The Approval Process Of Initial Public Offerings (IPOs) Of Real Estate Investment Trusts (REITs) In Malaysia
REITs seeking listing on Bursa Malaysia will require SC’s approval, under section 212 of the Capital Markets and Services Act 2007.
The Managed Investment Schemes Department (MIS), together with the Equities Department (for asset valuation and Bumiputera equity requirements) and the Islamic Capital Market Development Department (for Islamic REITs), will evaluate all applications for the establishment and listing of REITs (IPO Application). The management company of a REIT is required to be licensed, and such application must be made to the Authorisation and Licensing Department. The SC will complete its assessment of the IPO Application within three months from the receipt of a complete application, subject to all issues being satisfactorily addressed.
In evaluating the IPO Application, MIS will (i) assess the real estates that will form part of portfolio of the REIT to be listed for compliance with the Guidelines on Listed Real Estate Investment Trusts; (ii) review the trust deed to ensure that the minimum covenants stipulated in the relevant rules and regulations are incorporated; and (iii) review the prospectus to ascertain that the contents comply with the Prospectus Guidelines for Collective Investment Schemes and that the disclosures are adequate to assist investors in making informed investment decisions. Prior to the listing of the REIT, the deed and prospectus must be registered with SC.

The Equities Department will review the valuation reports of the real estates to ensure compliance with the requirements of the Asset Valuation Guidelines and the adequacy of disclosures in the valuation certificates. The Equities Department will also review the unit holding structure of the REIT for compliance with the Bumiputera equity requirement.

For Islamic REITs, the Shariah requirements relating to the IPO Application will also need to be endorsed by the Shariah Advisory Council of the SC.

Principal advisers are strongly encouraged to consult the SC prior to the submission of the IPO Application, to highlight and discuss all material issues and concerns in relation to the application. Throughout the assessment of the IPO Application, there is a vigorous internal challenge process in place to ensure thoroughness, consistency, transparency and accountability within the process.
about the SC
The Securities Commission Malaysia (SC) was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). We are a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market.

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