This article first appeared in The Edge Malaysia Weekly on February 2, 2026 - February 8, 2026

Malaysia’s regulatory framework requires a minimum public shareholding spread of 25%, which is one of the highest thresholds in the region. Disclosure standards and transparency levels in our market remain robust, and there has been no indication of any review or change to the way MSCI assesses free float for Malaysian securities. Overall, this development does not impact Malaysia’s market structure, transparency or free float practices.

Bursa Malaysia’s Main Market and ACE Market Listing Requirements prescribe clear requirements on the public shareholding spread to ensure a fair, transparent and orderly marketplace. These include:

i.  At the point of listing, companies must have at least 25% of the total number of shares held by the public, with a minimum of 1,000 public shareholders for Main Market and 200 public shareholders for ACE Market, each holding at least 100 shares.

ii. On a continuing basis, listed issuers must also maintain a minimum public shareholding spread of 25%.

These requirements are fundamental to safeguarding market integrity. Maintaining an appropriate level of public shareholding spread helps to minimise the risk of trading irregularities, so that the listed issuers’ securities are less susceptible to market manipulation.

At the same time, Bursa Malaysia recognises that there are circumstances which may warrant a lower public shareholding spread. In view of this, Bursa Malaysia may accept a lower public shareholding spread under the listing requirements, provided that such lower percentage is sufficient for a liquid market in line with the key objective of the public shareholding spread requirement, without compromising on the maintenance of an orderly and fair market.

In exercising the discretion to grant a lower public shareholding spread, Bursa Malaysia is guided by the criteria spelt out in Practice Note 19/Guidance Note 13 of the listing requirements. In essence, Bursa Malaysia may accept a lower public shareholding spread only if the objective and subjective criteria are satisfied:

a.  The objective criteria are predicated on the fulfilment of market capitalisation requirements as follows:

b.  The subjective criteria take into account sufficient liquidity, orderly trading of securities, and good corporate governance and compliance records of the applicant/listed issuer.

Our focus is to ensure a fair and orderly market. Other markets such as those in Hong Kong and the UK have similar frameworks in accommodating lower public shareholding spreads.

While Bursa Malaysia may grant flexibility to have a lower public shareholding spread requirement to a listed issuer, issuers are advised to use their best endeavour to increase the public shareholding spread to 25% or more to create more trading liquidity.

Likewise, if there is any evidence of trading activities that lead to irregularities in trading which is susceptible to market manipulation, Bursa Malaysia reserves the right to revoke the flexibility of having a lower public shareholding spread.

MSCI assesses the investability of a company using a broad set of criteria, with free float being one of several considerations. 

Other key factors include: 

Bursa Malaysia maintains regular engagement with index providers to stay current with their methodologies, governance standards and transparency requirements.  

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