Bursa Malaysia Securities Berhad (“Bursa Securities” or “the Exchange”) introduced the Best Practice Guide in relation to Independent Advice Letters (“IAL Guide”) today that aims to provide practical guidance to Independent Advisers (“IA”) in discharging their role, which will in turn improve the quality of the advice given and the standard of disclosure in independent advice letters (“IAL”) prepared by them.
The IAL Guide is applicable to IALs prepared by an IA in respect to major disposals, related party transactions and voluntary withdrawal of listings pursuant to the Listing Requirements, as well as in other corporate proposals where an IA is commissioned to prepare an IAL voluntarily.
The IAL will be issued to all the listed issuers’ securities holders for their consideration prior to the latter making their decisions whether to vote for or against the corporate proposal at a securities holder meeting.
Targeted at all IAs, the IAL Guide provides guidance on matters relating to the requirements an IA should meet in accepting an engagement, how an IA should perform the engagement, valuation matters, contents of an IAL, the disclosure of forward-looking information in an IAL and the responsibilities of an IA after issuance of the IAL.
The Guide also provides guidance on the quantitative and qualitative evaluation of a corporate proposal, as well as on the information that may improve clarity and quality of their IALs.
Dato’ Tajuddin Atan, the Chief Executive Officer of Bursa Malaysia, emphasised on the importance of an IA’s role, as investors will rely on an IA’s advice, as set out in the IAL to make informed investment decisions.
“Enhanced disclosures and improved quality of disclosures in the IAL is expected to better empower shareholders with quality information to make informed investment decisions. This will also result in greater transparency and better investor protection which will in turn, boost investors’ confidence in the Malaysian capital market as a whole,” he added.
The IAL Guide was finalised subsequent to the joint public consultation undertaken by both the Securities Commission of Malaysia and the Exchange, and after taking into consideration the feedback from the relevant industry players, including the IAs. Whilst compliance with the IAL Guide is voluntary, the Exchange’s expectation is for the IAs to apply the IAL Guide to the extent possible, when preparing their IALs.
For more information on the 40-page IAL Guide, it is available at www.bursamalaysia.com.