On 6 March 2020, Bursa Malaysia Berhad (‘Exchange’) issued Consultation Paper No. 1/2020
to seek public feedback on the proposed introduction of anti-corruption and whistle-blowing measures in the LEAP Market Listing Requirements (‘LEAP LR’).
According to the Exchange, the rationale for the proposed introduction of anti-corruption and whistle-blowing measures is to provide a LEAP Market listed corporation (‘LEAP Listco’) with a measure of assurance and defence against corporate liability for corruption under section 17A of the Malaysian Anti-Corruption Commission Act 2009 (‘MACC Act’).
In essence, the Exchange seeks feedback from the public as to whether a principle-based approach or a prescriptive approach should be adopted in respect of the anti-corruption and the whistle-blowing measures to be introduced into the LEAP LR.
Under the principle-based approach, a LEAP Listco and its board of directors are required to ensure that a LEAP Listco and its group of companies establish and maintain the following –
- policies and procedures on anti-corruption that are, at a minimum, guided by the Guidelines on Adequate Procedures (‘GAP’) issued pursuant to section 17A of the MACC Act; and
- policies and procedures on whistle-blowing.
In the case of a prescriptive approach -
- a LEAP Listco and its board of directors are required to ensure that –
- a LEAP Listco and its group of companies establish and maintain –
- policies and procedures on anti-corruption that are, at a minimum, are guided by the GAP; and
- policies and procedures on whistle-blowing;
- the policies and procedures on anti-corruption and whistle-blowing are reviewed periodically (in any event at least one every three years) to assess their effectiveness; and
- corruption risk is included in the annual risk assessment of the LEAP Listco’s group; and
- a LEAP Listco is required to publish on its website its policies on anti-corruption and its policies and procedures on whistle-blowing.
The Exchange recognises that among the merits of the principle-based approach are that such an approach is consistent with the principle-based regulatory approach of the LEAP Market, provides greater flexibility and does not impose unnecessary compliance costs on a LEAP Listco. However, the Exchange acknowledges that the principle-based approach may not provide sufficient clarity and guidance as to how a LEAP Listco should implement anti-corruption and whistle-blowing procedures and may result in a LEAP Listco not putting in place adequate procedures so as to be able to rely on the adequate procedures defence under the MACC Act.
The Exchange recognises that the prescriptive approach will provide greater clarity to a LEAP Listco on the obligations to be complied with in relation to adequate procedures, help inculcate more regular and structured oversight by its board of directors and is likely to provide adequate defence under the MACC Act. On the other hand, the Exchange recognises that the prescriptive approach may be perceived as a departure from the principle-based approach of the LEAP Market and increase the compliance cost for a LEAP Listco.
The consultation period ends on 20 March 2020