The existing companies on the Main and Second boards of Bursa Malaysia will be automatically transferred to the newly created unified board upon completion of the merger between the two boards. The listing status of these companies will not be affected by the new listing requirements proposed by the Securities Commission (“SC”) in relation to the establishment of the unified board.

The new listing requirements and conditions will only apply to new companies seeking to list on the unified board. Companies that are already listed need not have to fulfill the new requirements. In relation to the listing requirements of the unified board, the SC issued a consultation paper on the proposals on 6th February 2009 to make the unified board more proactive and in tandem with the current developments. It is now seeking feedback from market participants on the proposals which it has been working on for the past one year. The consultative paper can be obtained from the following link on SC’s website (http://www.sc.com.my/clients/sccommy/Links/consultationpaper_20090206_web.pdf)

Among the proposed changes to the listing requirements are:-

• Aggregate net profit of at least RM20 million over the past three to five financial years (FY) and net profit of RM6 million for the latest financial year. (The existing rules require the main board candidates to have an aggregate profit of RM30 million or more, and minimum net profit of RM8 million for the most recent financial year. Second board companies are required to have an aggregate net profit of at least RM12 million and RM4 million or more for the latest financial year).
• Remove the profit requirement of RM30 million for companies that plan to seek listing via the market capitalisation mode. (The existing requirement that companies without a track record would need a market capitalisation of at RM500 million when listing stays). The rationale for this is that a corporation with a minimum market cap of RM500 million would generally be one that has a considerably strong financial standing of about RM50 million in its net profit.
• Balloting process to be optional for initial public offerings (“IPOs”) as long as the public spread requirement is met so that companies could distribute shares according to their needs.
• To attract more foreign companies to float shares on Bursa via a secondary listing, the SC proposed to remove the quantitative requirements, market capitalisation of RM1 billion and after-tax profit of RM60 million.
• Repositioning of the existing MESDAQ Market to a sponsor-driven alternative market for corporations from all business sectors (“new MESDAQ”).

[adapted from The Edge Daily, 16 February 2009 and www.sc.com.my]

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