KUALA LUMPUR (July 23): Malaysia and Hong Kong signed a pact on Thursday that will ease dual listings rules and expand cross-border investment products.
Under the simplified framework that will come into effect in September, companies seeking simultaneous primary and secondary listings in Malaysia and Hong Kong will be allowed to submit a single set of documents, including the prospectus, to support applications in both jurisdictions.
The measures are intended to make it easier for companies to tap investors across both markets while widening investment options available to investors, according to a statement.
A memorandum of understanding for the arrangements has been signed between the Securities Commission Malaysia (SC) and the Securities and Futures Commission of Hong Kong (SFC). The Stock Exchange of Hong Kong also added Bursa Malaysia to its list of recognised stock exchanges.
Hong Kong Exchange hosts over 2,900 listed companies, exchange-traded funds (ETFs) and real estate investment trusts while Bursa Malaysia has over 1,130 similar offerings.
The deal opens up an “extensive range of options for investors in both countries”, SC chairman Datuk Mohammad Faiz Azmi said in his speech at the signing ceremony. “We hope that market players will leverage this arrangement to introduce more bespoke regionally-focused offerings.”
The existing mutual recognition framework has been expanded to cover ETFs, including futures-based, leveraged and inverse, and commodity ETFs. The latest arrangement now includes real estate investment trusts, allowing approved securities to be cross-listed through secondary listings.
“Our markets are well-placed to complement each other as vital financial gateways connecting global capital respectively with the Chinese Mainland and Southeast Asia,” SFC chairman Kelvin Wong said at the same event.
A memorandum of understanding was also signed by Malaysia’s Audit Oversight Board with the Accounting and Financial Reporting Council Hong Kong to boost cooperation on audit oversight, financial reporting compliance and information sharing in relation to cross-border regulations.
The second pact will effectively facilitate both regulators “to address cross-border issues as well as strengthen investor protection and confidence in both markets,” according to a joint statement.