Streamlining the Capital Market
May 2008
Malaysia's stock exchange Bursa Malaysia has proposed to merge its Main and Second Boards as part of a move to provide better access to the capital market, facilitate capital raising exercises, and inject further confidence into a lacklustre stock market.
According to the Securities Commission (SC), the Main and Second Boards will be merged into a unified board for companies with an established profit track record, where the qualifying criteria for listing will be based on the current Second Board criteria. The SC hopes that this move will negate the differentiation of companies based on size and facilitate the assessment of companies on the basis of quality of earnings.
The MESDAQ Market, which was initially set up to house tech and high-growth companies without a profit track record, will be transformed into a sponsor-driven market and expanded to include the listing of both technology and non-technology emerging companies.
The SC also plans to introduce a new regulatory approach for listings and fund-raising on the unified board and MESDAQ, whereby principal advisers and sponsors will be bringing companies to list on Bursa Malaysia and will be responsible for ensuring the quality and suitability of companies for listing. In addition, sponsors will be expected to ensure ongoing supervision of companies post listing for the MESDAQ market.
The new approach will enable the SC to shift its focus from assessing the suitability of proposals to ensuring the adequacy and quality of disclosures in prospectuses in order to safeguard corporate governance and public interest.
The streamlined board structure, together with the new regulatory and listing approach, will be implemented by the end of 2008.
Malaysia's stock exchange Bursa Malaysia has proposed to merge its Main and Second Boards as part of a move to provide better access to the capital market, facilitate capital raising exercises, and inject further confidence into a lacklustre stock market.
According to the Securities Commission (SC), the Main and Second Boards will be merged into a unified board for companies with an established profit track record, where the qualifying criteria for listing will be based on the current Second Board criteria. The SC hopes that this move will negate the differentiation of companies based on size and facilitate the assessment of companies on the basis of quality of earnings.
The MESDAQ Market, which was initially set up to house tech and high-growth companies without a profit track record, will be transformed into a sponsor-driven market and expanded to include the listing of both technology and non-technology emerging companies.
The SC also plans to introduce a new regulatory approach for listings and fund-raising on the unified board and MESDAQ, whereby principal advisers and sponsors will be bringing companies to list on Bursa Malaysia and will be responsible for ensuring the quality and suitability of companies for listing. In addition, sponsors will be expected to ensure ongoing supervision of companies post listing for the MESDAQ market.
The new approach will enable the SC to shift its focus from assessing the suitability of proposals to ensuring the adequacy and quality of disclosures in prospectuses in order to safeguard corporate governance and public interest.
The streamlined board structure, together with the new regulatory and listing approach, will be implemented by the end of 2008.
posted by Toyers at
10:08 PM
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