SC releases new IPO framework for Main Market listings

The new framework includes the introduction of a mandatory pre-submission holistic consultation between the SC and key stakeholders


THE Securities Commission Malaysia (SC) has introduced an enhanced IPO framework for the Main Market of Bursa Malaysia, effective from Jan 1, 2021.

The new framework aims to promote greater shared responsibility among key stakeholders involved in the submission of an IPO for listing on the Main Market, the SC noted in a statement yesterday.

It is also applicable for reverse takeover (RTO) submissions.

The new framework includes the introduction of a mandatory pre-submission holistic consultation between the SC and key stakeholders, including the applicant, principal advisors, lawyers, reporting accountants and valuers.

The mandatory pre-submission session will facilitate discussions of any material issues and concerns prior to IPO application submission.

The new framework will also provide for a longer exposure period of the draft prospectus until the date of registration of the prospectus, instead of the current 15-market-day exposure period.

This will enable greater public participation in providing feedback on the draft prospectus.

The approved principal advisor and qualified senior personnel regime will also be liberalised under the new framework, to allow for a larger pool of qualified professionals to be involved in IPO or RTO application submissions.

This will be balanced with specific obligations on the principal advisors, qualified professionals and other parties involved in the submission.

“Under this enhanced approach, the SC places greater emphasis on the shared responsibility among all stakeholders involved in the IPO application process,” SC chairman Datuk Syed Zaid Syed Jaffar Albar (picture) said.

“Applicants and all their advisors will play a greater role to ensure that relevant due diligence is properly conducted before the submission and that the governance standards of industry gatekeepers are maintained in order to facilitate greater efficiency in the approval process.”

To operationalise the framework, the regulator has revised the Licensing Handbook and incorporated the eligibility criteria of principal advisor and qualified person, and requirements for recognition as a recognised principal advisor.

The revised Licensing Handbook has also been updated to place greater emphasis on the need for quality of submission to the SC, especially on the requirement for intermediaries and applicants to ensure the validity, accuracy, completeness and consistency of any documents to be submitted.

The SC is also looking into reforming the regulatory framework for the ACE Market of Bursa Malaysia, which mainly houses start-ups and businesses seeking more capital, and has more relaxed listing requirements compared to the Main Market.

“Discussion is currently being held on the potential migration of the entire ACE Market framework including registration of prospectus to Bursa Malaysia in the first half of 2021.

“In this regard, the SC will be working closely with Bursa Malaysia to enhance its internal processes and resources in order for Bursa Malaysia to undertake this additional function,” the statement read.

Twelve IPOs including exchange-traded funds were listed this year up to July 21, according to Bursa Malaysia data.