Malaysia, Thailand and S'pore propose review mechanism for cross-border stock offerings

Malaysia, Singapore and Thailand have proposed to develop a review framework to facilitate cross-border equity and stock offerings in the region.

Capital market regulators from the three countries, namely, the Securities Commission of Malaysia (SC), Monetary Authority of Singapore (MAS), Securities and Exchange Commission of Thailand (SEC) and the Singapore Exchange (SGX) had signed entered into memorandum of understanding (MoU) to establish a streamlined review framework for the ASEAN common prospectus.

The framework is part of an initiative under the ASEAN Capital Markets Forum (ACMF) implementation plan endorsed by the ASEAN finance ministers to enhance the region's attractiveness as a fund-raising centre.

"With the signing of this MoU, the review of offer or listing applications and the registration of prospectuses will be synchronised among the ACMF signatories, such that approvals for offers or listings and registration of prospectuses will be granted simultaneously," SC chairman Ranjit Ajit Singh, who is also the ACMF chairman, said.

"The key objective of this initiative is to ensure a more seamless process for an issuer seeking listing in more than one ACMF signatory jurisdiction and ensure savings in time to market and faster access to capital.

"In short, it will reduce the time required currently for issuers preparing for a multi-jurisdictional offering of equity or plain debt securities in ASEAN," he explained in his speech during the MoU signing ceremony here yesterday.

The MoU signatories had targeted to implement the streamlined review framework by the third quarter of 2015.

A handbook providing guidance on the various administrative and procedural matters would be jointly issued to effect the implementation of the framework.

The framework would cover all shares and stocks of a public company except for those by a special purpose acquisition company, or SPAC, or units in a real estate investment trust, business trust or close-end fund.

"While Malaysia, Singapore and Thailand are three initial signatories in the MoU, there is commitment among other ASEAN regulators to come onboard when they are ready," MAS assistant managing director (capital markets) Lee Boon Ngiap told reporters at the same event.

According to Ranjit, more members were expected to sign on the MoU once they meet the pre-requisites, among which included being a signatory on the International Organisation of Securities Commissions (IOSCO).

"We anticipate by the end of this year, more members will be signed on to this framework," Ranjit said, noting that Indonesia had only signed on to IOSCO late last year, while the Philippines was expected to follow suit in the short term.

"The important thing when you have an interconnected market is to create opportunities for people to participate, so the benchmark does not necessarily have to be that every single member country must be involved in everything, but where it feels the connectivity could create traction (for its market)," Ranjit said in response to questions whether Indonesia and the Philippines would signed on to the newly launched framework.

Meanwhile, the ACMF meeting had also approved the proposal to develop a five-year Action Plan from 2016-2020 that would focus on ensuring seamless access to capital and investments within a connected regional market.

"We expect to launch the ACMF Action Plan 2016-2020 by the end of the year," Ranjit said.