Kuala Lumpur Stock Exchange: Practice Notes To New Listing Requirements

Kuala Lumpur Stock Exchange (KLSE) is issuing several Practice Notes to aid industry in complying with the new Listing Requirements. The new Listing Requirements, announced in January this year, is a major effort by KLSE to further strengthen the capital market and securities industry in Malaysia.

KLSE Executive Chairman, Dato' Mohd Azlan Hashim, said the main objective of the Practice Notes is to promote better understanding of the new Listing Requirements amongst public listed companies, directors, advisers and other industry participants to facilitate consistent application of the new Listing Requirements.

"These Practice Notes also seek to address concerns and clarify issues raised by industry participants during KLSE's roadshows conducted recently, throughout the country, to explain the Listing Requirements", he said.,p> The following Practice Notes are issued pursuant to the Listing Requirements:

• Practice Note No 10/2001 on Level of Operations;
• Practice Note No 11/2001 on Provision of Financial Assistance; and
• Practice Note No 12/2001 on Recurrent Related Party Transactions of a Revenue Nature.

Mohd Azlan said the Practice Note relating to level of operations is of particular significance as it seeks to preserve the quality of companies listed on the KLSE. "Practice Note No 10/2001 on Level of Operations contains a comprehensive plan to address the issue of listed companies with inadequate level of operations. The framework set out under the Practice Note should encourage such companies to regularise their condition expeditiously."

"At the same time, the Practice Note prescribes greater disclosure of information to the market, on the progress of restructuring efforts. All these requirements serve to keep investors informed on a timely basis, whilst promoting the attractiveness of KLSE as a choice investment destination."

The Practice Note No 12/2001 on Recurrent Related Party Transactions of a Revenue Nature seeks to provide listed companies with an avenue to proceed expeditiously with such recurrent transactions entered into in the ordinary course of business. It also seeks to protect the interests of other shareholders by requiring a mandate from shareholders.

Several existing Practice Notes issued under the previous Listing Requirements will also be repealed with effect from 1 June 2001, and re-issued under the new Listing Requirements.

"In developing new rules and regulations, KLSE takes into account the need to balance regulation with business efficacy. Hence, the Practice Notes issued have been drafted to achieve this balance," he said.