Enhanced IPO Framework For Bursa Malaysia Main Market
July 23, 2020
On 21 July 2020, the Securities Commission Malaysia (SC) introduced an enhanced initial public offering (IPO) framework which will take effect on 1 January 2021 (Effective Date). According to the SC, this enhanced IPO framework is targeted at promoting greater shared responsibility among the key stakeholders involved (including the applicant, principal advisers, lawyers, reporting accountants and valuers) in the submission of an IPO for listing on the Main Market of Bursa Malaysia.
This enhanced IPO framework is implemented through the introduction of a new Guidelines on Submission of Corporate and Capital Market Product Proposals (Guidelines) and a new Chapter 7A of the Licensing Handbook (Chapter 7A). Upon the Guidelines coming into effect, it will replace the Principal Adviser Guidelines (PA Guidelines) and the Guidelines on Due Diligence Conduct for Corporate Proposals.
• Mandatory pre-submission consultation According to the SC, under this new framework, there will be a mandatory pre-submission consultation conducted between the SC and key stakeholders prior to the submission of an IPO application. This is to enable discussions of any material issues and concerns that the parties may have prior to such submission.
• New Recognised Principal Adviser Regime (RPA Regime) SC has said that this new RPA Regime is to liberalise the industry and allow for a greater pool of qualified professionals to take part in the submission of IPO applications to the SC. Key differences between the current regime and the new RPA regime for submission of specific proposals (including IPO applications) as summarised by the SC are as follows:
• Longer exposure period of draft prospectus Currently, the draft prospectus is subject to a 15 market day exposure period for public feedback. Under the new framework, this period will be extended until the date of registration of the prospectus which will enable greater public participation in providing any feedback they have on the draft prospectus.
Matters For Existing Approved PA And QSP
The SC has stated that all existing Approved PA and QSP would not be automatically recognised under the new enhanced IPO framework. Hence, the current Approved PA will have to submit an application for recognition to the SC enclosing the information and documents required in Chapter 7A of the Licensing Handbook. Further, all such applications must be made no later than one month prior to the Effective Date. This is so that the SC can make available the register of RPA on the SC’s website from the Effective Date.
The SC has also mentioned that they are looking to reform the regulatory framework for the ACE Market. Specifically, they are currently discussing on potentially migrating the entire ACE market framework including registration of prospectus to Bursa Malaysia in the first half of 2021.