SC issues rule book on revised takeover and merger framework

PETALING JAYA: The Securities Commission Malaysia (SC) yesterday launched a rule book on the revised Takeovers and Mergers Framework, to facilitate market activities while ensuring shareholder protection.

The SC said in a statement yesterday that the "Rules on Takeovers, Mergers and Compulsory Acquisitions 2016" (the Rules) stipulates operational and conduct requirements in relation to takeovers and is issued as an SC guideline under Section 377 of the Capital Markets and Services Act 2007.

The Rules came into force yesterday together with the revised Malaysian Code on Takeovers and Mergers 2016 which sets out the broad principles to be adhered to by all parties involved in any takeover or merger.

"It includes, amongst others, the principle that all shareholders must be treated equally in any takeover transaction and should not be disadvantaged by the treatment or conduct of any relevant party to a takeover," said the SC.

The enhancements seek to ensure that the takeover framework will be facilitative to commercial realities while providing protection to shareholders where required. These enhancements include specifying that sizeable unlisted public companies are subject to the Code, removing the limitation that takeover schemes can only be initiated by parties holding over 50% equity interest and providing clear guidance on required conduct during a takeover offer.

The SC worked with market practitioners and investors to ensure the incorporation of the markets' view in the formulation of the enhanced framework.

The Rules and the revised code are available on the SC's website at