KUALA LUMPUR (Feb 23): Bursa Malaysia Bhd said today the exchange operator and regulator will consider listed companies' applications for lower public shareholding spreads at between 15% and 20% following a review of the bourse's Main Market and ACE Market listing requirements to reflect, among others, policy considerations for the acceptance of lower public spreads in these companies.
In a statement today, Bursa said that under the current listing requirements, a listed issuer must have at least 25% of its shares in the hands of the public. Bursa said it will consider applications for a lower public shareholding spread based on a balanced assessment, comprising quantitative and qualitative criteria including the market capitalisation of listed companies.
Bursa said that for companies with a market capitalisation of at least RM1 billion but less than RM3 billion, the acceptable minimum lower public shareholding spread is 20%.
For companies with a market capitalisation of RM3 billion and above, the acceptable minimum lower public shareholding spread is 15%, according to Bursa.
Bursa said that under its public spread amendments, which will take effect from Monday (March 1, 2021), the quantitative and qualitative criteria include "the appropriateness and rationale of the application, including if there is sufficiency of liquidity, orderliness of trading of the securities, good corporate governance conduct and compliance records of the listed issuer/applicant and its directors, as well as reasonable justification necessitating the lower public spread".
According to Bursa, maintaining an appropriate level of public security holding spread is essential to providing sufficient liquidity in the market.
"The public spread amendments will promote greater transparency, as well as regulatory clarity and certainty on the policy considerations by the exchange in accepting a lower public spread.
"Notwithstanding the above, eligible listed issuers, and those granted with a lower public spread are strongly encouraged to maintain at least 25% public spread to promote wider participation of investors and a more liquid market," Bursa said.