Securities Commission Malaysia building at Kuala Lumpur.
KUALA LUMPUR: The Securities Commission Malaysia (SC) has issued new guidelines on the offer of shares by unlisted public companies (UPC), aimed at enhancing investor protection and safeguarding market integrity.
The guidelines, which take effect today, supersede the 2021 guidelines on the offer of shares by UPCs to sophisticated investors.
"These guidelines are part of the market and regulatory reforms that the SC is undertaking," the commission said in a statement.
In updating the guidelines, the SC has addressed concerns regarding the quality of information and the disclosure standards in the information memorandum (IM), aiming to help investors make better-informed decisions.
"The issues raised include unrealistically high returns promises, insufficient disclosure of risks affecting returns, and instances where shares of UPCs, meant exclusively for sophisticated investors, were improperly offered to retail investors without a registered prospectus, as required by securities laws," it explained.
The commission noted that the new guidelines introduce several measures, including consultation with the SC and appointment of a corporate finance adviser (CFA) before starting a share offering, minimum content requirements for the IM, and a validity period of 18 months from the commencement of the offering.
It also includes conduct obligations for all parties involved, including the CFA, the UPC's board of directors, appointed agents, and Shariah advisers for Shariah-compliant shares.
Besides, the guidelines further outline reporting obligations, including quarterly post-issuance update reports, annual verification by an approved company auditor on the actual utilisation of proceeds and treatment of ongoing offerings made by the UPCs before the guidelines take effect, it said.
The SC added that these revisions were made following industry engagements, including feedback from CFAs.
The new guidelines and frequently asked questions (FAQs) are available at https://www.sc.com.my/regulation/guidelines/upc. - Bernama
