Introduced in year 2017, the Leading Entrepreneur Accelerator Platform (“LEAP”) Market is an alternative market offered by Bursa Malaysia for small and medium enterprises (“SMEs”) which have not met the listing requirement of the ACE Market with greater fund- raising access and visibility via the capital market.
A corporation applying to admit to the LEAP Market (“the Applicant”) must be a public company incorporated in Malaysia with a clearly identifiable core business. Core business is defined as business which provides the principal source of operating revenue or after-tax profits to a corporation and which comprises the principal activities of the corporation and its subsidiary companies[1]. All requirements relating to admission will be governed under the LEAP Listing Requirements and Securities Commission Malaysia (“SC”)’s approval is not required for listing on the LEAP Market. However, the Applicant is required to deposit a copy of the information memorandum with the SC.
The Applicant is considered as not suitable for listing if it involves chain listing, an investment holding corporation with no immediate or prospective business operations within its group or an incubator, including a technology incubator which may apply for admission to the Main Market only.[2]
It is also required that the Applicant must have at least 10% of the total number of ordinary shares for which listing is sought in the hands of public shareholders at admission.
Apart from the promoters or the owners of the company, only a qualified ‘Sophisticated Investor”[3] are allowed to trade in companies listed on LEAP market. ‘Sophisticated Investor” means any person who falls within any of the categories of investors set out in Part I of Schedule 6 or Part I of Schedule 7 of the Capital Market Services Act 2007 (“CMSA”) with further amendments that came into force on 1st July 2021 which have widened the categories of sophisticated investors to include among others, individuals with investments of RM1 million in capital market products, either on their own or through joint accounts with their spouse; CEOs and directors of licensed or registered persons under the CMSA; and corporations that manage funds of their related companies with assets of more than RM10 million. This will allow more investors to expand their investment options while issuers can now tap into a larger pool of sophisticated investors[4].
Despite the complaints of lack of liquidity, narrow base of approved investors in the Leap Market and pending the establishment of the framework to process a transfer or graduation to the ACE or Main Markets, there are a of total 44 companies who have listed on the LEAP Market as of December 2021[5]; the platform has seen encouraging interest from SMEs, which see LEAP Market as a stepping stone for them to enter the ACE Market or even the Main Market in the future.
CCLC’s capital markets team advises on all forms of capital markets offerings. We have had involvement in several public offerings (IPOs) in Malaysia. If you have any questions or require any additional information, please contact:
Christina Chia – ccle@cclc.com.my
Liew Siew Pen – lsp@cclc.com.my
[1] https://www.bursamalaysia.com/regulation/listing_requirements/leap_market/listing_requirements
[2] https://www.bursamalaysia.com/regulation/listing_requirements/leap_market/listing_requirements
[3]https://www.bursamalaysia.com/regulation/listing_requirements/leap_market/listing_requirements
[4]https://www.sc.com.my/resources/media/media-release/sc-amends-capital-market-laws-to-widen-categories-of-sophisticated-investors-exemption-for-scs-approval-on-corporate-proposals
[5] https://www.bursamalaysia.com/listing/listing_resources/ipo/listing_statistic