The Guidelines, which will take effect on 28 March 2025, supersedes the Guidelines on Offer of Shares by Unlisted Public Companies to Sophisticated Investors issued by the SC in 2021.

The Guidelines is part of the market and regulatory reforms that the SC is undertaking.

In updating the Guidelines, the SC has taken into account concerns and complaints on offering of shares by unlisted public companies (UPCs) particularly on the quality of information and the standard of disclosure in the information memorandum (IM), towards facilitating better informed investment decisions.

This includes, among others, promises of unrealistic high returns and insufficient disclosure on the risks affecting returns. There were also instances where shares of UPCs, meant exclusively for sophisticated investors, were offered to retail investors without registering a prospectus with the SC, as mandated by securities laws.

The requirements in the Guidelines include:

1. a consultation with the SC and appointment of a corporate finance adviser (CFA) prior to commencement of the offering of shares by the UPCs;
2. prescription of minimum content requirements on the information in the IM;
3. prescription of a validity period of 18 months from commencement of the offering;
4. conduct obligations to be imposed on the parties involved in the offering, which includes the CFA and board of directors of the UPCs. This also applies to agents appointed by the UPCs to market and promote their shares, and Shariah Advisers for the offering of Shariah-compliant shares;
5. reporting obligations which include quarterly submission of a post-issuance update report and verification by an approved company auditor on the actual utilisation of proceeds on an annual basis; and
6. the treatment of ongoing offerings made by the UPCs prior to the effective date of the Guidelines.

In revising the Guidelines, the SC has incorporated feedback from engagements with the industry, among others, the CFA.

The new Guidelines and accompanying FAQs can be found at https://www.sc.com.my/regulation/guidelines/upc.