Bursa amends listing rules to strengthen disclosure practices

PETALING JAYA: Bursa Malaysia Bhd announced a number of amendments to the listing rules yesterday, in a move to empower shareholders with better quality information in annual reports for informed investment decisions, and to strengthen the voting process.
Key amendments include introducing making greater non-financial information disclosures mandatory and mandating poll voting for all resolutions in compay annual general meetings (AGMs).
Part of the amendments made are in line with the new and revised International Standards of Auditing (ISA), which come into force on Dec 15, 2016.
Poll voting which is currently only mandated for related party deals, will apply to all general meeting resolutions from July 1, 2016. It is part of enhanced corporate governance practices and shareholder engagement, which will also see listed companies required to publish a summary of key matters arising at AGMs onto their websites.
The requirement for greater non-financial information disclosure will see the introduction of minimum contents for management discussion and analysis (MD&A) in a bid to improve the quality and depth of disclosures made.
The MD&A disclosure was introduced on a voluntary basis in 2011 and all annual reports published as at Nov 30, 2015 contained some form of MD&A statement. The latest rules however specify details which need to be provided for in the MD&As, a couple of which are, a review of operating activities and any identified, anticipated or known risks.
Bursa Malaysia organised six advocacy programmes for chief financial officers last year, with four more planned for this year, in a move to engage companies on the issue.
Globally, MD&A is commonly prescribed as a mandatory disclosure requirement for listed issuers, in places such as Singapore, Hong Kong and Australia.
Another key amendment which will come about with the ISA coming into force is that auditors will now be required to incorporate key audit matters which arose during the audit of the company’s accounts in the annual report, a feature which was previously missing.
Key audit matters are matters which are particularly scrutinised during the course of the audit of the company. The requirement is effective for audits of financial statements for period ending on or after Dec 15, 2016.
“The capital market is a dynamic environment where the rules are constantly updated to ensure their continued relevance and effectiveness. In this regard, the exchange has found that enhanced disclosures and CG requirement are necessary to meet the growing needs of increasingly sophisticated investors,” Bursa Malaysia CEO Datuk Seri Tajuddin Atan said in a statement yesterday.