On 26 May 2023, Bursa Malaysia Securities Berhad (‘the Exchange’) announced amendments to both the Main Market Listing Requirements (‘Main LR’) and the ACE Market Listing Requirements (‘ACE LR’) (collectively ‘LR’).
The amendments are part of the Exchange’s on-going efforts aim to improve the effectiveness and relevance of the LR. The amendments focus on two areas:
(a) Conflict of Interest (‘COI’) Amendments
The COI Amendments seek to promote greater transparency on COI of a director, key senior management and legal representative of a listed company (‘Key Person’) in a listed company and strengthening accountability and transparency of the Audit Committee (‘AC’) in its oversight over COI situations; and
(b) Other Amendments
The Other Amendments aims to enhance the LR in other aspects to address existing issues and gaps in the market and ensure the LR remains balanced, clear, relevant and updated.
The key COI & Other Amendments are as follows:
1: COI Amendments
(a) enhancing the existing COI disclosures of a Key Person in immediate announcements to the Exchange, annual reports and statement accompanying notices of annual general meetings, by requiring disclosure on the nature and extent of any COI or potential COI, including interest in any competing business, that the Key Person has with the listed company or its subsidiaries;
(b) expanding the scope of the AC’s review of COI situations to include those that arose or persist (in addition to those that may arise) and the measures taken to resolve, eliminate, or mitigate the COI; and
(c) requiring the AC to disclose a summary of any COI or potential COI situation within the listed company or group that it has reviewed (excluding a related party transaction (‘RPT’)), and the measures taken to resolve, eliminate, or mitigate such conflicts, in its AC report; and
2: Other Amendments
(a) exempting insurance coverage and indemnity for directors as permitted under the Companies Act 2016 from the RPT requirements;
(b) clarifying that a listed company must still comply with the relevant transaction requirements, in an exempted RPT of its subsidiary that triggers the percentage ratio of 25% or more, which does not involve the interest of any related party of the listed company or the listed company’s holding company;
(c) requiring disclosure of email address of the registered office and office where the register of securities is kept (collectively the ‘said offices’), and disclosure of facsimile number of the said offices only if available, in annual reports; and
(d) making other amendments to provide greater clarity and formalise existing practices such as clarifying that –
(i) an issue of securities by a listed company’s subsidiary which will result in a reduction of the listed company’s equity interest in such subsidiary, is a disposal of asset; and
(ii) in computing the percentage ratio of any transaction entered into by a subsidiary, the consideration for the transaction is the entire amount of consideration paid or received, and not the listed company’s proportionate interest in such consideration.
Effective Date of COI & Other Amendments
The COI & Other Amendments take effect on the implementation dates as set out in the table below:
All amendments to the LR (except for those mentioned specifically under items (b), (c) and (d) of this table below)
Enhancements to existing COI disclosures of a Key Person in –
1 July 2023 onwards
Expanded role of the AC to review COI situations that arose or persist (in addition to those that may arise) and the measures taken to resolve, eliminate, or mitigate the COI
Enhancements to the contents of annual reports:
Annual reports issued for financial years ending on or after 30 June 2024
The COI and Other Amendments together with FAQ can be downloaded from Bursa’s website:-
- Main LR
- ACE LR
Navigating Listing Requirements with Ease
As a listed company, it is important to stay well-informed about the latest requirements in order to maintain compliance and prevent any potential penalties. Our professional guidance and support can help ensure that your company remains fully compliant with the relevant regulations. Feel free to reach out to us for all your secretarial needs.