New SC measures to facilitate cross border listings – promote linkages with other markets and listings of foreign corporations in Malaysia

The Securities Commission (SC) today announced new measures to facilitate the listing in Malaysia of foreign-owned corporations having operations abroad as well as secondary listings on foreign stock exchanges of Main Board-listed Malaysian companies.

These latest measures are pursuant to the announcement by YAB Dato’ Seri Abdullah bin Haji Ahmad Badawi, Prime Minister and Minister of Finance at the Invest Malaysia 2006 Conference earlier this year to improve the value proposition of the Malaysian capital market.

Under these measures, large foreign-owned corporations having operations outside Malaysia can now seek primary or secondary listings on the Main Board of Bursa Malaysia Securities Berhad (Bursa Malaysia).

“The liberalisation would enhance diversity of offerings and would promote cross-border linkages with other markets through dual-listings. Hence, we welcome large and profitable foreign-owned corporations from jurisdictions having comparable laws with Malaysia to list on Bursa Malaysia,” said SC Chairman Dato’ Zarinah Anwar.

Eligible Malaysian-owned corporations with foreign-based operations are now given the flexibility to seek listing without having to comply with the minimum ownership period as previously required.

“Not only would this relaxation encourage more Malaysian-owned corporations which are successful overseas to seek listing back home, it would also support cross-border mergers and acquisitions by domestic companies and investors,” said Dato’ Zarinah.

In addition, healthy Malaysian companies listed on the Main Board of Bursa Malaysia can seek secondary listings on foreign stock exchanges which are members of the World Federation of Exchanges with a view to attaining international recognition.

Dato’ Zarinah adds, “We envisage that the liberalisation would heighten the integration of Malaysian capital market internationally and expand the pool of high quality stocks on Bursa Malaysia and the range of investment opportunities for investors”.

The new policies which will come into effect today are embodied in the following Guidance Notes, issued under the Policies and Guidelines on Issue/Offer of Securities (Issues Guidelines):

  • Guidance Note 7D – Requirements on primary and secondary listings of foreign corporations (replacing existing Guidance Note 7A);
  • Guidance Note 7E – Requirements on primary listing of corporations with predominantly foreign-based operations (replacing existing Guidance Note 7B); and
  • Guidance Note 7F – Requirements on secondary listings of Malaysian listed companies on foreign stock exchanges.

The SC also announced the release of Guidance Note 6E, issued under the Issues Guidelines to enhance the requirements on listing for domestic companies under the market capitalisation test. Under the new requirements, domestic companies must have market capitalisation of at least RM500 million and after-tax profit of RM30 million for the latest financial year to be able to seek listing under the market capitalisation test.

The Guidance Notes and the Policies and Guidelines on Issue/Offer of Securities are available here.