Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) today issued a consultation paper seeking public feedback on the proposed amendments to the Main Market and ACE Market Listing Requirements (collectively “LR”) in relation to the public security holding spread.
While the LR currently prescribes that a listed issuer must have at least 25% of listed shares/units in the hands of the public, the Exchange recognises that there are circumstances which may warrant a lower public spread without compromising the maintenance of a fair and orderly market. The Exchange has accepted a lower public spread, ranging between 15% and 25%, by modifying the LR for some large listed issuers, provided that such lower percentage is sufficient for a liquid market.
In this review, the Exchange proposes to codify, among others, the policy considerations for the acceptance of a lower public spread. In respect of the proposed objective criteria, they are premised on a market capitalisation threshold of:
- at least RM1 billion but less than RM3 billion, for a minimum acceptable lower public spread of 20%; and
- at least RM3 billion, for a minimum acceptable lower public spread of 15%.
Additionally, the Exchange will take into consideration other subjective criteria, such as sufficiency of liquidity, the orderliness of trading of the securities, corporate governance conduct and compliance records of the listed issuer/applicant and its directors, as well as the justification necessitating the lower public spread.
The proposed amendments to the LR aim to enhance transparency and provide regulatory clarity and certainty on the policy relating to the acceptance of a lower public spread. It is also part of the Exchange’s regular review of the LR to ensure that its rules remain relevant, are able to address new developments in the market, and are consistent with international best practices.
The consultation paper on the above proposed amendments to the LR is available at www.bursamalaysia.com, and the Exchange welcomes views from the public. Interested parties are invited to submit their comments and feedback to Bursa Malaysia by 21 August 2020.
