Under the new framework for listings and equity fund-raisings which became effective on 3 August 2009, the SC no longer approves the issuance and offering of structured warrants under section 212 of the Capital Markets and Services Act 2007. With the coming into effect of this new framework, the SC’s Structured Warrants Guidelines has been disapplied and the issuance criteria for structured warrants have now been incorporated in Bursa Malaysia’s new Main Market Listing Requirements. The SC would, however, continue to vet and register structured warrants prospectuses to ensure adequate and meaningful disclosures to investors, while Bursa Malaysia has now taken on a more active role as the frontline regulator for the issuance and listing of structured warrants.

As a measure to mitigate potential systemic risk, maintain market confidence and protect investors, the SC would also continue to regulate the suitability of structured warrants issuers through the introduction and application of the eligibility guidelines. These guidelines have been formulated to provide guidance as to the SC’s overall expectations on, among others, issuer’s risk management measures, sales and marketing practices and internal control procedures.

Additionally, given the extent of product innovation and increasing sophistication of structured warrants, issuers are expected to have in place initiatives to educate or create greater awareness on structured warrants among investors, and such initiatives may include seminars/workshops, media briefings and interviews.

The SC has already consulted existing and potential structured warrants issuers on the proposed eligibility guidelines. Members of the public are encouraged to refer to the consultation paper for details of the key proposals.

The consultation paper in relation to the eligibility guidelines is available here. Comments to the issues set out in the consultation paper should be submitted to the SC by 7 October 2009.