Measures announced to boost Malaysian capital markets
21 June 2023
The Malaysian Government and the Securities Commission Malaysia (‘
SC’) recently announced measures that seek to boost the Malaysian capital market.
On 15 June 2023, En Kamarudin Hashim, Managing Director of the SC announced the following measures during his
keynote address at the International Institutional Investor Series 2023:
| 1. |
widening the sophisticated investor base by providing flexibilities within the calculation of high-net worth individuals (HNWI) threshold and expanding the qualification criteria to take into account the knowledge and experience of the investors; |
| 2. |
extending the participation by angel investors’ in other capital market products beyond the private markets and Micro, Small & Medium Enterprises (MSMEs) space; and |
| 3. |
introducing a ‘foreign exempt schemes’ framework to enable fund managers to offer funds to high net worth entities and institutional investors in the Malaysian capital market. |
En Kamarudin elaborated that the foreign exempt schemes framework will allow a foreign fund operator that is a related corporation of a fund manager licensed by the SC to offer foreign funds under the lodge and launch framework
1. The first phase of the foreign exempt schemes framework, which is targeted at institutional investors and high net worth entities, is expected to be launched by end-2023. The SC’s managing director added that the SC is also reviewing the next phase of liberalisation to include high-net worth individuals which is envisaged to take place in 2024.
At the launch of InvestED (the new name of the Capital Market Graduate Programme (CMGP)) for graduates on 19 June 2023, the Prime Minister and Minister of Finance of Malaysia, Dato’ Seri Anwar bin Ibrahim,
announced the following further measures:
| 1. |
the reduction in the rate of stamp duty on contract notes relating to the trading of listed shares on Bursa Malaysia from 0.15% to 0.10% with effect from July 2023 and with the stamp duty cap maintained at RM1,000 per contract note; |
| 2. |
to widen the pool of investors, the Ministry of Finance and the SC will look at policies to achieve the following: |
| a. |
to facilitate and attract the setting up of family offices in Malaysia; |
| b. |
to promote corporate venturing to drive greater domestic direct investment through more facilitative tax and incentive policies; and |
| c. |
to widen the definition of sophisticated investors to include angel investors.2 |
The Prime Minister added that reforms will be implemented by the SC and Bursa Malaysia within this year to facilitate listings on the exchange, including expediting the initial public offering process and shortening the time to market.
Comments
The implementation of the proposals will boost the vibrancy of the Malaysian capital market by adding width and depth to the offerings available as well as enlarging the pool of investors. In particular, the proposals to introduce a ‘foreign exempt schemes’ framework and to attract family offices to establish their office in Malaysia are interesting.
Alert by Kok Chee Kheong (Partner) and Joey Tiw (Senior Associate) of the Corporate Practice of Skrine.
1 The lodge and launch framework refers to the framework under the SC’s Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework.
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