SC’s recasting of public markets a step forward?

The Securities Commission of Malaysia building in Kuala Lumpur is a 2001 Asean Energy Award winner where it saves RM2.5mil per annum alone on electricity bills.

THE Securities Commission (SC) is looking at one of the most significant updates to Malaysia’s listing ecosystem in over a decade.

Targeted for rollout in the first half of financial year 2026, the reforms aim to sharpen the distinction between the Main and ACE Markets, improve accessibility, and modernise long-standing rules.

Some proposals clearly move the market forward, while others appear to stir controversy.

The Main Market reforms are, for the most part, sensible housekeeping.

The proposal to raise minimum profit-after-tax (PAT) requirements under the profit test is overdue, given that the current thresholds date back to 2009.

Accounting for inflation alone justifies the adjustment, and companies strong enough to seek a Main Market listing are unlikely to struggle to meet the new benchmark.

Even after the increase, Malaysia’s PAT requirement remains lower than that of regional peers such as Singapore.

Relaxing the need for positive operating cash flow creates space for high-growth or capital-intensive firms to access the market.

Meanwhile, allowing infrastructure project corporations to aggregate renewable energy assets aligns the framework with how the industry now operates.

These are pragmatic refinements aimed at deepening the pool of quality Main Market candidates.

It is the proposed reshaping of the ACE Market that has stirred debate.

One of the more contentious issue is the SC’s plan to empower itself to require ACE-listed companies to transfer to the Main Market once they meet certain criteria.

Such a forced migration raises cost and compliance burdens for issuers and may clash with their strategic preferences.

Companies comfortable on ACE – whether due to cost, liquidity, or branding – may prefer to remain there, and it is unclear how the SC would navigate resistance.

The proposal to remove long-standing sponsorship exemptions and mandate a three-year sponsorship period for ACE companies also raises questions about necessity versus added friction, especially for firms already close to Main Market readiness.

Overall, the Main Market changes reflect constructive modernisation.But the ACE Market reforms risk reshaping the small and medium enterprise landscape in ways that may not align with market realities.

The consultation process, which the SC is currently undertaking, will be crucial in balancing regulatory clarity with issuer flexibility.