Amendments to the Bursa Malaysia Main Market Listing Requirements and ACE Market Listing Requirements on 26 February 2025

Background

The Securities Commission (“SC”) has recently issued revisions to its Equity Guidelines, which, among others, introduced amendments to the provisions governing significant changes in business direction or policy, including backdoor listings and reverse takeovers of corporations listed on Bursa Malaysia Securities Berhad (“Bursa”). Following this, Bursa has recently announced its amendments to the Main Market Listing Requirements (“Main LR”) and the ACE Market Listing Requirements (“ACE LR”). The amendments concerned will now transform how companies approach securities issuance, executive remuneration and transparency in financial reporting. 

In summary, the new revised Equity Guidelines clarifies the treatment of backdoor listings and reverse takeovers, revise the assessment period for board composition changes around acquisitions, define change in effective control to cover shifts in major shareholding and management, and tighten exemptions for asset acquisitions by requiring such assets to be part of the listed corporation’s core business for at least two consecutive audited financial years. 

Introduction to the Main Market

The Main Market serves as a premier platform for established companies that have satisfied rigorous standards of quality, size, and operational performance. Prospective issuers must demonstrate either a minimum profit track record or meet the threshold for market capitalisation to qualify for listing. The rules to qualify for listing are set out under the Main Market Listing Requirements. In general, companies seeking to be listed on the Main Market must meet either the profit test or the market capitalisation test, or the infrastructure project corporation test (if applicable). Additional requirements include maintaining a minimum level of public shareholding spread and adhering to corporate governance requirements. 

Amendments to the Main LR

The amendments to the Main LR aim to provide clearer and more consistent regulatory expectations for transactions that fundamentally alter a listed company’s business. Bursa Malaysia now treats major acquisitions, disposals, or restructurings that effectively shift a company into a new line of business or cause it to abandon its existing one, with the same level of scrutiny applied to new listing applicants under the SC’s Equity Guidelines. 

This includes reverse takeovers and backdoor listings, which are now subject to more explicit and stringent requirements to prevent companies from obtaining listing status or changing business direction without undergoing proper regulatory assessment. The amendments strengthen disclosure standards, tighten suitability criteria, and reinforce alignment with the SC’s updated Equity Guidelines. Overall, the changes raise the governance threshold for transformative transactions while ensuring that investors receive clearer, more comprehensive information when a listed issuer undergoes a significant change in the business direction.

Introduction to the ACE Market

The ACE Market is a sponsor‐driven platform aimed at high‐growth and innovative companies, offering more flexible entry requirements than the Main Market. It does not require a minimum operating track record or profit. Companies must, however, appoint an approved Sponsor to evaluate their suitability, conduct due diligence, and provide post‐listing oversight. Sponsorship must continue for at least three full financial years after listing, with the submitting Sponsor required to remain in place for at least the first full financial year. 

Amendments to the ACE Market LR

The amendments to the ACE LR strengthen the regulatory framework for transactions that result in a significant change in the business direction or policy of an ACE‐listed corporation. Similar to amendments to the Main LR, these changes were introduced to align the ACE LR with the SC’s revised Equity Guidelines, which now impose clearer and more stringent expectations on transactions that effectively transform a listed company’s core business. 

Under the amendments, ACE Market issuers undertaking major acquisitions, disposals, restructurings, or transactions that amount to a backdoor listing or reverse takeover must comply with enhanced disclosure, suitability, and due diligence requirements. The amendments clarify when a transaction is considered to fundamentally alter a company’s business, tighten the criteria for assessing changes in control or management, and ensure that transformative transactions are subject to regulatory scrutiny comparable to that applied to new listing applicants under the SC’s framework. Overall, the updated ACE LR raise the governance and transparency standards for significant corporate exercises, ensuring that investors receive clearer information and that companies cannot circumvent proper regulatory assessment when shifting into new businesses or undergoing de facto listing exercises.

Effects of the amendments to corporate exercises

In summary, the amendments tighten Malaysia’s regulation of transactions that may amount to a backdoor listing or reverse takeover. By expanding and aligning key definitions with the Equity Guidelines, the rules now capture a wider range of changes in ownership, board composition, and senior management, including those occurring gradually over a 12‐month period. They also introduce more detailed disclosure requirements, especially regarding controlling shareholders and connections between new directors or executives and vendors. Overall, the changes increase transparency, strengthen investor protection, close loopholes previously used to avoid RTO scrutiny, and raise the compliance burden for listed corporations and their advisers. 

The amendments ultimately strengthen and modernise the environment for corporate exercises. By broadening the definitions of business change, control change, and leadership change, companies now have clearer guidance on when enhanced regulatory requirements apply. This creates a more predictable framework for planning acquisitions, restructurings, and ownership transitions. The expanded disclosure requirements also promote greater transparency and investor confidence, which can support smoother shareholder approvals and stronger market reception. 

Because the rules now capture transactions more consistently, companies are encouraged to adopt more robust governance, due diligence practices, and forward planning, which improves overall deal quality. At the same time, the clearer alignment between Bursa and the Securities Commission reduces uncertainty and helps advisers provide more accurate structuring advice. In short, the amendments elevate market standards, enhance trust, and create a more stable and credible environment for executing corporate exercises. 

Conclusion

The 2025 amendments to the Main Market LR and the ACE Market LR, aligned with the revised Equity Guidelines, strengthen oversight of backdoor listings and reverse takeovers. By broadening definitions and enhancing disclosure obligations, the reforms improve transparency, investor protection, and governance standards. Overall, they create a clearer, more predictable framework for corporate exercises, fostering trust and stability in Malaysia’s capital markets.