KUALA LUMPUR (March 31): The amendments to the LEAP Market Transfer Framework, which will facilitate eligible LEAP Market-listed corporations to graduate to the ACE Market, will take effect on April 1, said Bursa Malaysia.
Under the new LEAP Market Transfer Framework, a public listed company (PLC) must have been listed on the LEAP Market for at least two years to qualify for a transfer of listing, Bursa Malaysia said in a statement on Friday (March 31).
The exchange added that PLCs must be assessed and considered as suitable for listing on the ACE Market by a sponsor and undertake a public issue of shares on the ACE Market.
“It is also imperative for a transfer applicant to demonstrate there is a clear and transparent price discovery mechanism in place, to demonstrate the fairness and reasonableness of its issue price pursuant to its transfer to the ACE Market,” Bursa Malaysia said.
Concurrent with the application for a transfer of listing, it said a transfer applicant must apply to withdraw its listing from the LEAP Market and accord to its shareholders an exit offer, or any other alternative exit mechanism, which is equitable to them.
“A transfer applicant will only be delisted from the LEAP Market upon its successful transfer and listing on the ACE Market,” Bursa Malaysia said.
It said that the transfer applicant must retain the services of a sponsor for two full financial years following its admission to the ACE Market, or one full financial year after it has generated operating revenue, whichever is the later.
“This is to guide and advise the transfer applicant on its continuous compliance with the ACE listing requirements and other regulatory requirements post listing,” Bursa Malaysia said.
The amendments also include the introduction of a recognised approved adviser framework which will expand the pool of sponsors or advisers in the ACE Market in respect of the transfer of listings and permitted corporate exercises, the exchange said.
“The enhanced ACE listing requirements enables eligible approved advisers to play a role in the ACE Market, pursuant to the newly introduced recognised approved adviser framework.
“An approved adviser that has completed three initial listings on the LEAP Market with at least one qualified person may seek the exchange’s approval to act as a recognised approved adviser,” Bursa Malaysia said.
It said a recognised approved adviser may act as an adviser in a transfer of listing application jointly with a sponsor, for the transfer applicant which it had acted either as a listing adviser or continuing adviser on the LEAP Market.
“The recognised approved adviser may also serve as a replacement sponsor, or act as an adviser for certain prescribed corporate proposals, namely bonus issues, private placements made under a general mandate and dividend reinvestment schemes, for the transfer applicant,” Bursa Malaysia said.
“With the expansion of the pool of sponsors or advisers in the ACE Market to include the recognised approved advisers, a transfer applicant may choose to continue working with its approved adviser, or secure the services of any other existing sponsor or adviser from the ACE Market, in a cost effective and efficient manner.”
It said the expansion will propel capacity building of recognised approved advisers through the exposure and experience gained on the ACE Market.
“Subsequent expansion and progression of a recognised approved adviser’s role in the ACE Market may be considered after further assessment by the exchange on its readiness and quality of performance,” Bursa Malaysia said.
Bursa Malaysia chief regulatory officer Julian Hashim said these amendments will open up opportunities for small and medium-sized enterprises (SMEs) to have greater access to the capital market and provide a clearer roadmap for LEAP companies aiming to list on the ACE Market.
“Additionally, the recognised approved advisor framework will enhance and provide more avenues for the participation of corporate finance professionals in the Malaysian capital market,” Julian added.
Meanwhile, Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the exchange is pleased to introduce this new transfer of listing framework to increase the accessibility and attractiveness of our equities market
“The exchange will continue to pursue efforts to better serve our purpose as an important avenue for companies to raise funds. With these amendments, we look forward to a more vibrant LEAP and ACE Markets,” Muhamad Umar said.
The LEAP Market was launched on July 25, 2017 as a qualified market accessible only to sophisticated investors. Since its inception, the companies listed on the LEAP Market raised a total of approximately RM231.2 million through initial listings. As at March 29, the market capitalisation of the entire LEAP market stands at RM5.5 billion, with 48 companies listed on the LEAP Market.