New Listing Requirements For Malaysian Oil And Gas Companies

Author:Mr Matthew Gorman and Kendra MacDonald
Profession:Reed Smith (Worldwide)
 
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We follow up on our client alert from March 2016, in which we considered the consultation process initiated by the Securities Commission of Malaysia (the Securities Commission) with respect to its proposed policy changes on the listing of mineral, oil and gas (MOG) corporations, with a look at the Securities Commission's new framework for the listing of MOG corporations, which will come into effect on 20 March 2017.

In March 2016 we produced a client alert in which we considered the consultation process initiated by the Securities Commission of Malaysia (the Securities Commission) with respect to its proposed policy changes on the listing of mineral, oil and gas (MOG) corporations on the main market of Bursa Malaysia Securities Berhad (Bursa Malaysia).

Following on from the consultation process, the Securities Commission has produced a new framework (the New Framework) for the listing of MOG corporations which will come into effect on 20 March 2017.

MOG corporations seeking to list on Bursa Malaysia's main market previously encountered a somewhat opaque process as there were no clear guidelines in relation to eligibility, and decisions were made on a case-by-case basis. Consequently, the New Framework is a welcome development and it is hoped that it will lead to increased certainty for MOG corporations considering a listing and, ultimately, an increase in the number of MOG corporations listed on Bursa Malaysia.

In developing the New Framework, as well as utilising the consultation process which we discussed in our previous client alert, the Securities Commission carried out a thorough review including jurisdictional benchmarking and engagements with investors and industry experts. Below, we consider the New Framework and its implications going forward.

Aim of the New Framework

The aim of the New Framework is to provide clarity on the types of MOG corporations which the Securities Commission will consider as suitable for listing on the main market of Bursa Malaysia. The New Framework covers initial public offerings and also extends to acquisitions of MOG corporations by listed companies and special purpose vehicles.

In its announcement on the launch of the New Framework, the Securities Commission stated that "these new regulatory measures would enable investors to make better informed decisions on the merits and risks of investing in MOG businesses, which is in line with the Securities Commission's mandate of ensuring a fair and orderly...

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