SC Grants Flexibilities for Businesses Issuing Convertible Notes to Venture Capital and Private Equity Firms
28 April 2020   |   Kuala Lumpur

The Securities Commission Malaysia (SC) today grants flexibilities for businesses issuing convertible notes to venture capital (VC) and private equity (PE) firms registered with the SC.

These flexibilities will allow businesses to lodge the issuance of their convertible notes directly with the SC without requiring the services of a principal adviser. Lodgement fees will also be waived, further lowering the fundraising cost.

This would particularly benefit start-ups, micro, small and medium-sized enterprises (MSMEs) as well as small and mid-cap companies, allowing the fundraising process to be more cost-effective and reduce time to market.

“The SC continues to explore measures to ensure that the capital markets remain accessible, particularly for MSMEs. This initiative is part of a series of flexibilities introduced to meet the funding needs required to weather the current situation, as well as to prepare businesses for recovery beyond this crisis,” said Datuk Syed Zaid Albar, Chairman of the SC.

There are currently 124 VC & PE firms that are registered with the SC, managing an estimated total commitment of RM6 billion.

The issuance of the convertible notes will be facilitated through new requirements in the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework. These new provisions will outline criteria for eligible convertible notes. This includes requirements for these convertible notes to be issued to and transferable only between VC and PE firms registered with the SC. The lodgement process has also been simplified via electronic submission of the required information via e-mail. These flexibilities will also be provided for Islamic convertible notes, but will be operationalised at a later date.

The eligibility criteria and requirements are found in the LOLA Guidelines: [https://bit.ly/358Kf10]. Further details on the information required to be lodged with the SC are set out in the Lodgement Kit [https://bit.ly/3bKRJJU]. Queries can be directed to [email protected].
SECURITIES COMMISSION MALAYSIA
SC-World Bank-IOSCO Asia Pacific Hub Conference 2019: Enhancing Financial Inclusion through Islamic Finance and FinTech
(From left to right):
  1. Abayomi A. Alawode, Head of Islamic Finance, Finance, Competitiveness and Innovation, The World Bank Group
  2. Datuk Syed Zaid Albar, Chairman of the Securities Commission Malaysia (SC)
  3. Dr. Firas Raad, Country Manager for Malaysia, East Asia and Pacific, The World Bank Group 
  4. Datuk Zainal Izlan Zainal Abidin, Deputy Chief Executive of SC
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