KUALA LUMPUR (May 18): Retail investors may soon be allowed to trade on Bursa Malaysia's LEAP Market, the main platform for early-stage and emerging companies that has been restricted to sophisticated investors since its inception in 2017, under several enhancements proposed by the Securities Commission (SC) and Bursa Malaysia.
In the proposed enhancements to the LEAP Market, dubbed the LEAP Market 2.0 initiative, retail investors will be permitted to participate, subject to a total investment limit of RM250,000 at any point in time. This includes individual caps of RM100,000 per issuer in the primary market and RM100,000 per broker in the secondary market.
Other key enhancements outlined by the SC and Bursa in a joint statement on Monday include:
- Alternative fundraising pathway for ECF-funded and VC/PE-backed companies: Eligible equity crowdfunding (ECF) issuers with a proven fundraising track record can transition more seamlessly to the LEAP Market through an alternative admission route that bypasses the original requirement of appointing an approved adviser. Instead, ECF operators or private-equity firms can act as listing agents to transition them directly to the LEAP Market.
- Seamless ACE Market transfers: The existing mandatory withdrawal of listing and exit offer requirement will be removed for companies who are eligible to migrate from the LEAP Market to the ACE Market, provided they have been listed for a minimum of two years on the LEAP Market.
- Simplified disclosures: An alternative disclosure document with a simplified format will be introduced to enhance clarity, improve consistency and facilitate greater standardisation across submissions.
- Share-based payment to advisers: A share-based payment option will be introduced, allowing advisers to receive up to 50% of their advisory fees in the form of the applicant's ordinary shares, with a maximum shareholding limit of 2% per adviser, and an aggregate cap of 5% for all advisers, together with a six-month lock-up period.
SC chairman Datuk Mohammad Faiz Azmi said the proposals are designed to reinforce the country's "funding escalator", lower costs and improve access to growth capital through a more facilitative regulatory environment.
“Malaysia has a strong pool of addressable candidates for capital market fundraising with approximately 8,500 mid-tier companies (MTCs). The proposal enables a visible and smoother listing pathway for MTCs and MSMEs (micro, small and medium enterprises),” he said.
To date, one ECF issuer has transitioned to the LEAP Market, while 10 LEAP Market listed companies have migrated to the ACE Market, he said, "demonstrating the potential for a stronger and more sustainable pipeline of companies progressing through the capital market”.
Bursa chief executive officer Datuk Fad'l Mohamed said the enhancements introduces greater flexibility in admission pathways and broader investor participation, while reinforcing market depth and transparency, as well as maintaining appropriate standards of investor protection.
A public consultation paper has been issued to seek feedback on the proposed amendments. The consultation will close on June 15.