SC issues new guidelines on offer of shares by unlisted public firms

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KUALA LUMPUR: The Securities Commission (SC) had on Monday issued new guidelines on offer of shares by unlisted public companies (UPCs) to sophisticated investors which will take effect on Aug 1.

It said the guidelines aim to safeguard investors’ interest due to increased queries and complaints received by the SC on offering of shares by UPCs.

The offer of the shares was marketed through phone calls, seminars, video recording via social media or unlicensed agents, to both sophisticated and non-sophisticated investors.

“The new guidelines set out the obligations for UPCs when offering shares to sophisticated investors, including requirements for UPCs to only appoint entities licensed by the SC, if any agents are engaged to market and promote their shares.

“UPCs also need to ensure that the prospective investor that they approach is a sophisticated investor, ” it said.

The SC also said UPCs will need to print a caution statement on the cover page of any information memorandum (IM) issued, to clearly state that while the IM is deposited with the SC, approval by the SC is not required for the offering or the IM.

UPCs are also required to submit a post-issuance notification to the SC so it can monitor funds raised and utilisation of proceeds.

“Sophisticated investors are reminded to perform their own assessment in respect of the share offerings, as the SC does not review the offering or promotional document issued by the UPCs,” it said.

The SC cautioned UPCs that offering shares to retail investors without a prospectus is a serious breach under the Capital Markets and Services Act 2007.

“A person found liable may be punished with a fine not exceeding RM10mil or imprisonment not exceeding 10 years, or both, ” it said.



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