KUALA LUMPUR: Bursa Malaysia Bhd
has proposed to set up a new market on the exchange for the small and medium-sized enterprises (SMEs) and seeks public feedback on the consultation paper.
Chief executive officer Datuk Seri Tajuddin Atan said that SMEs were a core contributor to the country’s gross domestic product (GDP) and played an important role in the country’s overall production network and employment.
“Bursa Malaysia aims to facilitate greater access to capital market financing for SMEs to support their developmental and lifecycle needs,” he said in a statement issued on Friday.
SMEs make up some 98.5% of companies in Malaysia and contribute more than 30% to the GDP. Under the Government’s SME Masterplan (2012-2020), it targets to boost SMEs’ contribution to the GDP to 41% by 2020.
In 2014 the Government updated the definition of SMEs as firms with turnover of less than RM20mil or up to 75 workers for the services sector, and sales not exceeding RM50mil and full-time staff of up to 200 workers for the manufacturing sector.
Last year Bursa Malaysia announced certain changes to the ACE Market listing requirements which were aimed at attracting more eligible SMEs to consider IPOs on the market.
Tajuddin pointed out that based on the report by World Federation of Exchanges (WFE) and the World Bank Group’s Policy Research Working Paper, stock exchanges played an important role in the development of SME financing.
“However, having the right ecosystem is critical to ensure the success of such market. As such, this new market is premised on three key guiding principles, which are cost efficient, appropriate regulations and a qualified market for sophisticated investors,” he said.
Bursa Malaysia proposes to classify a licensed CFA who may act for the new market applicants/listed corporations into two main categories, i.e. approved adviser or continuing adviser. An approved adviser is authorised to undertake both initial listing activities and post-listing activities, while a continuing adviser may undertake post-listing advisory activities only, such as advising companies on compliance with the listing requirements.
“It is envisaged that the adviser will play a more active role in identifying the companies to be listed and guiding them through their journey as a listed company in this market,” said Tajuddin.
Bursa Malaysia is seeking insights and inputs from the potential companies, advisers, investors and the general public particularly in these areas: Listing framework, listing process, adviser framework, post listing disclosures, graduation facilitation, post listing disclosures, investors, and trading, clearing, settlement & depository framework.
The consultation paper is available at: http://www.bursamalaysia.com/market/regulation/rules/public-consultation
Bursa Malaysia said interested parties and the public are invited to submit their comments and feedback before the closing date of Oct 2.
Among the proposals is that there will be no minimum quantitative requirements in relation to profit or operating track record for corporations seeking listing on the new market.
At the point of listing on the market, an issuer must have at least 10% of the total number of shares in the hands of public shareholders.
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