Kuala Lumpur, 28 March 2025 – The Securities Commission Malaysia (SC) has today announced the issuance of new Guidelines on the Offer of Shares by Unlisted Public Companies (Guidelines), designed to enhance investor protection and ensure market integrity. The updated Guidelines, which will take effect on 28 March 2025, supersede the previous 2021 Guidelines on the Offer of Shares by Unlisted Public Companies to Sophisticated Investors.
This move is part of ongoing efforts by the SC to strengthen Malaysia’s capital market regulations. In developing the updated Guidelines, the SC has responded to concerns raised by stakeholders, particularly regarding the quality and transparency of information disclosed in the information memorandum (IM). Key issues addressed include unrealistic promises of high returns, insufficient disclosure of investment risks, and cases where shares meant exclusively for sophisticated investors were offered to retail investors without proper registration with the SC, in violation of securities laws.
The new Guidelines introduce several important changes and requirements, including:
- Consultation with the SC and Appointment of Corporate Finance Adviser (CFA): UPCs must consult with the SC and appoint a CFA before offering shares.
- Minimum Content Requirements for Information Memorandum (IM): The IM must now meet specific content requirements to ensure transparency and comprehensiveness.
- 18-Month Validity Period: Offers will be valid for 18 months from the commencement of the offering.
- Conduct Obligations: The Guidelines impose new conduct obligations on the UPCs, CFAs, and any agents marketing shares. Additionally, Shariah Advisers will be required for the offering of Shariah-compliant shares.
- Reporting and Verification Obligations: UPCs will be required to submit quarterly post-issuance updates and verify the use of proceeds annually through an approved company auditor.
- Ongoing Offerings: The Guidelines outline the treatment of ongoing offerings made by UPCs prior to the effective date of the new rules.
The updated Guidelines also reflect input gathered from industry consultations, including feedback from CFAs. These updates aim to facilitate more informed investment decisions and protect investors from potential market risks.
For further details, the full Guidelines and accompanying FAQs are available at: https://www.sc.com.my/regulation/guidelines/upc.
