (Securities Commission) has announced enhancements to its IPO framework, as part of efforts to promote greater shared responsibility among key stakeholders involved in the application process for listing on Bursa Malaysia’s Main Market.

“Applicants and all their advisers will play a greater role to ensure that relevant due diligence is properly conducted before the submission and that the governance standards of industry gatekeepers are maintained in order to facilitate greater efficiency in the approval process,” said SC chairman Datuk Syed Zaid Albar.

The new framework, which is also applicable for Reverse Takeover (RTO) submissions, will take effect on 1 January 2021.

One of the key features of the new framework is the introduction of a mandatory pre-submission holistic consultation between the SC and key stakeholders, including the applicant, principal advisers, lawyers, reporting accountants and valuers. This is aimed at facilitating the discussion of any material issues and concerns prior to the submission of an IPO application, the SC says.

The new framework will also provide for a longer exposure period of the draft prospectus until its date of registration, to promote greater public participation in providing feedback. Currently there is a 15-market-day exposure period.

The approved principal adviser and qualified senior personnel regime will also be liberalised under the new framework, to allow for a larger pool of qualified professionals to be involved in IPO or RTO applications. This will be balanced with specific obligations on the principal advisers, the qualified professionals and other parties involved in applications submitted, the SC says.

To operationalise the framework, the SC has revised the licensing handbook, incorporating the eligibility criteria of principal advisers and qualified persons and requirements for recognition as a recognised principal adviser.

The revised licensing handbook is also updated to place greater emphasis on the need for quality in submissions to the SC, obliging intermediaries and applicants to ensure the validity, accuracy, completeness and consistency of any documents submitted.

The SC is also looking to reform the regulatory framework for the ACE Market, potentially by migrating of the entire framework to Bursa Malaysia in the first half of 2021.

Malaysia Introduces Enhanced IPO Framework for Main Market

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