SC’s Guidance On Virtual General Meetings
May 12, 2020
Recently, the Securities Commission Malaysia (SC) issued the “Guidance and FAQs on the Conduct of General Meetings for Listed Issuers” (Guidance Note). The Guidance Note guides issuers listed on Bursa Malaysia Securities Bhd (Bursa Securities) on how to conduct fully virtual or hybrid general meetings including annual general meetings and extraordinary general meetings. While fully virtual general meetings can be conducted during and outside the Movement Control Order (MCO) period, hybrid general meetings can only be conducted outside the MCO period.
“Listed issuer” under the Main Market Listing Requirements by Bursa Securities include a listed corporation, listed Real Estate Investment Trust (REITs) and Exchange-Traded Funds (ETFs).
Section 327 of Companies Act 2016 (CA) allows for the use of technology to conduct online general meetings unless the listed corporation’s constitution requires the general meeting to be organised at a physical venue. In the case of REITs and ETFs, the Guidelines on Listed REITs and Guidelines on ETFs respectively do not prescribe the manner in which a general meeting must be organised. Unless the general meeting is required to be organised at a physical venue pursuant to the trust deed of the REIT or ETF, a management company can conduct the REIT or ETF’s general meeting online.
The SC specifies that in addition to the requirements under Section 327 (in the case of listed corporations) and the various SC guidelines (in the case of REITs and ETFs), a listed issuer should also:
(a) Fully Virtual General Meetings
Ensure there is reliable infrastructure to enable the conduct of a fully virtual general meeting including enabling members to exercise their rights to speak and vote at the meeting.
Provide guidance to shareholders/unit holders on the requirements and method of participating in the general meeting using the selected platform.
Identify a broadcast venue.
Ensure only up to 8 essential individuals are physically present at the broadcast venue and social distancing precautionary measures are practiced.
Only eligible members are allowed to participate in the meeting.
The SC has encouraged the meetings to be conducted with the fewest possible number of the essential individuals physically present at the broadcast venue. In any event, the 8 essential individuals are:
Chairperson of the general meeting
Chief Executive Officer
Chief Financial Officer
Company secretary
Auditor
Scrutineer
Persons providing audio and visual support
(b) Hybrid General Meetings
Ensure there is reliable infrastructure to enable the conduct of a hybrid general meeting including enabling members to exercise their rights to speak and vote at the meeting.
Provide guidance is given to shareholders/unit holders on the requirements and method of participating in the general meeting using the selected platform.
Identify the physical meeting venue.
Ensure that only members who are eligible can attend and participate in the meeting.
Observe any directive and/or protocol on gatherings as prescribed by the Government from time to time.
Quorum And Voting The quorum shall be at least 2 members (personally participating in the meeting or by proxy, pursuant to Section 328(2) of the CA) subject to the listed issuer’s constitution. As for REITs and ETFs, management companies must comply with the Guidelines on Listed REITs and the Guidelines on ETFs respectively.
The quorum of the meeting can be determined as follows:
Fully virtual general meetings: The number of members logged-in at the start of the meeting
Hybrid general meetings: The aggregate of the number of physical attendees at the meeting and members logged-in at the start of the meeting.
Members must be able to cast their votes in time (live) during the proceeding of the general meeting. Should a member have no internet access, he may cast a vote via proxy forms appointing the Chairperson of the meeting to vote on the member’s behalf. The proxy forms should be submitted within the stipulated time and through a manner as determined by the listed issuer. A scrutineer must also ensure that the votes cast are validated accordingly.
Conclusion
Although the MCO may end on 12 May 2020, the Guidance Note will continue to apply and when circumstances allow, the MCO and COVID-19 related guidance in the Guidance Notes will be removed. For the time being, the SC encourages listed issuers to continue leveraging on technology in conducting their general meetings and communicating with shareholders/ unit holders even beyond the MCO period.