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FREQUENTLY-ASKED QUESTIONS
Prospectus Guidelines |
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| 1) | What is the role of the Securities Commission (SC) in relation to prospectuses? | |
| 2) | What is the role of the Companies Commission of Malaysia (CCM) and the existing provisions on the content of the prospectus under the Companies Act, 1965 (CA)? | |
| 3) | What are the instances where a public offering prospectus, abridged prospectus and supplementary prospectus is required to be registered by the SC? | |
| 4) | What are the differences in respect of disclosure requirements of a public offering prospectus and an abridged prospectus? | |
| 5) | Would the issuance of an information memorandum be deemed to be a prospectus? Is it required to comply with the Prospectus Guidelines, be lodged and registered with the SC? | |
| 6) | What criteria will SC look at when considering granting a waiver/ relief with respect to the form and content of a prospectus? | |
| 7) | What are the circumstances for refusal of registration of a prospectus? | |
| 8) | What is the rationale behind the revision of the Prospectus Guidelines, (which would come into effect on 1 May 2003)? | |
| 9) | How will the industry and investors benefit from the revised Guidelines? | |
| 10) | What is a post-vetting regime for prospectuses and how does it differ from the pre-vetting regime? | |
| 11) | With the advent of the post-vetting regime (for registration of abridged prospectuses), is there any avenue for the issuer to seek waiver/relief from the Guidelines? | |
| 12) | Under the post-vetting regime, there is a higher probability of stop-orders being issued against defective/ errant prospectuses after registration. Will stop-orders interrupt the market (as pricing will be affected) or likewise cause uncertainty for the issuers and the investors, given that the issue/offer can be halted at any time after registration of the prospectus? | |
| 13) | What enhancement of prospectus disclosure requirements, are noteworthy? | |
| 14) | What are the new disclosure requirements that have been introduced/ incorporated into the new Guidelines in respect of related-party transactions? | |
| 15) | How has the chapter on related party transactions been rationalised? | |
| 16) | What additional information is now required (under the new Guidelines) in the Directors’ Report? | |
| 17) | Under what circumstances are Valuation Certificates required for inclusion in prospectuses and are such certificates applicable to valuations involving land and buildings only? | |
| 18) | What are the major amendments made to the requirements of the Valuation Certificate? | |
| 19) | Under the new Guidelines what other information pertaining to utilisation of proceeds is required to be disclosed in the AP? | |
| 20) | The revised Guidelines have incorporated the requirements pertaining to contents of prospectus for debentures. Apart from the consolidation of the requirements into a single document, are there any additional features not found under the SC’s previous guidelines on contents of prospectus for debentures? | |
| 21) | What other notable disclosure requirements have been integrated into the single revised Prospectus Guidelines? | |
Property Asset Valuations |
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| General | ||
| 1) | Are valuation reports still required to be prepared for property assets that do not fall under the category of "identified assets" or parameters for approval of corporate proposals under the Issues Guidelines? | |
| 2) | Will any assessment be conducted on valuation reports carried out on property assets for corporate proposals that fall under the declaratory approach? | |
| 3) | When does the SC seek a second opinion? | |
| 4) | In cases where the valuation involves large number of supporting documents such as copies of titles, tenancy agreements, sale and purchase agreements etc, how should the Valuer address these issues? | |
Plant, Machinery & Equipment |
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| 1) | What is plant, machinery and equipment (PME)? | |
| 2) | When can the revaluation/valuation of plant, machinery and equipment be used in corporate proposal? | |
| 3) | In the case of very specialized plant, machinery and equipment where local expertise may not be available, can the SC accept valuation prepared by foreign experts? | |
Forest Assessment Reports |
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| 1) | When does the SC require Forest Assessment Reports to be carried out? | |
| 2) | Who can carry out the Forest Assessment Reports? | |
| 3) | What is the validity period of the Forest Assessment Reports? | |
Valuation Certificate |
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| Please refer to FAQs under Prospectus Guidelines. | ||
Technical Issues |
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| 1) | Valuation of Development Rights | |
The Malaysian Code on Take-Overs and Mergers 1998 (the Code) |
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| Application of Sections 32 and 36 of the Malaysian code on Take-overs and Mergers 1998 (the Code) on nominee companies | ||
| 1) | Would the SC consider exempting a nominee company who acts as mere bare trustee of a pool of beneficial owners of shares in a particular company, from the definition of a "substantial shareholder" for the purpose of disclosure requirements under Sections 32 and 36 of the Code? | |
| 2) | Is the SC's approval required for the above-mentioned exemption? | |
| 3) | Would the SC's new policy on the application of the definition "substantial shareholder" on nominee companies, negate the obligation of the ultimate beneficial owners of shares under the accounts of the nominee companies who act as mere bare trustees, from the disclosure requirements under the Code? | |
| 4) | What is the substantial-shareholding threshold for the purpose of disclosure requirements under Sections 32 and 36 of the Code? | |
| 5) | Would purchase/acquisition of voting shares which has been previously exempted from a mandatory offer (MO) obligation under the Code (the first exempted transaction), amount to a "disqualifying transaction" in the consideration of a subsequent application for exemption under PN2.9.1 of the Code, which arises from a transaction that follows shortly after the first-exempted transaction ? | |
| 6) | How does the requirements under Practice Note (PN) 2.2 of the Code apply? | |
| 7) | Would PN 2.2 be applicable to a person, whom already having effective control in an upstream entity, further acquires voting shares in such upstream entity? | |
| 8) | Would MO obligation apply to a person in both upstream and downstream companies arising from him acquiring control in the upstream company, a private company that does not fall within PN 1.2 of the Code but has a controlling stake in the downstream company? | |
| 9) | Would the disapplication of the mandatory offer provisions under subsection 6(2)(a) of the Malaysian Code on Take-overs and Mergers 1998 (Code) apply to a situation where promoters/substantial shareholders intend to consolidate their shareholding of more than 33% of voting shares into a holding company, prior to the issuance of a prospectus for an initial public offer of voting shares whereby the shares were initially allotted to the promoters/substantial shareholders in accordance with a proposal pursuant to a listing exercise? | |
| 10) | What information should be included in the undertaking letter from the remaining shareholders of an acquiree company, to be submitted by an applicant, for the purpose of an application for exemption from the mandatory offer (MO) obligation under Practice Note (PN) 2.9.6 of the Malaysian Code on Take-overs and Mergers 1998 (Code)? | |
| Exemption from mandatory offer obligation arising from the exercise / conversion of convertibles in the indefinite future | ||
| 11) | Would SC consider, in advance, an application for exemption from a mandatory offer obligation arising from the exercise / conversion of convertibles in the indefinite future? | |
Clarification on the application of Section 6(2)(a) of the Code |
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| Further flexibility to the application of section 20(5) of the Take-overs Code, in respect of settlement period of offer consideration | ||
Collective Investment Schemes |
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| 1) | What is the difference between paragraph 2.0 (1) and 2.0 (2) of Schedule C, Appendix I of the Guidelines on Unit Trust Funds (Guidelines)? | |
| 2) | Clarification on Clause 10.10(1) of the Guidelines on Unit Trust Funds (Guidelines) | |
| 3) | Does the definition of liquid assets in the Guidelines on Unit Trust Funds (Guidelines) also include all receivables and payables? | |
| 4) | Is the breach of Clause 11.09 (1) of the Guidelines on Unit Trust Funds (Guidelines) due to the non-availability of data or the absence of daily monitoring considered acceptable? | |
| 5) | What are bonus units? | |
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| 7) | What type of transaction cost factor or expense allowance is allowed under Clause 11.02 (7) of the Guidelines on Unit Trust Funds? | |
| 8) | What type of material costs involved in the disposal of investments is allowed under Clause 11.03 (6) of the Guidelines on Unit Trust Funds (Guidelines)? | |
| 9) | To what extent amendments / insertions may be made to a prospectus or deed after the Securities Commission (SC) has issued the no further comment letter? | |
| 10) | The definition of group of companies in the Guidelines on Unit Trust Funds (Guidelines) means “any company and its related corporations”. How to categorize a company to be a related corporation? | |
| 11) | Is there a need for an application form to be attached for regular investment plans? | |
| 12) | Does the definition of “securities” in Section 2 (Interpretation) of the Securities Commission Act (SCA) 1993 cover warrants? | |
| 13) | What changes deemed material by the Securities Commission that would require the issuance of a supplementary prospectus? | |
| 14) | Who can provide the independent verification for investment performance as required by Clause 4.13 of the Guidelines on Unit Trust Advertisements and Promotional Materials “....independently sourced or independently verified.... by a recognized financial and statistical reporting service”? | |
| 15) | Are the designated person in charge of compliance of management companies allowed to provide the independent verification for investment performance as required by Clause 4.13 of the Guidelines on Unit Trust Advertisements and Promotional Materials? | |
| 16) | Are trustees considered qualified and independent of management companies to provide the independent verification as required by Clause 4.13 of the Guidelines on Unit Trust Advertisements and Promotional Materials? | |
| 17) | Can the date of the Prospectus be omitted from the warning statement / disclaimer in promotional materials such as banners and posters? | |
| 18) | Are management companies required to re-submit to the Securities Commission (SC) advertising and promotional materials which were first published as posters and duly submitted to the SC for post-vetting, if the same materials are subsequently published in the newspaper? | |
| 19) | Is there a validity period after an individual has successfully passed Modules 9 and 10 “Licensing Examination for Fund Manager’s Representative” before he / she has to be appointed as a designated person in a unit trust management company? | |
| 20) | Should reference be made to Net Asset Value (NAV) when disclosing past distribution payments in advertisements and/or promotional material? | |
Disclosure of interest in securities - Section 99B SIA |
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Securities Industry (Reporting of Substantial Shareholding) Regulations 1998 |
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General |
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| 1) | What type of exchanges are regulated by the SC? | |
