Contents of main prospectus
A company proposing to conduct an (IPO) Initial Public offering ie., a company’s first stock offering to the public exercise must ensure that its prospectus meets the minimum form and content requirements as set out in Section 235 of the Capital Markets and Services Act 2007 and the Prospectus Guidelines issued by the SC, admission requirements under Chapter 3 Main Market Listing requirements of Bursa Securities.
1. All experts’ statements or reports must be dated. All reports must be signed. The experts must provide written consent prior to the issue of the prospectus to the inclusion of statements or reports made by them or to statements in the prospectus based on statements or reports made by them. The prospectus must state that the expert has given his/her consent and has not withdrawn the same.
2. A corporation approved for listing and quotation on Bursa Malaysia Securities Berhad is required to publish a summary advertisement of its prospectus in a widely circulated ‘Bahasa Malaysia’ newspaper and English newspaper.
3. The Securities Commission plays a supervisory role in that it must not register any prospectus unless it is of the opinion that it does not contain any statement or matter which is misleading in the form or context in which it is included (Section 233 CMSA).
Under the Prospectus Guideline, issuers are now required to present a table of the income statement of the corporation or group for the past 3 to 5 financial years (or such shorter period that the corporation/group has been in operation).
The criteria applied in determining the number of past financial years which must be presented are as follows:
Related party transactions
1. Any transactions that are unusual in their nature or conditions, to which the corporation or any of its parent or subsidiaries was a party in respect of the past one (1) financial year and the subsequent financial period thereof, if any, immediately preceding the date of the prospectus; and
2. The amount and details of outstanding loans made by the corporation or any of its parent or subsidiaries in respect of the past one (1) financial year and the subsequent financial period thereof, if any, immediately preceding the date of the prospectus
It must contain a statement as to whether or not there have been, since the last audited accounts of the corporation/ group, where applicable all corporations which forms part of the proposed group, any default or any known event that could give rise to a default situation, in respect of payments of either interest and/ or principal sums in relation to any borrowings in which they are aware of.
Valuers are required to prepare valuation certificates for inclusion in prospectuses when the related corporate exercises contain valuation or revaluation of all property assets. Property assets are now clarified to include all property assets such as timber concessions, quarries/extraction of minerals, development rights and plant, machinery and equipment (i.e. not confined to land and buildings only).
Electronic prospectus and Internet securities application
The key features of the guidelines for electronic prospectus and electronic application forms are as follows:
1. Electronic prospectuses (e-prospectuses) and electronic application forms (e-application forms) are to be accompanied by a notice stating that the e-prospectuses and e-application forms are issued, circulated and distributed for informational purposes only.
2. The e-host must ensure that the e-prospectus is a copy of the corresponding prospectus that has been registered by the SC. E-host means a person who is allowed to issue, circulate or distribute electronic prospectuses and electronic application forms, and is limited to the following persons:
d. merchant banks, and/or
e. such other person(s) as may be determined by the SC in accordance with such terms and conditions as the SC deems fit.
3. Save for limited exceptions, the e-prospectus will not be allowed to contain embedded hyperlinks to other information contained in other parts of the internet site on or electronic storage medium in which the e-prospectus appears, or third party information.
4. Electronic application forms must be accompanied by a copy of the prospectus that has been registered by the SC.
5. The e-host must take adequate and appropriate measures to ensure that the e-prospectus and e-application form are prevented from unauthorised tampering or alteration.
6. The e-host must retain a copy of the format and information displayed to an applicant when accessing an e-prospectus and an e-application form in a durable and legible medium for seven (7) years.
7. The e-host must ensure that the electronic prospectus is presented in a way that the applicant will make his or her investment decision on the basis of the prospectus, and not on the basis of the advertisement, promotional material or other information.
8. The application provider must prominently display the following notices to accompany the facility providing for internet securities application:
a. notice as to the risk of using the Internet
b. notice as to alternative methods of securities application
c. notice as to the person responsible for the facility for internet securities application
d. notice as to the procedures for withdrawal of securities application made when the supplementary prospectus is issued.
9. The applicant must receive a confirmation of receipt of the internet securities application upon submission of the e-application form. The applicant must be able to download into an electronic storage medium or print out a hard
copy version of the confirmation for his or her own record. The application provider must provide clear and simple instructions as to how an applicant can print or download the confirmation.
10. The application provider must put in place adequate and appropriate systems and security measures to ensure the reliability, availability, integrity and confidentiality of the securities application to other related information
or transactions transmitted via the facility for internet securities applications.