KUALA LUMPUR (July 23): Bursa Malaysia Bhd has issued a consultation paper seeking public feedback on its proposed amendments to the Main Market and ACE Market Listing Requirements (LR) to codify policy considerations for the acceptance of a lower public holding spread, with the criteria set to be premised on companies’ market capitalisation (market cap).

“While the LR currently prescribes that a listed issuer must have at least 25% of listed shares/units in the hands of the public, the exchange recognises that there are circumstances which may warrant a lower public spread, without compromising the maintenance of a fair and orderly market. The exchange has accepted a lower public spread, ranging between 15% and 25%, by modifying the LR for some large listed issuers, provided that such lower percentage is sufficient for a liquid market.

“In this review, the exchange proposes to codify, among others, the policy considerations for the acceptance of a lower public spread,” Bursa said in a statement.

Based on its proposed objective criteria that is premised on market capitalisation threshold, companies must have at least RM1 billion but less than RM3 billion market capitalisation to be considered for a minimum acceptable lower public spread of 20%. Bursa may accept a minimum acceptable lower public spread of 15% for companies with a market cap of RM3 billion and more.

Additionally, the exchange said it will take into consideration other subjective criteria such as sufficiency of liquidity, the orderliness of trading of the securities, corporate governance conduct and compliance records of the listed issuer/applicant and its directors, as well as the justification necessitating the lower public spread.

Bursa Malaysia said the proposed amendments are aimed to enhance transparency and provide regulatory clarity and certainty on the policy relating to the acceptance of a lower public spread. It is also part of the exchange’s regular review of the LR to ensure that its rules remain relevant, are able to address new developments in the market, and are consistent with international best practices.

The consultation paper on the above proposed amendments to the LR is available at www.bursamalaysia.com, and Bursa welcomes views from the public. Interested parties are invited to submit their comments by Aug 21, 2020.