The Securities Commission (SC) today introduced a set of enhanced guidelines aimed to promote greater protection for shareholders and investors as part of its continued efforts to further develop a facilitative regulatory framework for fund raising.
Guidance Notes 6D, 8C and 12C will come into effect today, replacing existing provisions in the Policies and Guidelines on Issue/Offer of Securities (Issues Guidelines).
Under the enhanced guidelines, issuers intending to undertake Placements under General Mandate are now required to comply with various requirements related to the following areas:
- Size of issuance of securities, i.e. up to 10% of the nominal value of the issued and paid-up capital of the issuer;
- Pricing of securities issued pursuant to the placement;
- Types of placees; and
- Role of advisers as placement agents in ensuring compliance.
Placements of securities that depart from the requirements stipulated for Placements under General Mandate must be subjected to the prior approval of the issuer’s shareholders on the precise terms and conditions of the placements at the general meetings. Furthermore, interested parties connected to the placements are required to abstain from voting at the general meetings.
Applications for Placements under General Mandate that fully comply with the new guidelines on placement of securities and the Format and Content of Applications for Fund Raising under the Issues Guidelines will be given immediate decision upon application.
The Guidance Notes and the Policies and Guidelines on Issue/Offer of Securities are available here.
26 April 2006
Note to the Editor
- In Placements under General Mandate, shareholders of the issuer give general mandate to the directors of the issuer to issue securities via a resolution, in a general meeting, leaving the terms and conditions of the issuance at the directors’ discretion.
- Guidance Note 6D sets out the revised requirements for placements of securities undertaken as part of public offerings and listings by companies seeking listing on the Main or Second Board of Bursa Malaysia Securities Berhad (Bursa Malaysia). Guidance Note 6D replaces the existing provisions of paragraph 6.07 of Chapter 6 of the Policies and Guidelines on Issue/Offer of Securities (Issues Guidelines) issued by the SC.
- Guidance Note 8C sets out the revised requirements for placements and other issuance of securities for cash (other than rights issues) by listed companies and replaces the existing provisions of paragraphs 8.03 to 8.09 of Chapter 8 and paragraphs 10.02 to 10.05 of Chapter 10 of the Issues Guidelines. The criteria under Guidance Note 8C shall also be applicable for companies listed on the MESDAQ Market and will supersede Rule 3.13 of Chapter 3 and Guidance Notes 4 of Bursa Malaysia’s Listing Requirements for the MESDAQ Market which were adopted by the SC via a press release dated 17 December 2004.
- Guidance Note 12C introduces the requirements relating to placements undertaken as a mode of securities distribution that forms an integral part of restructuring schemes and/or proposals resulting in significant changes in business direction of listed companies. The criteria under Guidance Note 12C shall also be applicable for companies listed on the MESDAQ Market that undertake such corporate proposals.