What New Listed Companies Should Be Aware of When Listed on Bursa Malaysia Main Market

Listing on the Main Market of Bursa Malaysia is a significant milestone for any company, offering greater visibility, access to capital, and enhanced scrutiny. This transition requires a thorough understanding of various aspects, particularly corporate governance codes and other regulatory requirements. This article delves into the key areas that new listed companies need to be aware of when listing on Bursa Malaysia Main Market.

1. Corporate Governance Code

Malaysian Code on Corporate Governance (MCCG)

Companies must adhere to the MCCG, which emphasizes the importance of board leadership, audit and risk management, and integrity in corporate reporting. The MCCG provides a framework for companies to implement high standards of corporate governance.

Board Diversity

The MCCG advocates for a diverse board composition, including gender diversity, to enhance decision-making and governance. A diverse board brings varied perspectives and experiences, which can lead to more effective oversight and decision-making.

Stakeholder Engagement

Companies are encouraged to engage with stakeholders regularly and disclose their engagement activities. Effective stakeholder engagement helps companies understand stakeholder concerns and incorporate their feedback into corporate strategies.

2. Financial Reporting and Disclosure

Financial Reporting

Companies must prepare annual financial statements in accordance with Malaysian Financial Reporting Standards (MFRS) and disclose them to the public. Accurate financial reporting is essential for maintaining investor confidence and regulatory compliance.

Periodic Reports

Quarterly financial results must be submitted to Bursa Malaysia within two months after the end of each financial quarter. Timely reporting ensures that investors have up-to-date information about the company’s financial performance.

Continuous Disclosure

Companies are required to disclose any material information that may affect the share price or investor decisions promptly. Continuous disclosure ensures transparency and allows investors to make informed decisions.

3. Internal Controls and Risk Management

Risk Management and Internal Control Framework

Companies must establish a sound risk management and internal control framework, as recommended by the MCCG. A robust framework helps companies identify, assess, and mitigate risks effectively.

Internal Audit

An internal audit function must be established to provide independent assurance on the effectiveness of risk management and internal control processes. The internal audit function plays a crucial role in ensuring the reliability of financial reporting and compliance with regulations.

Board Oversight

The board of directors is responsible for reviewing the adequacy and effectiveness of the company's internal control system and risk management framework. Effective board oversight helps ensure that the company’s risk management practices are aligned with its strategic objectives.

4. Shareholder Rights and Corporate Actions

General Meetings

Companies must conduct general meetings in accordance with the requirements of the Companies Act 2016 and Bursa Malaysia's Listing Requirements. General meetings provide shareholders with an opportunity to participate in decision-making and express their views on important matters.

Minority Shareholder Protection

The MCCG and Malaysian regulations emphasize the protection of minority shareholders' rights, ensuring they have a voice in key corporate decisions. Protecting minority shareholder rights helps maintain investor confidence and promotes fair treatment of all shareholders.

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5. Sustainability and ESG Reporting

Sustainability Statement

Companies are required to include a Sustainability Statement in their annual reports, detailing their sustainability practices and performance. The Sustainability Statement provides transparency on how the company is addressing environmental and social challenges.

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ESG Integration

The MCCG encourages companies to integrate ESG considerations into their business strategies and decision-making processes. Integrating ESG factors helps companies manage risks and opportunities related to sustainability.

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6. Regulatory Compliance

Bursa Malaysia Listing Requirements

Companies must comply with the Main Market Listing Requirements, which cover a wide range of topics, including corporate governance, financial reporting, and disclosure. Compliance with listing requirements is essential for maintaining market integrity and investor confidence.

Securities Commission Malaysia (SC) Guidelines

Companies must adhere to the guidelines issued by the SC, which oversee the regulation of securities markets in Malaysia. The SC guidelines provide a framework for ensuring transparency, accountability, and fairness in the securities market.

Conclusion

Listing on the Main Market of Bursa Malaysia brings significant opportunities but also comes with increased responsibilities. New listed companies must ensure they understand and comply with the relevant corporate governance codes, financial reporting and disclosure requirements, internal controls and risk management practices, shareholder rights, sustainability and ESG reporting, and regulatory compliance. By adhering to these guidelines and implementing robust governance frameworks, companies can enhance their credibility, attract investors, and achieve long-term success.