Following feedback received on these three Consultation Papers, a number of initiatives to enhance investor protection and achieve regulatory parity, provide shareholders with appropriate information for well-informed investment decision-making, and enhance sales practices for unlisted products are to be implemented.
- The SC and Bursa Malaysia jointly announce that the threshold for shareholder approval relating to a listed company disposing all, or substantially all, of its assets resulting in it being no longer suitable for continued listing on Bursa Malaysia (Asset Disposal) is raised to 75%. This will apply to all new Asset Disposals announced on or after 28 January 2011. This will ensure that shareholders of listed companies will receive the same degree of protection regardless of the route that is chosen to privatise the company. In addition, companies undertaking an Asset Disposal are now required to provide their shareholders with independent advice and detailed disclosure on the utilisation of proceeds from the Asset Disposal. This will increase transparency and ensure shareholders are equipped with adequate information for decision making.
- The SC will provide guidance on the interpretation of the standard of ‘fair’ and ‘reasonable’ that is applied by independent advisers in assessing take-over offers. The SC will also be providing guidance on matters that need to be analysed and synthesised, as a minimum, by independent advisers in making a recommendation in relation to a take-over offer. In line with this, the SC will issue a revision to Chapter 12 of the Guidelines in due course. These enhancements will provide investors with clearer and more comprehensive advice to help them make a decision.
- A set of integrated measures to streamline the categories of investors and enhance the sales practices regime, which balances investors’ needs for appropriate levels of protection, market growth and product innovation, will be introduced. These will include:
- Measures that expand the sophisticated investors categories of High Net Worth Individuals / High Net Worth Entities / Accredited Investors and measures removing the ticket size of RM250,000 to ensure that complex and high risk products are offered or marketed only to investors who are truly sophisticated.
- A review of the sales practices regime to clarify the suitability assessment requirements under Section 92 of the CMSA; enhance disclosures by requiring the issuance of a separate disclosure document (Product Highlight Sheet) when offering unlisted capital market products; and to realign business processes and incentive structures by issuance of a guidance on Treating Investors Fairly.
The SC will be discussing these new measures with the industry before finalizing the disclosure requirements and guidance.
The Public Response Papers and Consultation Papers, together with further details and guidance on the enhancements are available here.
SECURITIES COMMISSION MALAYSIA
