ASEAN KEY DESTINATIONS
BURSA MALAYSIA FACILITATES LISTING OF BUSINESS TRUSTS AND FOREIGN COLLECTIVE INVESTMENT SCHEMES
25 Mar 2013
In line with the objective to promote market and product innovation, Bursa Malaysia today issued its amended rules to enable the listing of business trusts on the Main Market of Bursa Malaysia Securities Berhad (“the Exchange”).
Business trusts are business enterprises set up as a trust structure, managed by a trustee-manager which holds the assets on trust for unit holders of the business trust. It has hybrid structures with elements of both a company and a trust. Business enterprises with stable growth and cash flow may now consider business trusts as an alternative structure to raise capital through initial public offerings in Malaysia.
Bursa Malaysia’s Chief Executive Officer, Dato’ Tajuddin Atan said, “The introduction of a business trust framework on the Exchange will create a new asset class for investors and broaden their choice of investments. This will in turn add more depth and sophistication to Malaysian’s capital markets.”
Pursuant to the amendments made to the Main Market Listing Requirements, the provisions applicable to a corporate listed issuer are generally also applicable to a business trust, subject to the necessary modifications in light of its trust structure. These provisions include requirements on admission, public spread, composition of independent directors, and post listing obligations such as the requirements for disclosure including immediate announcement of specific events, quarterly reports and annual reports, requirements on related party transactions and financial condition. The Exchange is committed to ensure that investors in business trusts are accorded the same level of investor protection comparable to that available vis-?-vis a corporate issuer. Consequential amendments have also been made to the Rules of Bursa Depository.
Further to the above, in line with the legal framework for business trust which allows the listing of a business trust established outside Malaysia, the Exchange has also reviewed Chapter 4A of the Main Market Listing Requirements holistically, to extend the framework to listings of all eligible foreign collective investment schemes on the Exchange. Under the amendments, any foreign collective investment schemes which meet the SC's Guidelines for the Offering, Marketing and Distribution of Foreign Funds can now seek listing on the Exchange. Previously, only foreign corporations are allowed to be listed on the Main Market of the Exchange.
A summary of the changes to the Main Market Listing Requirements are attached as Appendix 1.
For more information on the relevant rules, which are effective immediately, please visit the Exchange’s website at www.bursamalaysia.com.
SUMMARY OF THE SALIENT AMENDMENTS TO THE MAIN LR ON BUSINESS TRUST AND FOREIGN COLLECTIVE INVESTMENT SCHEMES
1. The salient amendments in relation to business trust are as follows:
(a) Clarifying that where applicable, the requirements in the Main LR shall apply to an applicant or a listed issuer which is a business trust subject to such adaptations or modifications, where necessary [paragraph 2.09 of the Main LR].
(b) Applying similar admission procedures and requirements applicable to a listed issuer, to a business trust applicant seeking listing of a business trust on the Main Market [new Part F in Chapter 4; Practice Notes 21 and 23 of the Main LR].
(c) Imposing similar public spread requirements applicable to an applicant which is a corporation, to a business trust applicant at admission and on a continuing basis [new paragraph 4.19, paragraph 8.02 and new paragraph 8.40A of the Main LR].
(d) Imposing similar requirements applicable to a listed issuer in relation to the composition of independent directors on the board and audit committee, to the board and audit committee of a trustee-manager at admission and on a continuing basis [new paragraphs 4.17 and 4.18 of the Main LR].
(e) Requiring the solvency statement and distribution policy to be included with the announcement of distribution made pursuant to paragraph 9.19(2) of the Main LR [new paragraph 9.52 of the Main LR].
(f) Prescribing specific events which require immediate announcements by a business trust [new paragraph 9.53 of the Main LR].
(g) Prescribing additional information to be included in the quarterly reports and annual reports of a business trust [new paragraph 9.54 and Part C of Appendix 9B; new paragraph 9.55 and Part C of Appendix 9C of the Main LR].
(h) Applying the requirements in Chapter 10 of the Main LR to a business trust or its subsidiaries which enters into transactions. For this purpose -
(i) a new definition of the business trust’s subsidiary is provided;
(ii) the definitions of “director”, “major shareholder”, “major unit holder”, “related party” and “person connected” are amended to cater for a business trust structure; and
(iii) the relevant interested persons such as the trustee-manager, its director, major shareholder and persons connected, as well as the major unit holder and its persons connected, are expressly excluded from voting on a resolution approving a related party transaction or a Recurrent Related Party Transaction,
[paragraph 1.01, paragraphs 10.02(c), (f) and (fA); paragraphs 10.08(7) and 10.09(2) of the Main LR].
(i) Allowing a business trust to undertake a unit buy-back [paragraph 12.01 and new paragraph 12.27 of the Main LR].
(j) Applying the requirements on dealings in listed securities within and outside the closed period in Chapter 14 of the Main LR to the director, chief executive, chief financial officer and any other employee of the trustee-manager who is privy to price sensitive information of the business trust [paragraphs 14.02(b)(ii) and (i)(ii); and paragraph 14.03(1) of the Main LR].
(k) Applying the existing PN17 framework to a business trust with the necessary modifications [paragraph 8.04 and Practice Note 17 of the Main LR].
(l) Streamlining the relevant terminologies used in the Main LR with the CMSA and the SC’s Business Trust Guidelines.
2. The key amendments relating to collective investment schemes are as follows:
Foreign Collective Investment Schemes
(a) Extending the requirements relating to foreign listing in Chapter 4A to -
(i) a collective investment scheme that is primarily regulated in a jurisdiction other than Malaysia, including a business trust established outside Malaysia (“foreign collective investment scheme”) seeking primary listing on the Main Market; and
(ii) a collective investment scheme, including a business trust seeking secondary listing on the Main Market.
[Chapter 4A; Practice Notes 21, 23, 24 and 25 of the Main LR].
Suspension and Delisting of Collective Investment Schemes
(b) Clarifying the circumstances in which the Exchange may suspend trading of listed units or delist a collective investment scheme (including a business trust) [new paragraphs 16.02(1)(iA) and 16.11(2)(c) & (d) of the Main LR].
From BURSA MALAYSIA
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