The Securities Commission is considering allowing a broader range of advisers, including startup accelerators and venture capitalists, for LEAP Market listings on Bursa Malaysia, aiming to diversify and enhance advisory support for SMEs as part of its 2024-2028 roadmap.
23 May 2024 – The Securities Commission (SC) is contemplating a significant change in the advisory landscape for LEAP Market listings on Bursa Malaysia by allowing startup accelerators and venture capitalists, among others, to serve as approved advisers. This move aims to diversify the pool of listing advisers, enhancing the support available for small- to medium-sized enterprises (SMEs) seeking public listing and fundraising opportunities.
Announced in the SC’s “Catalysing MSME and MTC Access to the Capital Market: Five-Year Roadmap,” the regulator will review the regulatory requirements related to the eligibility criteria for approved advisers. This initiative is part of the SC’s broader 2024-2028 roadmap targeting micro, small, and medium enterprises (MSMEs), as well as mid-tiered companies (MTCs).
Currently, a company looking to list on the LEAP Market must appoint an adviser licensed by the SC and registered with Bursa Malaysia. These advisers are responsible for evaluating the suitability of applicants, submitting initial listing applications, preparing information memorandums, and ensuring compliance with post-listing requirements. By potentially including legal and accounting firms, startup accelerators, remisiers, venture capital, and private equity players, the SC aims to foster a more competitive market and provide a broader pool of expertise to support SMEs.
“This will encourage a more competitive market in the advisor space, and a better pool of expertise to provide support services for the SMEs,” stated the SC.
The LEAP Market, established in 2017 as the third board on Bursa Malaysia, provides SMEs with a platform for public listing and fundraising. The SC’s roadmap sets a goal to help MSMEs and MTCs raise RM40 billion from the capital markets by 2028. The SC estimates that up to 28,000 MSMEs and MTCs, generating annual sales under RM500 million, have the potential to tap into the capital market.
Additionally, the SC plans to introduce alternative remuneration methods for advisers to provide financial management flexibility and help financially strained SMEs reduce their cash outflows. One such method includes fee payments in the form of equity, accompanied by safeguards to mitigate conflicts of interest, such as moratoriums and limits on the adviser’s stake in the company.
