The Securities Commission Malaysia (“SC”) unveiled the accelerated process for the transfer of listed corporations from the ACE Market to the Main Market of Bursa Malaysia Securities Berhad (“accelerated transfer process”) on 13 December 2023.
 
The accelerated transfer process is effected by making amendments to the SC’s Equity Guidelines and will take effect from 1 January 2024.
 
A summary of the main requirements of the accelerated transfer process is set out below.
 
Main requirements
 
A listed corporation seeking a transfer of listing under the accelerated transfer process must meet the following requirements set out in paragraph 8.01A of the Equity Guidelines: 

In addition, the applicant must comply with the requirements set out above as well as in paragraph 8.03 (see below) of the Equity Guidelines until the date of transfer of listing to the Main Market. The SC may reject a proposal or revoke an approved proposal if these requirements are not complied with.³
 
Additional requirements
 
In considering a proposal under Equity Guidelines, including an application for an accelerated transfer process, the SC will consider the corporate governance matters set out in Chapter 3 of the Equity Guidelines. In this regard, a new requirement has been added that the SC will also consider the applicant’s level of adoption of the best practices under the Malaysian Code on Corporate Governance.⁴
 
The SC will also take into account any past records of unusual market activities or other events which may have adversely affected the fair and orderly trading of the listed securities of the applicant, including any designation or trading restrictions imposed by the Bursa Malaysia Securities Berhad up to the past one year prior to submission of the application to the SC.⁵
 
The applicant must have a healthy financial position⁶, including positive cash flow from operating activities for its most recent three full financial years.⁷
 
Prior consultation
 
A prospective applicant and its advisers for an accelerated transfer process are required to consult the SC prior to the submission of the application.⁸
 
Contents of application for transfer via accelerated transfer process
 
A new Appendix 3A (Content of Application for Transfer of Listing via the Accelerated Transfer Process) has been added to the Equity Guidelines to set out the information and documents that have to be submitted to the SC in connection with an application for accelerated transfer process. In addition, a new sentence has been added to Appendix 3 (Content of Application for Transfer of Listing) to clarify that Appendix 3 does not apply to an application for a transfer of listing via the accelerated transfer process.
 
Declaration of compliance
 
A declaration to be submitted to the SC with an application for accelerated transfer process to confirm compliance with the matters set out in sub-paragraphs (a) to (d) and (f) to (g) of paragraph 8.01A of the Equity Guidelines and with all the relevant securities law and regulations, and ACE Market Listing Requirements has been inserted as a new Schedule 5 to the Equity Guidelines.
 
Comments
 
The existing provisions in the Equity Guidelines for the transfer of a listed corporation from the ACE Market to the Main Market have been retained. Thus, a corporation listed on the ACE Market may still seek a transfer of listing under the existing provisions if it is unable to satisfy the more stringent requirements applicable to the accelerated transfer process. For example, under the conventional transfer application process, an applicant must have a daily market capitalisation of at least RM500 million for the one year period preceding the application whereas under the accelerated transfer process, the daily market capitalisation requirement is at least RM1 billion for the six months preceding the transfer application.
 
From a comparison of the requirements in Appendix and Appendix 3A, it can be seen that the information to be submitted by an applicant under the accelerated transfer process is significantly less voluminous than under the conventional transfer application process. This will not only reduce compliance costs, but more significantly, reduce the time frame for an application to be dealt with under the accelerated transfer process.
 
Article by Joey Tiw (Senior Associate) and Siti Ayenaa Binti Mohd Anis (Associate) of the Corporate Practice of Skrine.
 

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