He said the SC, together with Bursa Malaysia, is working to improve efficiency in the public markets.
“This is to facilitate the initial public offering (IPO) for start-ups, with introducing measures such as reducing time-to-market for companies seeking to list on the stock exchange.
“Details of the proposed automatic transfer framework will be announced later this month,” he said.
The introduction of a new simplified and accelerated transfer process will facilitate a seamless transfer of listings to promote sizeable and quality ACE Market companies to the Main Market.
“By being in the Main Market, it will open up opportunities for foreign investors to participate.
“This should encourage greater foreign participation in our capital market,” Awang Adek said in his speech at the Malaysia Venture Forum 2023 here today.
He said capital markets play an important role in enabling easier access to funding for start-ups and micro, small and medium enterprises (MSMEs).
“Thus, SC has taken proactive steps to facilitate fundraising for businesses, particularly at the early stage of financing,” he said.
In addition, he said SC’s efforts include allowing flexible financial instruments, facilitating more efficient exit options, encouraging more investments into private markets and forging partnerships and collaborations.
“All of these are pivotal in nurturing a vibrant venture capital (VC) and private equity (PE) ecosystem,” he said.
Awang Adek said SC and Bursa will continue to facilitate exits for promising companies, especially in the tech sector, and recent capital market initiatives aimed at supporting IPO-ready companies are expected to have a positive impact.
“These include tax deductions for eligible tech-based companies on the Main and ACE markets. Concessions on the soon-to-be-implemented capital gains tax will be made available to IPOs on Bursa.
“These measures are designed to enhance fundraising efforts, sustain the vibrancy of the IPO market, and improve trading liquidity,” he said.
Awang Adek said the SC is seeing a healthy pipeline of IPOs this year, with 32 companies approved to date for listing on Bursa, many of which are tech-related.
Malaysia has implemented targeted policies to foster a more dynamic start-up ecosystem, and this includes RM90 billion to be invested in the New Industrial Master Plan (NIMP) 2030.
Start-ups and SMEs are expected to play a crucial role in contributing an anticipated RM30.8 billion in gross domestic product by 2030.
The SC is also looking into introducing a small offering exemption in the Capital Markets and Services Act (CMSA) next year, facilitating a clear safe harbour for offerings of a certain size to sophisticated investors.
“This will provide a clear safe harbour for offerings of a certain size to sophisticated investors.
“It is intended to reduce the regulatory burden in the fundraising process for start-ups and MSMEs, as well as provide clarity for instruments like the Simple Agreement for Future Equity (SAFE) and convertible notes, which are becoming increasingly common in start-up funding,” he said.