The Securities Commission (SC) Malaysia, in collaboration with Bursa Malaysia, is actively working to enhance efficiency in the public markets, with a focused aim to facilitate smoother Initial Public Offerings (IPOs) for startups.

These efforts include implementing measures to reduce the time-to-market for companies aspiring to list on the stock exchange.

This development was revealed by Dato’ Seri Dr. Awang Adek Hussin, Chairman of SC Malaysia, during his keynote speech at the MVCA Malaysia Venture Forum 2023.

A key aspect of this collaboration is the SC’s initiative to streamline the IPO process with the aim to make it easier and more appealing for startups to go public.

They would also be offering tax deductions for eligible tech-based companies on the Main and ACE Markets. SC and Bursa are planning concessions on the soon-to-be-implemented capital gains tax for IPOs on Bursa Malaysia. These measures are designed to enhance fundraising efforts, sustain the vibrancy of the IPO market, and improve trading liquidity.

Moreover, the SC also plans to introduce a new mechanism by 2024 to facilitate the transition of companies listed on the ACE Market to the Main Market. This step is crucial for the growth of these companies, providing them with enhanced access to a broader investor base and potentially greater market visibility and liquidity.

Another significant initiative in the pipeline is the introduction of a small offering exemption in the Capital Markets and Services Act (CMSA), expected to roll out next year.

This exemption aims to create a safe harbor for specific sized offerings to sophisticated investors, easing the regulatory hurdles for startups and MSMEs in their fundraising endeavors. It is intended to streamline the capital-raising process for these entities, paving the way for their growth and eventual listing on the stock exchange.

He said,

“We are seeing a healthy pipeline of IPOs this year, with 32 companies approved to-date for listing on Bursa Malaysia, many of which are tech-related.

 

These are encouraging signs despite the challenges faced by the industry globally over the last two years, from softer valuations to caution among investors.”

Dato’ Seri Dr. Awang also shared how SC had revised the Special Purpose Acquisition Company (SPAC) Framework in Malaysia in 2022. This change allows venture capital and private equity professionals to steer SPACs, expanding the possibilities for these entities in business acquisitions.

The new SPAC rule permits acquisitions through the issuance of securities and simplifies the approval process for SPAC acquisitions, now requiring only a simple majority approval among shareholders.

This revised framework is expected to stimulate listings and deals in Malaysia, encouraging mergers and acquisitions and promoting corporate transformation.