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Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) announced the outcome of the ACE Market Listing Requirements (“ACE LR”) review today as part of its initiative to build a more robust and sustainable marketplace. The review extends to both the admission and post-listing obligations for the ACE Market, and has incorporated the industry and public feedback received during the market consultation conducted between 18 November 2014 and 9 January 2015 (“Public Consultation”).
Dato’ Tajuddin Atan, Chief Executive Officer of Bursa Malaysia said, “As one of the key drivers of the capital market, the Exchange is constantly looking for ways to create a more conducive environment to seed emergent companies and industries. Our ACE Market is targeted at eligible small and medium enterprises (“SME”), specifically to facilitate their need for capital raising to grow their businesses, enhance their profile and to fully realise their potential. SMEs currently contribute 33%[1] to the country’s Gross Domestic Product and by moving further up the value chain this figure is expected to increase to 41%[2] by 2020. The Exchange is cognisant of our vital role as a capital market regulator and facilitator, hence we are continuously improving the efficiency of our processes and time to market whilst maintaining market quality.”
He continued, “Bursa Malaysia certainly hopes that the enhancements to the ACE LR will incentivise and attract more eligible SMEs to consider initial public offerings (“IPOs”) on the ACE Market in their pursuit for growth. To date, there are 107 public listed corporations (“PLCs”) from various economic sectors on the ACE Market. Since August 2009, a total of RM 522.28 million was raised via IPOs on the ACE Market and a total of RM 1.85 billion via secondary fund raising activities.”
Globally, Malaysia was ranked the world's 8th most efficient to raise funds via its equity market and 13th best for regulation of securities exchanges, according to the recent World Economic Forum Global Competiveness Report 2014-15. These are global acknowledgements of Malaysia’s efficiency and regulatory oversight.
The review of the ACE Market and the enhancements to the ACE LR are part of Bursa Malaysia’s ongoing efforts to ensure the continued attractiveness and growth of a resilient marketplace in Malaysia and to provide SMEs and investors the opportunity to tap into the growth of our capital market.
The amendments will be effective from 13 July 2015. The ACE LR amendments and Questions and Answers in relation to the amendments are available on Bursa Malaysia’s website at www.bursamalaysia.com.
For immediate reference, the amendments to the ACE LR are as follows:
Greater Clarity of the Admission Criteria
(a) clarifying the admission criteria and suitability assessment to be undertaken by a sponsor with additional guidance;
(b) introducing a new pre-initial public offering consultation procedure for an ACE Market applicant, allowing the applicant to seek guidance on the admission requirements of the Exchange at an early stage;
(c) requiring an independent market research report in support of an ACE Market’s applicant’s listing application to enhance disclosures about the applicant; and
(d) clarifying the requirements applicable to an applicant seeking listing on the ACE Market via a corporate proposal which will result in a significant change in business direction or policy of a listed corporation to promote parity of regulation.
Enhanced Attractiveness and Competitiveness Platform for Listing and Investment
(a) liberalising the moratorium requirements for eligible promoters;
(b) shortening the moratorium period applicable to promoters of listed corporations which are eligible for listing on the Main Market;
(c) exempting listed corporations which have met the Main Market quantitative admission criteria from the sponsorship requirement after 1 full financial year from the date of listing on the ACE Market;
(d) pre-vetting prescribed circulars by the Exchange prior to their issuance to shareholders to ensure quality and parity in the standards of disclosure in the marketplace;
(e) liberalising the sponsorship framework by removing the requirement for sponsors to approve public documents and allowing a change of sponsors without the Exchange’s prior approval if a replacement sponsor has been found; and
(f) broadening the pool of eligible advisers to provide wider choice to a listed corporation in the appointment of an independent adviser for prescribed corporate proposals.
