[ACE LR] CHAPTER 6 - NEW ISSUES OF SECURITIES

[ As at 13 July 2015 ]

PART A – GENERAL

6.01	Introduction

(1)	This Chapter sets out the requirements that must be complied with by an applicant or a listed corporation, as the case may be, for any new issue of securities.

(2)	If the new issue of securities is pursuant to or will result in a significant change in the business direction or policy of a listed corporation, the listed corporation must also comply with the requirements under this Chapter 6, where applicable.

(3)	Additional requirements relating to issuance of securities pursuant to acquisitions are set out in Chapter 10.

(4)	For the purpose of this Chapter, unless the context otherwise requires -

	(a)	a "Specified Bonus Issue" is a bonus issue of securities which - ^{FAQ 6.17, FAQ 6.18}

		(i)	is not conditional upon any other corporate proposal, or

		(ii)	is conditional upon another corporate proposal but –

			(aa)	that other corporate proposal is a subdivision or consolidation of shares; or

			(bb)	that other corporate proposal has been completed or becomes unconditional;

	(b)	a "Specified Subdivision" has the meaning given in Rule 13.04(3); and ^{FAQ 6.17, FAQ 6.18}

	(c)	a "Specified Consolidation" has the meaning given in Rule 13.14. ^{FAQ 6.17, FAQ 6.18}

PART B – ADMISSION

6.02	Admission

(1)	The Exchange will exercise discretion over the listing of new issues of securities on its Official List and may approve or reject applications for the listing of such new issues of securities, as it deems fit.

(2)	Where the Exchange approves an application for the listing of a new issue of securities, such approval may be unconditional or subject to such conditions, as it deems fit.

(3)	In granting approval for the listing of a new issue of securities by listed corporations, the Exchange considers amongst others, whether -

	(a)	the approvals of the relevant authorities have been obtained, if any;

	(b)	shareholder approval is required under these Requirements;

	(c)	the listed corporation is under consideration for possible de-listing under Chapter 16;

	(d)	the listed corporation has satisfactory corporate governance practices; ^{FAQ 6.1}

	(e)	the listed corporation has addressed all situations of conflict of interests satisfactorily; or

	(f)	the application by the listed corporation undermines public interest.

(4)	A listed corporation must submit a listing application under this Chapter to the Exchange through a Sponsor or an Adviser, as the case may be.^{FAQ 6.2}

	[ Cross reference: Guidance Note 18 ]

(5)	A listed corporation and its Sponsor or Adviser must comply with the relevant listing procedures and requirements relating to a new issue of securities as may be prescribed by the Exchange. *^{FAQ 6.3, FAQ 6.4, FAQ 6.5, FAQ 6.6, FAQ 6.7, FAQ 6.8, FAQ 6.9}*

	[ Cross reference: Guidance Note 17 ]

(6)	The listed corporation, adviser or other persons accepting responsibility for all or any part of the information and documents submitted to the Exchange in relation to any listing application must exercise due diligence and comply with the SC's Guidelines on Due Diligence Conduct for Corporate Proposals as if the submission were made to the SC.

PART C – GENERAL REQUIREMENTS FOR NEW ISSUE OF SECURITIES

6.03	Application of monies from subscription of shares paid into a trust account

A listed corporation must ensure that all monies received from any persons who have provided consideration for shares pursuant to an issue, offer for subscription or purchase, or an invitation to subscribe for or purchase, the new issue of securities must be applied in accordance with sections 215 or 243 of the CMSA, as may be applicable.

6.04	General mandate for issue of securities

(1)	Subject to Rule 6.07 and notwithstanding the existence of a resolution pursuant to section 132D of the Companies Act 1965, or in relation to a foreign corporation, a resolution of a similar nature pursuant to the relevant laws of the place of incorporation, a listed corporation must not issue any shares or convertible securities if the nominal value of those shares or convertible securities, when aggregated with the nominal value of any such shares or convertible securities issued during the preceding 12 months, exceeds 10% of the nominal value of the issued and paid-up capital (excluding treasury shares) of the listed corporation, except where the shares or convertible securities are issued with the prior shareholder approval in a general meeting of the precise terms and conditions of the issue. ^{FAQ 6.11}

(2)	In working out the number of shares or convertible securities that may be issued by a listed corporation, if the security is a convertible security, each such security is counted as the maximum number of shares into which it can be converted or exercised.

(3)	Where a general mandate for issue of securities is sought, the listed corporation must include in the statement accompanying the proposed resolution the following information: ^{FAQ 6.10}

	(a)	whether such mandate is new or a renewal;

	(b)	where such mandate is a renewal or has been sought in the preceding year, to specify the following:

		(i)	the proceeds raised from the previous mandate, if any;

		(ii)	the details and status of the utilisation of proceeds; and

	(c)	the purpose and utilisation of proceeds from the general mandate sought.

6.05	Issue of new securities under a general mandate

Subject to Rule 6.06, where issuance of shares or convertible securities is made pursuant to Rule 6.04(1), the listed corporation must ensure the following:

(a)	shares are not priced at more than 10% discount to the weighted average market price of the shares for the 5 market day immediately before the price-fixing date;

(b)	for issue of convertible securities –

	(i)	if the exercise or conversion price is fixed, such price is not more than 10% discount to the weighted average market price of the underlying shares for the 5 market days immediately before the price-fixing date; and

	(ii)	if the exercise or conversion price is based on a formula, any discount in the price-fixing formula is not more than 10% of the weighted average market price of the underlying shares for the 5 market days immediately before exercise or conversion; and

(c)	securities are not placed to –

	(i)	the interested director, interested major shareholder, interested chief executive or interested person connected with a director, major shareholder or chief executive (all as defined in Rule 6.07); and

	(ii)	nominee corporations, unless the names of the ultimate beneficiaries are disclosed.

6.06	Issue of securities with specific shareholder approval

Where an issue of shares or other convertible securities departs from any of the applicable requirements stipulated in Rule 6.05, the listed corporation must obtain the prior shareholder approval in a general meeting for the precise terms and conditions of the issue, in particular on –

(a)	the issue, exercise or conversion prices of the securities or, in a situation where such prices are to be determined after the date of shareholder approval, the basis or formula of determining such prices; and

(b)	the purposes of the issue and utilisation of proceeds.

6.07	Allotment of shares to directors etc. ^{FAQ 6.14, FAQ 6.15}

(1)	Subject to sub-Rule (1A) below, a listed corporation must ensure that it or any of its subsidiaries does not issue shares or other convertible securities to the following persons unless shareholders in general meeting have approved the specific allotment to be made to such persons:

	(a)	a director, major shareholder or chief executive of the listed corporation or a holding company of the listed corporation ("interested director", "interested major shareholder" and "interested chief executive"); or

	(b)	a person connected with an interested director, interested major shareholder or interested chief executive ("interested person connected with a director, major shareholder or chief executive").

(1A)	Sub-Rule (1) above is not applicable to an issue of securities –

	(a)	on a pro rata basis to shareholders;

	(b)	pursuant to a back-to-back placement undertaken in compliance with Rule 6.15; or

	(c)	pursuant to a Dividend Reinvestment Scheme.

(2)	Notwithstanding any provision to the contrary in these Requirements, in a meeting to obtain shareholder approval in respect of the allotment referred to under sub-Rule (1) above -

	(a)	the interested director, interested major shareholder, interested chief executive or interested person connected with a director, major shareholder or chief executive; and

	(b)	where the allotment is in favour of an interested person connected with a director, major shareholder or chief executive, such director, major shareholder or chief executive,

	must not vote on the resolution approving the said allotment. An interested director, interested major shareholder or interested chief executive must ensure that persons connected with him abstain from voting on the resolution approving the said allotment.

(3)	A listed corporation must include the following in the notice of meeting:

	(a)	the number of securities to be so allotted;

	(b)	the purpose of allotment;

	(c)	the precise terms and conditions of the allotment; and

	(d)	the identity and relationship of the persons connected with the director, major shareholder or chief executive, where applicable.

(4)	Except in the case of an issue of securities on a pro rata basis to shareholders and subject to sub-Rule (1) above, a listed corporation must ensure that its subsidiary does not issue shares or other convertible securities to a director, major shareholder or chief executive of the said subsidiary or the holding company of the said subsidiary (other than the listed corporation or a holding company of the listed corporation) or a person connected with such director, major shareholder or chief executive unless - ^{FAQ 6.13}

	(a)	the listed corporation has obtained the prior approval of its board of directors for the specific allotment to such persons;

	(b)	the board of directors of the listed corporation has ensured that the allotment is fair and reasonable to the listed corporation and in the best interests of the listed corporation; and

	(c)	the listed corporation immediately announces the specific allotment to such persons and include the following in the announcement:

		(i)	the information prescribed in sub-Rule (3) above; and

		(ii)	a statement by the board of directors of the listed corporation that the allotment is fair and reasonable to the listed corporation and in the best interests of the listed corporation. Where a director disagrees with such statement, a statement by the director setting out the reasons and the factors taken into consideration in forming that opinion.

6.08	Announcement to the Exchange ^{FAQ 6.12}

(1)	A listed corporation must include the information set out in Part A of Appendix 6A in its announcement to the Exchange relating to a proposed new issue of securities.

(2)	Where a listed corporation is undertaking an issuance and placement of securities in stages over a period of time, the listed corporation must, upon placement of the securities, immediately announce to the Exchange, the number and issue price of the securities.

6.09	Circular ^{FAQ 6.12}

(1)	A listed corporation must include the information set out in Part A of Appendix 6B in the circular to obtain the securities holder approval in respect of a new issue of securities.

(2)	The draft circular must be submitted to the Exchange for perusal together with a checklist showing compliance with Part A of Appendix 6B.

6.10	Allotment of securities, despatch of notices of allotment and quotation application in respect of a public issue

Where a listed corporation issues securities to the public, within 8 market days of the final applications date or such other period as may be prescribed by the Exchange, a listed corporation must -

(a)	issue or allot the securities;

(b)	despatch notices of allotment to the successful applicants; and

(c)	apply for the quotation of such securities, where applicable.

6.11	Document for issue of securities to be made overseas

Where an issue of securities is to be made overseas and is supported by a prospectus or other public documents, a listed corporation must ensure that the prospectus or other public documents in English are lodged with the Exchange. Such documents must be endorsed with "Specimen ‑ For Information Only."

PART D – REQUIREMENTS RELATING TO PLACEMENT

6.12	Additional Requirement

A listed corporation which intends to undertake a placement must comply with the provisions in this Part, in addition to those set out in Parts B and C of this Chapter, where applicable.

[ Cross reference: Guidance Note 17 ]

6.13	Placement agent

The Sponsor or Adviser of the listed corporation, as the case may be, must act as the placement agent for placements of securities.

6.14	Payment for securities

The listed corporation must issue and allot securities as soon as possible after the price-fixing date. In any event, the listed corporation must ensure payments for the securities are made by the placees to the listed corporation within 5 market days from the price-fixing date. For issues of securities under Rule 6.06, the price-fixing date will be taken as the date of shareholder approval, except in instances where the price is determined on a date subsequent to the shareholder approval.

6.15	Back-to-back placements

(1)	A listed corporation may undertake a back-to-back placement involving –

	(a)	an existing shareholder selling down existing shares of the listed corporation to a placement agent for subsequent placement to placees; and

	(b)	the listed corporation issuing new shares to the said existing shareholder to replace the shares sold earlier to the placement agent.

(2)	A listed corporation which undertakes a back-to-back placement must comply with the following conditions:

	(a)	the listed corporation has an average daily market capitalisation of at least RM500 million in the 3 months ending on the last business day of the calendar month immediately preceding the date of the placement;

	(b)	the listed corporation complies with the shareholding spread requirements under Rule 8.02(1) of these Requirements; and

	(c)	the listed corporation gives the Exchange a declaration from its existing shareholders involved in the back-to-back placement arrangement to the Exchange that they will not derive any financial benefit from such an arrangement, whether directly or indirectly. ^{FAQ 6.16}

6.16	Placees' details

(1)	As soon as practicable after the placement of securities and before the listing of such new issue of securities, the listed corporation's Sponsor or Adviser, as the case may be, must submit to the Exchange the following:

	(a)	the final list (broken down by each placement agent) setting out the names, home or business addresses, identity card/passport/company registration numbers, occupations/principal activities and securities account numbers of all the placees and the ultimate beneficial owners of the securities placed (in the case where the placees are nominee corporations or funds), and the amount and price of securities placed to each placee; and

	(b)	a confirmation from the Sponsor or Adviser, as the case may be, that to the best of its knowledge and belief, after having taken all reasonable steps and made all reasonable inquiries, the details set out in the final list of placees in sub-Rule (a) above are accurate and the issue or placement exercise complies with the requirements as stated in this Chapter.

(2)	The information on the ultimate beneficiaries of the securities as required in sub-Rule (1)(a) above need not be submitted for the following types of placees:

	(a)	statutory institutions managing funds belonging to general public;

	(b)	unit trust funds or collective investment schemes approved by the SC; and

	(c)	collective investment schemes which are authorised, approved or registered investment schemes incorporated, constituted or domiciled in a jurisdiction other than Malaysia and regulated by the relevant regulatory authority in that jurisdiction, subject to the listed corporation's Sponsor or Adviser, as the case may be, confirming to the Exchange that such schemes have been duly authorised, approved or registered.

6.17	Exchange's right for further information

The Exchange reserves the right to require the submission of further information on the issue or placement exercise and the placees if necessary, for establishing the propriety of the exercise and independence of the placees.

PART E – REQUIREMENTS RELATING TO A RIGHTS ISSUE

6.18	Additional requirements

A listed corporation which intends to make a rights issue of securities must comply with the provisions in this Part in addition to those set out in Parts B and C of this Chapter, where applicable.

[ Cross reference: Guidance Note 17 ]

6.19	Underwriting

(1)	Underwriting arrangements in relation to a rights issue of securities are at the discretion of the listed corporation and its Sponsor or Adviser.

(2)	The Sponsor or Adviser, as the case may be, must be part of the syndicate of underwriters for the securities offered under the rights issue if there is an underwriting arrangement.

(3)	A listed corporation must disclose in its circular to shareholders –

	(a)	the minimum level of subscription and the basis for determining the minimum level based on factors such as the level of funding required by the listed corporation; and

	(b)	the level of underwriting that has been arranged, together with justifications for the level arranged.

(4)	Where the minimum level of subscription is not achieved, the implementation of the rights issue of securities must be terminated and consideration received must be immediately returned to all subscribers.

(5)	If certain shareholders wish to irrevocably undertake to subscribe for the securities offered under the rights issue, the listed corporation must ensure that -

	(a)	the shareholders have sufficient financial resources to take up the securities, as verified by an acceptable independent party, such as the listed corporation's Sponsor or Adviser, as the case may be; and

	(b)	the shareholders consider the consequences of the rights issue with regard to the Take-Overs and Mergers Code, if applicable.

6.20	Requirements in relation to two-call rights issues

A listed corporation undertaking a two-call rights issue of securities by way of the capitalisation of reserves is subject to and must comply with the requirements set out in Rules 6.31 and 6.32 below (where applicable), subject to such adaptations, where necessary.

6.21	A rights issue must be renounceable

A listed corporation must ensure that a rights issue allows for renunciation in part of or in whole in favour of a third party at the option of the entitled security holders.

6.22	Fixing of books closing date for a rights issue

(1)	A listed corporation must not fix a books closing date to determine persons entitled to participate in a rights issue until it has -

	(a)	obtained the Exchange's approval for the issue and listing of the right issue;

	(b)	obtained shareholder approval in general meeting for the rights issue; and

	(c)	executed the underwriting agreement, where applicable.

(2)	Notwithstanding sub-Rule (1)(b) above, a listed corporation may fix a books closing date before it obtains the shareholder approval provided that -

	(a)	the listed corporation's shareholders holding more than 50% of the aggregate of the nominal amounts of all the voting shares in the listed corporation have given their written irrevocable undertaking -

		(i)	to vote in favour of the rights issue during the general meeting; and

		(ii)	that they will not dispose off or otherwise reduce their shareholdings to 50% or below in any manner until after the general meeting to approve the rights issue is duly convened and passed;

	(b)	the listed corporation has submitted to the Exchange its shareholders' irrevocable undertakings referred to in sub-Rule (a) above; and

	(c)	the listed corporation must ensure that the last day of trading on a cum entitlement basis falls at least 1 market day after the date of the general meeting.

6.23	Notice of books closing date for a rights issue

A listed corporation must ensure that the period from the date it announces the books closing date for a rights issue to the books closing date is not less than 10 market days.

6.24	Timetable for a rights issue

(1)	A listed corporation must fix the closing date for the receipt of applications for and acceptance of the new securities to be issued pursuant to a rights issue ("Rights Securities") at least 11 market days after the books closing date.

(2)	Appendix 6C illustrates the timeline for a rights issue.

6.25	Announcements of important relevant dates of a rights issue ^{FAQ 6.20}

(1)	A listed corporation must, on the same day of announcing its books closing date for a rights issue, announce all the other important relevant dates relating to such rights issue as follows:

	(a)	date for commencement of trading of the rights;

	(b)	date for despatch of abridged prospectus and subscription forms;

	(c)	date for cessation of trading of the rights;

	(d)	last date of acceptance;

	(e)	date for excess Rights Securities application;

	(f)	date for payment;

	(g)	date for announcement of final subscription result and basis of allotment of excess Rights Securities;

	(h)	listing date of the Rights Securities;

	(i)	whether the Rights Securities will be listed and quoted as the existing securities of the same class or will be separately quoted on the listing date. If the Rights Securities will be separately quoted on the listing date, to specify the entitlement that the holders of the Rights Securities will not be entitled to; and

	(j)	such other important dates as the listed corporation may deem appropriate.

(2)	A listed corporation must undertake due care and diligence when announcing the relevant dates as set out in sub-Rule (1) above. A listed corporation must immediately announce to the Exchange -

	(a)	any change to the important relevant dates as announced pursuant to sub-Rule (1) above; or

	(b)	any event that may result in the listed corporation being unable to comply with the important relevant dates as announced pursuant to sub-Rule (1) above, as soon as it becomes aware of such event,

	stating the change and reasons for such change.

6.26	Abridged Prospectus ^{FAQ 6.21}

A listed corporation must announce to the Exchange the abridged prospectus in respect of a rights issue duly registered by the SC and lodged with the Registrar of Companies, at least 1 market day before the commencement of trading of the rights.

6.27	Issue of notices of provisional allotment ^{FAQ 6.25, FAQ 6.26, FAQ 6.28}

A listed corporation must issue to the persons entitled within 2 market days, or such other period as the Exchange may approve after the books closing date -

(a)	the notices of provisional allotment; and

(b)	the rights subscription forms.

6.28	Availability of rights subscription forms

(1)	A listed corporation must make available sufficient copies of the rights subscription form at its registered office and share registrar's office to enable the acceptance of the rights.

(2)	A listed corporation must provide to each Participating Organisation a reasonable number of copies of the rights subscription form upon issue of the notices of provisional allotment and the rights subscription forms to the entitled persons.

6.29	Allotment of securities, despatch of notices of allotment and quotation application in respect of a rights issue

Within 8 market days after the final applications closing date for a rights issue or such other period as may be prescribed or allowed by the Exchange, a listed corporation must -

(a)	issue and allot the Rights Securities;

(b)	despatch notices of allotment to the allottees; and

(c)	apply for the quotation of such Rights Securities.

PART F – REQUIREMENTS IN RELATION TO A BONUS ISSUE

6.30	Additional requirements

A listed corporation which intends to make a bonus issue of securities must comply with the provisions in this Part, in addition to those set out in Parts B and C of this Chapter, where applicable.

[ Cross reference: Guidance Note 17 ]

6.31	Criteria for bonus issues

(1)	A listed corporation intending to make a bonus issue of securities must ensure that the necessary reserves required for capitalisation of the bonus issue is unimpaired by losses on a consolidated basis, where applicable, based on the listed corporation's latest audited financial statements as well as its latest quarterly report. ^{FAQ 6.35, FAQ 6.36}

(2)	Where a listed corporation intends to make a bonus issue of securities not from its retained profits, but by way of the capitalisation of reserves arising from revaluation of assets, only the surplus arising from one or more of the following may be capitalised for the purpose of the bonus issue:

	(a)	revaluation of investments in subsidiaries or associated companies. In this respect, surplus arising from the revaluation of plant, machinery and equipment of the listed corporation's subsidiaries or associated companies must not be capitalised; and

	(b)	revaluation of real estates. In this instance, at least 20% of the valuation amount of the revalued real estates must be retained in the revaluation reserves after the capitalisation for the bonus issue.

(3)	A listed corporation must ensure that the available reserves for capitalisation are adequate to cover the entire bonus issue of securities. If the reserves for capitalisation are not based on the annual audited financial statements of the listed corporation such reserves must be verified and confirmed by the external auditors or reporting accountants of the listed corporation. Where a confirmation by the external auditors or reporting accountants is required, the reserves for capitalisation, which may be adjusted for subsequent events, must be based on the latest audited financial statements or the latest quarterly report, whichever is the later. ^{FAQ 6.30, FAQ 6.31}

6.32	Valuation report for revaluation of real estates

(1)	Where the bonus issue is to be made by way of the capitalisation of reserves arising from revaluation of real estates under Rule 6.31(2)(b), a listed corporation must -

	(a)	submit 2 copies of the valuation report on the real estate concerned to the Exchange and a copy of the valuer's undertaking letter in the form of Appendix 6D immediately after the listed corporation announces the bonus issue (if available) or as soon as the valuation report is ready. In any event, the listed corporation must submit the valuation report together with the valuer's undertaking letter to the Exchange at least 1 month before it issues its circular in relation to the bonus issue; and ^{FAQ 6.32, FAQ 6.33}

	(b)	ensure that the date of valuation which forms the basis of the valuation certificate included in the circular is not more than 6 months before the date of the circular issued to shareholders.

(2)	A listed corporation and its valuer must ensure that the valuation report submitted pursuant to sub-Rule (1) above complies with these Requirements and the SC's Asset Valuation Guidelines.

(3)	If the listed corporation or the valuer becomes aware of any circumstances or significant change which has or will have a material effect on the content, validity or accuracy of its valuation report before the date of issuance of the circular, the valuer and the listed corporation must cause the valuation report to be updated. If the listed corporation fails to do so, the valuer must withdraw its consent to the inclusion of the valuation report in the circular.

(4)	Notwithstanding sub-Rule (1) above, the Exchange may, at its discretion and whenever it deems appropriate, at the cost of the listed corporation –

	(a)	obtain a second opinion on the valuation report submitted by the listed corporation from another valuer appointed by the Exchange; or ^{FAQ 6.34}

	(b)	require a listed corporation to conduct a valuation on any asset.

(5)	A listed corporation and its valuer must comply with the instruction, directive or condition imposed by the Exchange and within such timeframe as may be specified by the Exchange.

(6)	The Exchange may refer any valuation report received by the Exchange to the SC for review. The listed corporation and its valuer must provide the Exchange or the SC on a timely basis, any information or assistance required in relation to the valuation report.

(7)	For the purposes of sub-Rules 1(a), (2), (3) and (6) above, a "valuation report" includes a valuation certificate.

6.33	Staggered implementation of a bonus issue

(1)	A listed corporation may implement a bonus issue in stages over a period of time.

(2)	A listed corporation must include the information set out in Part A of Appendix 6A, in its first announcement on the bonus issue to the Exchange, where applicable. ^{FAQ 6.12}

(3)	A listed corporation must subsequently announce before each books closing date pursuant to Rule 9.19(1) and include a statement that the listed corporation has adequate reserves to implement the bonus issue in the announcements.

6.34	Ranking of bonus issue securities

The bonus issue securities must rank pari passu in all respects with the existing securities of the same class upon listing.

6.35	Fixing of books closing date for a bonus issue

A listed corporation must not fix a books closing date to determine persons entitled to participate in a bonus issue until it has obtained -

(a)	the Exchange's approval for the listing of the bonus issue; and

(b)	the shareholder approval in general meeting for the bonus issue.

6.36	Announcements in relation to a bonus issue of securities

(1)	A listed corporation must ensure that the period from the date it announces the books closing date for a bonus issue to the books closing date is not less than 10 market days.

(2)	A listed corporation must include the following when announcing the books closing date:

	(a)	the maximum number of bonus issue securities which may be listed and quoted; and

	(b)	the date of listing and quotation.

(3)	Where the bonus issue is not a Specified Bonus Issue and the date of listing and quotation referred to in sub-Rule (2)(b) above ("Relevant Date") cannot be ascertained at the time of announcement of the books closing date, the listed corporation must state that the Relevant Date is dependent upon the other corporate proposal being completed or becoming unconditional.

(4)	Where the bonus issue is a Specified Bonus Issue, a listed corporation, must, on the books closing date, announce the exact number of bonus issue securities which will be listed and quoted.

(5)	Where the bonus issue is not a Specified Bonus Issue, immediately upon the other corporate proposal being completed or becoming unconditional and the listed corporation becoming aware of or ascertaining the Relevant Date, the listed corporation must announce -

	(a)	the exact number of bonus issue securities which will be listed and quoted; and

	(b)	the Relevant Date, if not previously announced.

PART G – REQUIREMENTS RELATING TO A SHARE ISSUANCE SCHEME

6.37	Additional requirements

A listed corporation which intends to issue shares pursuant to a Share Issuance Scheme must comply with the provisions in this Part, in addition to those set out in Parts B and C of this Chapter, where applicable.

[ Cross reference: Guidance Note 17 ]
6.38	Eligibility and allocation

(1)	Subject to the provisions set out in sub-Rules (2) and (3) below and Rule 6.45, the board of directors of the listed corporation may determine the eligibility and allocation criteria under a Share Issuance Scheme.

(2)	The listed corporation must ensure that participation in the scheme is restricted to directors and employees of the listed corporation's group.

(3)	The listed corporation must also ensure that -

	(a)	its directors and senior management do not participate in the deliberation or discussion of their own allocation; and

	(b)	the allocation to a director or employee who, either singly or collectively through persons connected with the director or employee, holds 20% or more of the issued and paid-up capital (excluding treasury shares) of the listed corporation, does not exceed 10% of the total number of shares to be issued under the scheme.

(4)	For the purpose of sub-Rules (2) and (3) above, unless the context otherwise requires -

	(a)	"group" means the listed corporation and its subsidiaries which are not dormant; and

	(b)	"persons connected with an employee" has the meaning given in relation to persons connected with a director or major shareholder as defined in Rule 1.01.

6.39	Number of shares

(1)	The listed corporation must ensure that the total number of shares to be issued under a Share Issuance Scheme is not more than 30% of its issued and paid-up capital (excluding treasury shares) at any one time. ^{FAQ 6.38, FAQ 6.39}

(2)	For the purpose of sub-Rule (1) above, where a listed corporation purchases its own shares or undertakes any other corporate proposal resulting in the total number of shares to be issued under the scheme exceeding 30% of its issued and paid-up capital (excluding treasury shares), no further options can be offered until the total number of shares to be issued under the scheme falls below 30% of its issued and paid-up capital (excluding treasury shares).

6.40	Pricing

The price payable for the shares under a Share Issuance Scheme must be -

(a)	for an applicant implementing the scheme as part of its listing proposal, not less than the initial public offer price; or

(b)	for a listed corporation, based on the 5-day weighted average market price of the underlying shares at the time the option is offered, with a discount of not more than 10%.

6.41	Duration

A listed corporation must ensure that a Share Issuance Scheme is for a duration of not more than 10 years.

6.42	Adjustments

A listed corporation must comply with the following as regards adjustments of price or number of shares to be issued under a Share Issuance Scheme:

(a)	a scheme may provide for adjustment of the subscription or option price or the number of shares (excluding options already exercised) under the scheme, in the event of a capitalisation issue, rights issue, bonus issue, consolidation or subdivision of shares, capital reduction or any other variation of capital;

(b)	any adjustments made must be in compliance with the provisions for adjustment as provided in the bylaws of the scheme;

(c)	the issue of securities as consideration for an acquisition, pursuant to a special issue or private placement must not be regarded as a circumstance requiring such adjustments; and

(d)	adjustments other than on a bonus issue must be confirmed in writing either by the external auditors or the Sponsor or Adviser, as the case may be, of the listed corporation. ^{FAQ 6.37}

6.43	Bylaws

(1)	A listed corporation must include the provisions set out in Appendix 6E in the bylaws of a Share Issuance Scheme.

(2)	The listed corporation must submit the final copy of the bylaws of the share scheme to the Exchange together with a letter of compliance pursuant to Rule 2.12 and a checklist showing compliance with Appendix 6E. ^{FAQ 2.2, FAQ 2.3, FAQ 2.4, FAQ 2.5}

6.44	Implementation

(1)	The effective date for the implementation of the scheme will be the date of full compliance with all relevant requirements in this Chapter including -

	(a)	submission of the final copy of the bylaws of the scheme to the Exchange pursuant to Rule 6.43;

	(b)	receipt of approval or approval-in-principle, as the case may be, for the issuance and listing of the shares to be issued under the scheme from the Exchange;

	(c)	procurement of shareholder approval for the scheme;

	(d)	receipt of approval of any other relevant authorities, where applicable; and

	(e)	fulfilment of any conditions attached to the above approvals, if any.

(2)	The listed corporation's Sponsor or Adviser, as the case may be, must submit a confirmation to the Exchange of full compliance pursuant to sub-Rule (1) above stating the effective date of implementation together with a certified true copy of the relevant resolution passed by shareholders in general meeting.

(3)	The submission of the confirmation must be made not later than 5 market days after the effective date of implementation.

6.45	Share Issuance Scheme after listing ^{FAQ 6.40}

(1)	A listed corporation must ensure that all schemes that it implements which involve the issue of shares to employees comply with the following:

	(a)	the scheme is approved by the shareholders of the listed corporation in general meeting;

	(b)	the resolution approves a specific scheme and refers either to the scheme itself or to a summary of its principal terms included in the circular which contains all the provisions set out in Appendix 6E;

	(c)	unless the shares subject to the scheme are identical with other listed shares they are separately designated; and

	(d)	where directors of the listed corporation are trustees of the scheme or have an interest, direct or indirect, in the scheme, the circular discloses that interest; and

(2)	Sub-Rule (1) does not apply to -

	an applicant that is implementing a Share Issuance Scheme as part of its listing proposal; and

6.46	Allotment of shares, despatch of notices of allotment and quotation application in respect of a Share Issuance Scheme

Within 8 market days after the date of receipt of a notice of the exercise of the option together with the requisite payment or such other period as may be prescribed or allowed by the Exchange, a listed corporation must -

(a)	issue and/or allot shares;

(b)	despatch a notice of allotment to the employee of the listed corporation; and

(c)	apply for the quotation of such shares.

PART G(A) – DIVIDEND REINVESTMENT SCHEME

6.46A	Additional requirements

(1)	A listed corporation which intends to issue shares pursuant to a Dividend Reinvestment Scheme must comply with the provisions in this Part, in addition to those set out in Parts B and C of this Chapter, where applicable.

(2)	For the avoidance of doubt, this Part is not applicable to a distribution of dividend in specie.

6.46B	Shareholder's approval

Where a listed corporation intends to undertake a Dividend Reinvestment Scheme, the listed corporation must –

(a)	issue a circular to its shareholders which includes the following:

	(i)	whether there is any tax implication if a shareholder elects to reinvest the cash dividend into new shares, or an appropriate negative statement;

	(ii)	whether a shareholder who elects to reinvest the cash dividend into new shares will receive odd lots; and

	(iii)	a statement that a shareholder who elects to reinvest the cash dividend into new shares under the scheme may be required to comply with the Take-Overs and Mergers Code; and

(b)	obtain shareholders' approval for the scheme.

6.46C	Eligibility and election of entitlement

(1)	Where a listed corporation intends to undertake a Dividend Reinvestment Scheme, it must allow all its shareholders who are entitled to dividend to participate in the Dividend Reinvestment Scheme. ^{FAQ 6.41}

(2)	The listed corporation must allow such shareholders to elect whether to participate in the Dividend Reinvestment Scheme and give them at least 14 days from the dispatch of the election notice to submit the completed election notice.

(3)	The listed corporation must include in the election notice the following statements:

	(a)	that the shareholders must elect positively in order to participate in a Dividend Reinvestment Scheme, and to reinvest their cash dividends into new shares for their dividend entitlement;

	(b)	that if no election is made, the listed corporation will automatically pay the dividends in cash to the shareholders concerned; and

	(c)	that the shareholders can choose to receive the entitlement partly in cash and partly in shares, or wholly in cash or shares.

(4)	The listed corporation must include in the statement accompanying the election notice, the following information:

	(a)	a statement of the total number of shares that would be issued if all eligible shareholders were to elect to reinvest their cash dividends into new shares for their entire entitlement, and the percentage which that number represents of the issued and paid-up capital (excluding treasury shares) as at the books closing date; and

	(b)	that any fractional entitlements arising from the allotment of new shares pursuant to the scheme will be settled in cash.

6.46D	Pricing

(1)	The listed corporation must ensure that the shares allotted pursuant to a Dividend Reinvestment Scheme are not priced at more than 10% discount to the weighted average market price of the shares for the 5 market days immediately before the price-fixing date.

(2)	The listed corporation must announce the issue price of the shares before or when it announces to the Exchange its intention to fix a books closing date under Rule 9.19(1).

PART H – REQUIREMENTS RELATING TO AN ISSUE OF DEBT SECURITIES AND REDEEMABLE PREFERENCE SHARES

6.47	Requirements relating to debt securities

(1)	A listed corporation which intends to list debt securities must comply with Chapter 4B of Bursa Malaysia Securities Berhad Main Market Listing Requirements, in addition to those set out in Parts B, C and E of this Chapter, where applicable.

6.47A	Requirements relating to redeemable preference shares

(1)	A listed corporation which intends to list its redeemable preference shares must comply with Parts B, C, and E of this Chapter, where applicable..

	[ Cross reference: Guidance Note 17 ]

6.48	[Deleted]

6.49	Announcement relating to an issue of debt securities

In addition to the information set out in Part A of Appendix 6A, a listed corporation must include the information set out in Part B of Appendix 6A in its announcement to the Exchange relating to a proposed issue of debt securities. ^{FAQ 6.12}

PART I – REQUIREMENTS RELATING TO AN ISSUE OF CONVERTIBLE SECURITIES

6.50	Requirements relating to convertible securities

A listed corporation which intends to issue convertible securities must comply with the provisions in this Part, in addition to those set out in Parts B, C and E of this Chapter, where applicable.

[ Cross reference: Guidance Note 17 ]

6.51	Maximum number of new shares allowed from exercise of warrants

A listed corporation must ensure that the number of new shares which will arise from all outstanding warrants, when exercised, does not exceed 50% of the issued and paid-up capital of the listed corporation (excluding treasury shares and before the exercise of the warrants) at all times.

6.52	Holders of convertible securities

A listed corporation seeking a listing of its convertible securities must have at least 100 holders of such securities holding not less than 1 board lot of the convertible securities each.

6.53	Announcement relating to an issue of convertible securities

In addition to the information set out in Part A of Appendix 6A, a listed corporation must include the information set out in Part C of Appendix 6A in its announcement to the Exchange relating to a proposed issue of convertible securities, where applicable. ^{FAQ 6.12}

6.54	Circular relating to an issue of convertible securities

(1)	In addition to the information set out in Part A of Appendix 6B, a listed corporation must ensure that the circular to the securities holders of the listed corporation to obtain the securities holders approval in respect of an issue of convertible securities, includes the information set out in Part B of Appendix 6B.

(2)	The draft circular must be submitted to the Exchange for perusal together with a checklist showing compliance with Parts A and B of Appendix 6B.

6.55	Deed poll and trust deed to comply with Requirements

(1)	A listed corporation must furnish to the Exchange a letter of compliance pursuant to Rule 2.12 together with the deed poll or trust deed, as the case may be. ^{FAQ 2.2, FAQ 2.3, FAQ 2.4, FAQ 2.5}

(2)	A listed corporation must ensure that the deed poll or trust deed includes the various provisions set out in Appendix 6F.

(3)	A deed poll or trust deed must not include any provision for –

	(a)	the extension or shortening of tenure of the convertible securities; or

	(b)	changes to the number of shares received for the exercise or conversion of each convertible security or changes to the pricing mechanism for the exercise or conversion price of the convertible security, except where these changes are adjustments following capitalisation issues, rights issue, consolidation or subdivision of shares or capital reduction exercises.

6.56	No alteration or adjustment to the terms

A listed corporation must ensure that no alteration or adjustment is made to the terms of the convertible securities during the tenure of the securities, unless such alteration or adjustment is provided upfront in the deed poll or trust deed governing the securities.

6.57	Consequential securities

(1)	Where a listed corporation intends to issue convertible securities arising from adjustments due to an issue of securities or a subdivision or consolidation of shares (referred to as "consequential securities" and "principal securities" respectively) -

	(a)	the consequential securities must be listed and quoted simultaneously with the principal securities;

	(b)	the listed corporation must ensure that the period from the date it announces the books closing date for the consequential securities to the books closing date is not less than 10 market days; and

	(c)	the listed corporation must submit the additional listing application pursuant to Guidance Note 17.

(2)	Where the consequential securities are due to -

	(a)	a bonus issue of securities; or

	(b)	a Specified Subdivision or Specified Consolidation;

	the following applies:

	(i)	a listed corporation need not submit to the Exchange any quotation application for the consequential securities;

	(ii)	when announcing the books closing date, a listed corporation must include -

		(aa)	the maximum number of consequential securities which may be listed and quoted; and

		(bb)	the date of listing and quotation; and

	(iii)	the listed corporation must, on the books closing date, announce to the Exchange the exact number of consequential securities which will be listed and quoted.

(3)	Where the consequential securities are not due to a Specified Bonus Issue -

	(a)	in relation to the announcement referred to in sub-Rule 2(ii) above, if the date of listing and quotation ("Relevant Date") cannot be ascertained at this time, the listed corporation must state that the Relevant Date is dependent upon the other corporate proposal being completed or becoming unconditional;

	(b)	sub-Rule 2(iii) above does not apply; and

	(c)	immediately upon the other corporate proposal being completed or becoming unconditional and the listed corporation becoming aware of or ascertaining the Relevant Date, the listed corporation must announce to the Exchange -

		(i)	the exact number of consequential securities which will be listed and quoted; and

		(ii)	the Relevant Date, if not previously announced.

6.58	Notices of conversion or exercise

A listed corporation must include the following in a notice of conversion or exercise in respect of convertible securities:

(a)	the full title of the security;

(b)	the maturity date;

(c)	the conversion or exercise price;

(d)	the conversion or exercise period;

(e)	the mode of payment of the exercise price; and

(f)	the treatment of the security at maturity.

6.59	Allotment of securities, despatch of notices of allotment and quotation application in respect of conversion or exercise

Within 8 market days after the date of receipt of a subscription form together with the requisite payment or such other period as may be prescribed or allowed by the Exchange, a listed corporation must -

(a)	issue and/or allot the securities arising from the conversion or exercise of the convertible security; and

(b)	despatch a notice of allotment to the holder of the convertible security; and

(c)	apply for the quotation of such securities.

PART J – IMPLEMENTATION OF PROPOSAL

6.60	Implementation deadline

(1)	Subject to sub-Rule (2) below, a listed corporation must complete the implementation of a proposal relating to an issuance of securities ("Issuance Proposal") within 6 months from the date the listing application is approved by the Exchange.

(2)	For cases which involve court proceedings, a listed corporation has up to 12 months from the date the listing application is approved by the Exchange to complete the implementation of an Issuance Proposal.

(3)	Where the listed corporation has submitted a request for a review of the Exchange's decision, the time period to complete the implementation of an Issuance Proposal will commence from the date on which the decision on the review is conveyed to the listed corporation.

(4)	If the listed corporation fails to complete the implementation of an Issuance Proposal within the prescribed periods above, the Exchange's approvals given in regard to the Issuance Proposal will lapse.

6.61	Extension of implementation time

(1)	The Exchange may, upon a listed corporation's application, in exceptional cases grant an extension of time for a listed corporation to complete an Issuance Proposal. The listed corporation must apply for an extension through its Sponsor or Adviser, as the case may be, no later than 14 days before the Exchange's approval to the listing application expires. The listed corporation must fully justify its application.

(2)	All applications for an extension of time for completion of the Issuance Proposal under this Rule must be accompanied by a confirmation letter by the directors of the listed corporation that, save as disclosed, there has been no material change or development in the circumstances and information relating to the Issuance Proposal.

(3)	Where the Exchange's approval is subject to certain conditions which must be fulfilled within a specified period of time, any application for an extension of time to fulfill the conditions must be fully justified and must be not later than 14 days before the expiry of the specified period.

6.62	Post-implementation obligations

(1)	A listed corporation and its Sponsor or Adviser, must inform the Exchange the dates of completion for all approved Issuance Proposal.

(2)	The listed corporation and its Sponsor or Adviser, must furnish the Exchange with a written confirmation of its compliance with terms and conditions of the Exchange's approval once the Issuance Proposal has been completed.

(3)	The listed corporation and its Sponsor or Adviser, must submit the actual figures once determined where an indicative issue price or number of securities to be issued are provided in the listing application for the Issuance Proposal.

[ End of Chapter ] Back to Top

Appendix 6A
Appendix 6B
Appendix 6C
Appendix 6D
Appendix 6E
Appendix 6F

[ACE LR] CHAPTER 6 - NEW ISSUES OF SECURITIES // <![CDATA[ _spBodyOnLoadFunctionNames.push("setupPageDescriptionCallout"); // ]]>

[ACE LR] CHAPTER 6 - NEW ISSUES OF SECURITIES