Thursday 28 Mar 2024
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KUALA LUMPUR (April 28): The Securities Commission Malaysia (SC) will allow businesses to lodge directly with the SC the issuance of their convertible notes to venture capital (VC) and private equity (PE) firms to lower the fundraising cost and expedite the process.

In a statement today, the SC said the flexibility will allow businesses to lodge the issuance of their convertible notes directly with the SC without requiring the services of a principal adviser. 

"Lodgement fees will also be waived, further lowering the fundraising cost. This would particularly benefit start-ups, micro, small and medium enterprises (MSMEs) as well as small and mid-cap companies, allowing the fundraising process to be more cost-effective and reduce time to market.

"There are currently 124 VC and PE firms that are registered with the SC, managing an estimated total commitment of RM6 billion,” the regulator said.

SC chairman Datuk Syed Zaid Albar said in the statement that the SC continues to explore measures to ensure that the capital markets remain accessible, particularly for MSMEs.

"This initiative is part of a series of flexibilities introduced to meet the funding needs required to weather the current situation, as well as to prepare businesses for recovery beyond this crisis,” Syed Zaid said.

According to the SC’s statement, the issuance of the convertible notes will be facilitated through new requirements in the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework. These new provisions will outline the criteria for eligible convertible notes, it said.

The SC said this includes requirements for these convertible notes to be issued to and transferable only between VC and PE firms registered with the SC. 

"The lodgement process has also been simplified via electronic submission of the required information via email. These flexibilities will also be provided for Islamic convertible notes, but will be operationalised at a later date,” it said.

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