Bursa Malaysia Berhad (“
Bursa Malaysia”) and RAM Holdings Berhad (“
RAM”) issued a
joint press release on 6 June 2023 announcing that their joint venture entity, Bursa Malaysia RAM Capital Sdn Bhd (formerly known as BM RAM Capital Sdn Bhd) (“
JVC”) had on 2 June 2023 received approval-in-principle from the Securities Commission Malaysia (“
SC”) in relation to the JVC’s application to be registered as a Recognized Market Operator under the
SC’s Guidelines on Recognized Markets to manage and operate a new debt fundraising platform (“
New Platform”).
The New Platform will enable listed and unlisted small to mid-sized companies to tap into a new pool of capital outside of traditional wholesale markets, offering a new avenue and greater flexibility to these companies looking to raise funds. The New Platform will provide a ‘bond-like’ experience allowing both sophisticated and retail investors to invest in conventional and Shariah investment notes with credit and environmental, social and governance (‘
ESG’) ratings that will facilitate informed investment decisions.
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The Chief Executive Officer of Bursa Malaysia, Datuk Muhamad Umar Swift, added that the New Platform “…
will further create an alternative fund-raising avenue for businesses which are currently underserved …”
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Bursa Malaysia and RAM hold 51% and 49% respectively of the equity interest in the JVC.
Comments
There is no doubt that the JVC is supported by two highly respected corporate entities in Malaysia. The proposal to assign ESG ratings to the instruments to be offered on the New Platform appears to be a ground-breaking move that will appeal to investors who emphasise on responsible investing. The introduction of such ratings could be an impetus for issuers of instruments to step-up the adoption of ESG practices in their businesses.
It will be interesting to see how the JVC will fare when it commences operations as there are currently 11 recognized market operators operating peer-to-peer financing platforms in Malaysia.
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Alert by Lee Ai Hsian (Partner) of the Fintech Practice of Skrine.