KUALA LUMPUR (July 5): The Securities Commission Malaysia (SC) has issued new guidelines on offer shares by unlisted public companies (UPCs) to sophisticated investors, which will take effect on Aug 1, 2021.

In a statement, the SC said that the guidelines aim to safeguard investors’ interest in the wake of increased queries and complaints received by the SC about the offering of shares by UPCs, marketed through phone calls, seminars, video recordings via social media or unlicensed agents, to both sophisticated and non-sophisticated investors.

“The new guidelines set out the obligations for UPCs when offering shares to sophisticated investors, including the requirement for UPCs to only appoint entities licensed by the SC if any agents are engaged to market and promote their shares.

“UPCs also need to ensure that the prospective investor that they approach is a sophisticated investor. In addition, UPCs will need to print a caution statement on the cover page of any information memorandum (IM) issued to clearly state that while the IM is deposited with the SC, approval by the SC is not required for the offering or the IM. UPCs are also required to submit a post-issuance notification to the SC to facilitate the SC to monitor the funds raised and utilisation of proceeds,” the SC said.

It added that sophisticated investors are reminded to perform their own assessment in respect of share offerings as the SC does not review offerings or promotional documents issued by UPCs.

The regulator also reminded UPCs that offering shares to retail investors without a prospectus is a serious breach under the Capital Markets and Services Act 2007. A person found liable may be punished with a fine not exceeding RM10 million or imprisonment not exceeding 10 years, or both.