Friday, May 2, 2008

Kuala Lumpur Stock Exchange Listings Requirement

Apakah syarat-syarat penyenaraian yang ditetapkan oleh Bursa Saham Kuala Lumpur untuk syarikat yang disenaraikan di BSKL.

What are the condition of listing required by Kuala Lumpur Stock Exchange for companies which listed under KLSE.

The KLSE is a self regulating body incorporated as a company limited by guarantee with its own memorandum and articles of association. It was formed in 1976 to administer and ensure a set of rules with respect to the conduct of its members in securities dealings. It is responsible for the maintenance of an efficient market, and for surveillance and enforcement of the listing requirements which set out the criteria for companies seeking a public flotation of their shares and their continuing obligations. Listing means that securities issued by company can be bought and sold by investors through a public organized listed market.

The KLSE listing requirements contains variety of matters such as imposing additional disclosure requirements and imposing additional requirements that a company must meet before the company enters into certain types of transaction or issues new securities. The purpose of the listing requirements is to ensure that the market for listed companies securities is transparent, liquid and informed and that the interests of the companies public shareholders are protected.

Only listed companies and their participants are required to comply with the listing requirements. Some companies have their share listed for quotation on the KLSE. If a company is listed on the KLSE, members of the public can buy and sell these shares through the stock market conducted by the KLSE. As of 02 July 2001, out of half million registered companies Malaysia, only 809 are listed at the KLSE. Even though it represents a very small percentage of it, but the listed companies are very significant to the Malaysian economy.

However the KLSE issued the new listing requirements on 22 January 2001. Some of the key objectives of the requirements are to enhance corporate governance and transparency to strengthen investor protection and to promote investor confidence in the securities market.

So listing by creating a liquid market for a company’s securities can lower the company’s cost of capital. In addition, there may be other benefits, such as increased prestige or better relationship with lenders and suppliers.

Public companies proposing to list must make an application to the KLSE. The KLSE has a discretion to accept or reject any application. The KLSE and the Securities Commission ( SC ) set out the criteria for listing, in the KLSE listing requirements and the SC Policies and Guidelines on issue/offer of Securities ( Policies and Guidelines ), respectively. These criteria’s are designed to ensure that only companies of sufficient size and quality to attract investor’s interest are included in the First Board or Second Board. Basically the KLSE listing requires :-

General Requirements:-

(1) The company if applying to list on the main board has a minimum issued and paid up capital of RM 60 Million; if applying to list on the second board, has a minimum issued and paid up capital of RM 40 Million.

(2) The company has a constitution and that constitution is consistent with the listing requirements.

(3) A prospectus containing detailed information about the company and the securities is prepared.

(4) The company applies for quotation of its “main class” of securities.

(5) The company has at least 25% shareholding ( public spread ) in the company to be held by a minimum number of public shareholders each holding 1,000 or more shares. The minimum number of public shareholders depends on the nominal value of the company’s issued and paid up capital.

Quantitative Requirements:-

(1) It must be an issued and paid up capital

(2) Main board paid up capital consist RM 60 Million minimum comprising ordinary shares of not less than ten cents each.

(3) Second board paid up capital consist RM 40 Million minimum comprising ordinary shares not less than ten cents each.

(4) Maintenance of promoters shareholding.

(5) Compliance with shareholding spread requirements ( 25% of the company issued and paid up capital are in the hands of the public shareholders )

(6) Exercise/conversion price set at a price not lower than the public offer price of the ordinary shares of the company.

(7) Disclosure in the prospectus.

(8) Shareholding spread ( public shareholders )

(9) Nominal Value of issued and paid up capital.

(10) RM 40 Million to less than RM 60 Million share spread among minimum 750 share holders.

(11) RM 100 Million and above-share spread among 1,250 shareholders

(12) Public spread at least 25% of issued and paid up capital at time of listing shall be in the hands of the public who can be nay.

However this requirements does not include :-

(1) Director of the company and its affiliation.

(2) Shareholders who owns 5% or more of the issued and paid up capital of the company.

(3) An associate of a director or shareholder who owns 5% or more than the issued or paid up of the capital.

(4) 25% share spread will be considering.

(5) Up to 5% issued and paid up capital owned by the employees.

(6) Up to 10% of issued and paid up capital held by Bumiputra investors for the purpose of compliance with the National Development Policy.

(7) Business operations

(8) Historical profit performance ( good track record ) – an uninterrupted after tax profit record for the past 3-5 financial year for both board.

(9) Perform accounts – accounts of group companies.

Qualitative Requirements:-


(1) Business dynamics

(2) Competition dynamics

(3) Investing dynamics

(4) Transaction with related parties

(5) Assessment of vulnerability and risks.

(6) Contribution to economic growth and government projects.

The role of KLSE as a body which took responsible for the maintenance of an efficient market, and for surveillance and enforcement of listing requirements as a guidelines and framework for companies; assist and facilitate the development of company’s securities in Malaysia.

3 comments:

Dorothy said...

Interesting information about the listing capital and many people agree with your all information well done and keep it up.
listing capital

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Matt He said...
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