Bursa Proposes to Introduce Anti-Corruption and Digitisation Measures for Listed Companies

On 26 September 2019, Bursa Malaysia Berhad (‘the Exchange’) issued Consultation Paper No. 4/2019 (‘CP4/19’) seeking public feedback on the following amendments that the Exchange proposes to make to the Main Market Listing Requirements and ACE Market Listing Requirements (collectively ‘LR’) –
  1. introduce requirements on anti-corruption and whistle-blowing; and

  2. digitise certain corporate exercises.
Anti-Corruption and Whistle-Blowing
New provisions will be introduced into the LR that require a listed issuer to ensure that its board of directors –
  1. establish and maintain policies and procedures on anti-corruption and whistle-blowing;

  2. review the aforesaid policies and procedures annually and publish them on the listed issuer’s website annually; and

  3. include corruption risk in its annual risk assessment framework.
The proposed amendments also specify that the policies and procedures on anti-corruption are to be guided by the Guidelines on Adequate Procedures issued by the Malaysian Anti-Corruption Commission under section 17A(5) of the Malaysian Anti-Corruption Commission Act 2009 or any other recognised framework. 
In CP4/19, the Exchange has stated that alternative recognised anti-corruption frameworks are the Corporate Integrity System Malaysia and the ISO 37001 (Anti-Bribery Management Systems).
The proposed amendments will strengthen corporate governance of listed issuers and are in line with Strategy 6 (inculcate good governance in corporate entity) of the National Anti-Corruption Plan that was launched on 29 January 2019.  A summary of the National Anti-Corruption Plan is available here.
The introduction of anti-corruption policies and procedures measures will assist directors, controllers, officers and managers of listed companies to mitigate the risk of corporate liability under section 17 of the Malaysian Anti-Corruption Commission Act 2009 which is expected to come into operation on 1 June 2020.
Digitisation of Procedures for Certain Corporate Exercises
To complement the current manual methods, the proposed amendments in CP4/19 require a listed issuer to introduce measures that enable their securities holders to carry out the following electronically
  1. subscribe and pay for a rights issue;

  2. convert and py for convertible securities; and

  3. elect to participate in a dividend reinvestment scheme.
The proposed amendments clarify that “electronically” means “through an internet-based facility made available to securities holders, the use of automated teller machines or any other electronic mode as may be prescribed by the Exchange”.

Consequential amendments will be made to several provisions of the LR as a result of the introduction of the digitisation of the procedures mentioned in sub-paragraphs (1) to (3) above.

The consultation period will end on 25 October 2019.

CP4/19 and the full text of the amendments to the Main Market Listing Requirements and the ACE Market Listing Requirements are available in the Public Consultation section of the Exchange’s website.