Requirements for Main Market Listing: Bursa Malaysia

This is a brief introduction to the unified board of both Main Board and Second Board companies under the Main Market.

There is a need for Malaysia to enhance its competitiveness and to strengthen its position as a conducive capital raising destination. Addressing this issue, Securities Commission (“SC”) collaborated with Bursa Malaysia (“Bursa”) to review the listings and equity-raising framework. This enhancement entails the merging of the current Main Board and Second Board into a single board of established corporations. Effective 3 August 2009, this merged market of Main and Second Boards will be known as the Main Market, hence the listing of both Boards.

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Under the enhanced framework, changes will be made to the Capital Markets and Services Act 2007 (“CMSA”) and the regulatory functions of both SC and Bursa will be streamlined, such as:-

  1. SC’s approval is required only for initial public offerings, reverse takeover, back-door listings, secondary listings, cross listings and transfer of listings. This allows SC to continue to function as the gate-keeper to safeguard investor’s interests;
  2. Secondary fund raising exercises such as rights issues, placements and issuing of securities that do not change the core business of the listed companies shall require Bursa’s approval. SC’s approval is no longer required.

The main purpose of this enhanced framework with its streamlined processes and rules is to bring greater certainty, shorter time-to-market and lower regulatory costs.

Effective 3 August 2009, a listed issuer who carried out secondary issuance of securities is required to submit the listing application to Bursa. However, where an issuance of securities creates a significant change in the business direction or policy of the listed issuer, SC’s approval is required before submitting the application to Bursa.

In order for a smooth transition to the Main Market Listing Requirement (“MMLR”), compliance with some of the existing Listing Requirements (“LR”) is modified as follows:-

  1. LR states that a listed issuer must ensure that the public shareholding spread is at least 25% of its total shares issued. However, compliance with at least 1,000 public shareholders holding not less than 100 shares each is waived with immediate effect. Further, there is no need for application for extension of time for this waiver.
  2. Existing PN16 and PN17 companies must continue to comply with its obligations under the LR. However, they may apply to Bursa to regularize their conditions under the MMLR, provided that they are still within the stipulated or extended timeframe granted by Bursa.

Further to the above, a listed issuer must submit a valuation report to Bursa under the following circumstances:-

Where a transaction involving an acquisition or disposal of any real estate as follows:-

  • For non-related party transaction, any one of the percentage ratios is 25% or more;
  • For related party transaction, any one of the percentage ratios is 5% or more.

Irrespective of whether the consideration is satisfied by way of cash or issuance of securities; and when the listed issuer makes a two-call rights issue or bonus issue of securities by capitalizing the reserves arising from the revaluation of assets.

The valuation report must be submitted to Bursa together with any:-

  • Circular to Bursa or its shareholders for the relevant transaction or proposal; or
  • Additional listing applications where the transaction or proposal involves a new issue of securities.

The above valuation report applied to those applications submitted to Bursa on or after 3 August 2009. This is regardless of the date the listed issuer announces the transaction or proposal.

For avoidance of doubt, under the MMLR, if the valuation report is required to be submitted to SC, the listed issuer need not submit the valuation report to Bursa.

Find out more about Initial Public Offering (IPO) in Malaysia:

  1. Introduction to IPO
  2. General Requirements for IPO
  3. Advantages & Challenges on the IPO exercise
  4. Preparing for a Successful IPO