Bursa Malaysia Securities amends Structured Warrants provisions in Main Market Listing Requirements

Bursa Malaysia Securities Berhad (‘the Exchange’) amended certain provisions relating to structured warrants in the Main Market Listing Requirements (‘Main LR’) with effect from 19 January 2023.
The key amendments to the provisions on structured warrants in the Main LR are as follows: 
  1. revising the market capitalisation requirements for structured warrants as follows: 
  • for underlying shares, revising the average daily market capitalisation for the three months preceding the date of issue from RM1 billion to RM500 million1; and 

  • for underlying exchange traded funds (‘ETF’), removing the market capitalisation requirements2
  1. excluding leveraged ETF3 and inverse ETF4 (L&I ETFs) as eligible underlying financial instruments of structured warrants5

  2. removing the option for issuance of put warrants together with call warrants of the same size and tenure based on underlying shares that are not Approved Securities;6 

  3. reducing the minimum tenure of index-based structured warrants from six months to three months;7 

  4. clarifying that for index-based structured warrants which are settled in cash, the final settlement price settling the corresponding index futures contract on the market day before the expiry date of the structured warrants will be used if the contract is settled in a time zone that is behind Malaysian time;8 and 

  5. clarifying the requirement to announce the unaudited half yearly financial statements and annual audited financial statements of an issuer of structured warrants.9 
According to the Exchange, the amendments in paragraphs 1 to 4 above will make available a wider pool of underlying financial instruments to issuers of structured warrants and provide more investment opportunities for investors.
The full text of the above referred amendments can be accessed here.
Alert by Kok Chee Kheong (Partner) of the Corporate Practice of Skrine.

1 See amendments to paragraph 5.03(1)(a) of the Main LR. It is to be noted that the requirement for newly listed corporations that do not meet the 3-month market capitalisation track record remains at RM3 billion under paragraph 5.03(1)(b) of the Main LR.
2 See amendments to paragraphs 5.03(1) and 5.03(1A) of the Main LR.
3 A leveraged ETF aims to deliver multiples of the daily performance of the index or benchmark (paragraph 2.02 of the Securities Commission Malaysia’s Guidelines on Exchange Traded Funds).
4 An inverse ETF aims to provide return or performance that is opposite of the daily performance of the index or benchmark being tracked (paragraph 2.02 of the Securities Commission Malaysia’s Guidelines on Exchange Traded Funds).
5 See new paragraph 5.04A of the Main LR.
6 Paragraph 5.06(b) of the Main LR is deleted. ‘Approved Securities’ are securities prescribed by the Exchange under Rule 8.22(5) of the Rules of Bursa Malaysia Securities Berhad for purposes of Regulated Short Selling and Permitted Short Selling.
7 See new paragraph 5.15(a)(ii) of the Main LR. The minimum tenure of other structured warrants remains at six months under paragraph 5.15(a)(i) of the Main LR. The maximum tenure for all structured warrants remains unchanged at five years.
8 See new paragraph 5.26(1)(b)(ii)(bb) of the Main LR.
9 See amendments to paragraph 5.34 of the Main LR.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.