The Approval Process of Private Debt Securities in Malaysia

The SC regulates the issue and offer of private debt securities (PDS) in Malaysia and is the sole approving authority for prospectuses (other than prospectuses issued by unlisted recreational clubs). The SC will complete its evaluation within the following stipulated time periods:

• The approval period for corporate proposals involving the issue/offer of conventional private debt securities and Islamic securities is within 14 working days from the date of submission, subject to full and complete information being received;

• The approval period for corporate proposals involving asset-backed securitisation (ABS) is within 28 working days from the date of submission, subject to full and complete information being received; and

• Proposals involving the issue/offer of PDS by multilateral institutions and quasi-sovereign institutions and the issuance of structured products by eligible issuers are treated as being deemed approved upon the receipt of complete submission of the relevant proposals to the SC.

The SC ensures that all submissions for the proposed issuance of PDS and Islamic securities are in compliance with its guidelines and practice notes. Strong emphasis is given to full and adequate disclosures of material information given to prospective investors, to assist them in making informed decisions for their investments.

In the case of an ABS proposal, where the assets to be securitised include real property, the SC will review the valuations of the respective properties, as prepared and submitted by the professional valuation firm, so as to ensure the valuations are reasonable and in the best interest of investors. Any submission for such valuations must be in compliance with the Guidelines on Asset Valuation and other applicable valuation standards.

The SC will also ensure that any issuances/offers of Islamic securities are Shariah compliant and consistent with the principles as approved by the Shariah Advisory Council. As matters governing and application of Shariah principles are complex and complicated, pre-submission consultations with the SC are highly encouraged. Issuers are further encouraged to internationalise the issuance process by structuring the issuance based on globally-accepted Shariah principles, thereby stamping and entrenching Malaysia's position as the most advanced and developed Islamic financial centre within the global financial scene.

In assessing a PDS application, there is a vigorous internal challenge process to ensure thoroughness, consistency, transparency and accountability within the process. There is also much communication between the principal advisers and the SC, right from the pre-submission consultations stage through to post-decision meetings.