SC introduces enhanced IPO framework, to take effect in January 2021

-A +A

KUALA LUMPUR (July 21): The Securities Commission Malaysia (SC) is introducing an enhanced initial public offering (IPO) framework which will take effect on Jan 1, 2021.

The enhanced framework, which is also applicable for Reverse Takeover (RTO) submissions, is to promote greater shared responsibility among key stakeholders involved in the submission of an IPO for listing on the Main Market of Bursa Malaysia, the capital markets regulator said in a statement today.

One of the key features of the new framework is the introduction of a mandatory pre-submission holistic consultation between the SC and key stakeholders including the applicant, principal advisers, lawyers, reporting accountants and valuers.

This mandatory pre-submission session will facilitate discussions of any material issues and concerns prior to the submission of IPO application, the SC said.

The new framework will also provide for a longer exposure period of the draft prospectus until the date of registration of the prospectus, instead of the current 15-market-day exposure period, the SC said. This will enable greater public participation in providing feedback on the draft prospectus.

“Under this enhanced approach, the SC places greater emphasis on the shared responsibility among all stakeholders involved in the IPO application process. Applicants and all their advisers will play a greater role to ensure that relevant due diligence is properly conducted before the submission and that the governance standards of industry gatekeepers are maintained in order to facilitate greater efficiency in the approval process,” said SC chairman Datuk Syed Zaid Albar.

The approved principal adviser and qualified senior personnel regime will also be liberalised under the new framework, the SC added, to allow for a larger pool of qualified professionals to be involved in the submission of IPO or RTO applications to the SC.

To operationalise the framework, the SC said it has revised the Licensing Handbook and incorporated the eligibility criteria of Principal Adviser and Qualified Person and requirements for recognition as a Recognised Principal Adviser.

The revised Licensing Handbook has also been updated to place greater emphasis on the need for quality of submission to the SC, especially on the need for intermediaries and applicants to ensure the validity, accuracy, completeness and consistency of any documents to be submitted to the SC.

Meanwhile, the SC is also looking into reforming the regulatory framework for the ACE Market. It said discussions are currently being held on the potential migration of the entire ACE market framework, including registration of prospectus, to Bursa Malaysia in the first half of 2021.

“In this regard, the SC will be working closely with Bursa to enhance its internal processes and resources in order for Bursa Malaysia to undertake this additional function,” it added.