Bursa's Merged Boards To Take Effect Aug 3.

KUALA LUMPUR: Bursa Malaysia’s new board structure is expected to position the local bourse as a competitive capital-raising destination for both local and foreign companies when it comes into effect on Aug 3.

Bursa Malaysia's current Main and Second Boards will be streamlined into a single unified board to be called "Main Market" and the revamped Mesdaq, which will cater companies from all sectors, will be known as "ACE Market".

Securities Commission chairman Datuk Seri Zarinah Anwar said on May 8 the reforms are part of the new fund-raising framework to create an efficient access to capital and investments and transform Bursa Malaysia into a more attractive platform and foreign companies.

Along with the new structure, there is also a significant shift in the regulatory approach with regards to listings and equity fund-raisings. “This new approach to regulation recognises a new environment in terms of diversity of investors, issuers and instruments, and is premised on stronger regulatory capabilities with more diligent surveillance of the market and greater reliance on enforcement.

“It is not about light touch regulation,” she said at the launch of the new fund-raising framework and board structure of Bursa Malaysia. She said to give effect to the new regulatory approach, the SC had released five guidelines on equity, principal adviser, prospectus, asset valuation and structured warrants.

Zarinah said all the guidelines would take effect on August 3, 2009 except for the Structured Warrants Guidelines, which will be effective immediately. She said under the new Equity Guidelines, companies seeking listing under the profit track record test must have an uninterrupted aggregate net profit of at least RM20 million over the past three to five years, with a minimum net profit of RM6 million prior to listing.

However, applicants wishing to list under the market capitalisation test must have a minimum market capitalisation of RM500 million, with no prescribed minimum profit requirement, she added. Zarinah said various flexibilities will also be introduced under the new Equity Guidelines, including the removal of the need for minimum issued and paid-up capital.

She said the Equity Guidelines would include a framework for the listing of Special Purpose Acquisition Companies (SPACs). SPACs are companies with no operations that go public with the intention of merging with or acquiring operating companies or businesses with the proceeds of their IPO.

She said under the new framework, the approval time for listing by SC will be reduced from the current minimum of 74 working days to 60 days. “The SC recognises the need for the corporate sector to have quick access to capital. Hence, enhancing efficiency and shortening the time-to-market have always been a priority for us, but without compromising investor protection,” she added.

Zarinah said under the new framework, the SC's approval under section 212 of the Capital Market and Services Act will only be required for Initial Public Offerings, secondary listings and cross listings and transfer of listings from ACE market to Main Market.