8 May, 2016
Survey of ASEAN Regulations
Applicable Regulatory Body and Market Information
- Securities Commission Malaysia (“SC”) 920 listed companies: 811 listed companies under Main Market, 109 listed companies under ACE market as of 02/16.
- Market capitalization is RM 1.7 Trillion/USD 434.63 billion as of 31/12/15.
Securities Offering and/or Registration and Exemption Requirements
A person who offers securities in Malaysia must obtain recognition from the SC and register a disclosure document, unless exempted.
Wholly exempt transactions (which are exempted from both SC recognition and disclosure document registration requirements) include offerings pursuant to employee share scheme, bonus issue, scrip dividend, rights issue, and take-over offers.
Partially exempt transactions (which are exempted from the SC recognition requirement but still require SC registration of a disclosure document) include offerings to holders of capital markets services licence, high-net worth individuals and entities18.
Further, a prospectus must be registered with the SC unless it is an excluded offer. Excluded offers include: offers to holders of capital markets services licence, high-net worth individuals and entities, offers pursuant to employee share scheme, bonus issue, scrip dividend, rights issue, and take-over offers.
Marketing of Securities Where Issuer/Sponsor Offshore and Investor Onshore
It is the act of making an offer onshore (including marketing or promotional activity carried out onshore) that triggers the regulations, regardless of whether the offeror is offshore.
Need to Engage Onshore Sponsor, Licensed Placement or Other Distribution Agent
In respect of certain partially exempt transactions, the distribution of the securities must be made by a holder of a capital markets services licence who carries on the business of dealing in securities19.
Legends or Other Disclosure Requirements on Offering Materials
The SC Prospectus Guidelines require the following to be stated – “The Securities Commission Malaysia has approved the issue, offer or invitation for the offering (where applicable) and a copy of this prospectus has been registered with the Securities Commission Malaysia. The approval, and registration of this prospectus, should not be taken to indicate that the Securities Commission Malaysia recommends the offering or assumes responsibility for the correctness of any statement made or opinion or report expressed in this prospectus. The Securities Commission Malaysia has not, in any way, considered the merits of the securities being offered for investment. The Securities Commission Malaysia is not liable for any non-disclosure on the part of the company and takes no responsibility for the contents of this document, makes no representation as to its accuracy or completeness, and expressly disclaims any liability for any loss you may suffer arising from or in reliance upon the whole or any part of the contents of this prospectus.”
Other Relevant Considerations
All income of companies and individuals accrued in or derived from Malaysia are liable to Malaysian income tax. Income of foreign enterprises engaged in a trade or business in Malaysia through a permanent establishment is liable to Malaysian income tax.
To view the complete guide, please click here.
18 High-net worth individual means an individual whose total net personal assets exceed RM 3 million (excluding the value of his primary residence) or whose gross annual income exceed RM 300,000. High-net worth entity means a corporation with total net assets exceeding RM 10 million.
19 Dealing in securities is a regulated activity under the Capital Markets and Services Act 2007.
Prepared by Lex Mundi, Skrine – Lex Mundi Member Firm for Malaysia
