Bursa Wants To Enhance CIS, Framework, Seeks Feedback

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PETALING JAYA, Jul 20 – Bursa Malaysia Bhd is proposing to promote the exchange as a one-stop centre for all secondary fundraising by listed issuers, as it will be the single approving authority for all new issues of securities by Collective Investment Schemes (CIS) post-listing, except for debt securities. The move will result in shorter time-to-market and lower cost of regulation. This is one of the key proposals of a public consultation paper which is open for comment on Bursa Malaysia’s website until Sept 19, 2016.

The exchange said in a statement yesterday it has undertaken a holistic review of the regulatory framework under the Main Market Listing Requirements governing the post-listing obligations of all CIS, such as real estate investment trusts (REITs), exchange-traded funds and closed-end funds, with the aim of improving the quality of disclosures, strengthening protection of unit holders and facilitating greater operational efficiency and flexibility for the CIS. 

Its CEO Datuk Seri Tajuddin Atan said the review is part of Bursa Malaysia’s ongoing market development initiatives to expand the depth and breadth of Malaysia’s capital market by providing attractive diversified investment options to its investors. The review undertaken by the exchange is also aimed at equipping investors with meaningful information which are specific and relevant to each CIS.

This, it said, will serve to facilitate better understanding of risk, reward and potential of CIS, thereby aiding investors in making informed investment decisions. Examples include the enhanced management discussion and analysts or performance review of the CIS.

Through this, investors will be provided with greater clarity on the performance of the CIS which in turn, facilitates informed decisions by investors. Additionally, the exchange proposes to strengthen key aspects of investor protection of CIS. At present, only related party transactions and disposal of real estate exceeding 50% of the REIT’s total asset value will require unit holders’ approval.

Under this review, unit holders of REITs will be empowered with similar rights as shareholders of listed corporations entering into related party transactions and non-related party transactions, as their approval will be required if the prescribed materiality threshold is triggered.

In addition, unit holders’ rights will be further safeguarded through the proposed appointment of an independent adviser to advise minority shareholders in the case of a related party transactions. Lastly, the exchange is also proposing various liberalisations which are aimed at easing regulatory burden and promoting business efficacy.

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