Module 19 - Advisory Services (Rules And Regulations)

Investment banks and universal brokers are the only categories of principal advisers that are permitted to submit all types of corporate proposals. This means that they have the authority to propose various types of corporate actions, such as mergers, acquisitions, and capital raising, on behalf of their clients. On the other hand, 1+1 brokers and special scheme brokers are not allowed to submit all types of corporate proposals, indicating that they have limitations or restrictions on the types of proposals they can submit. Therefore, the correct answer is (i) and (ii) only.

According to the profit test for a retail company seeking listing on Bursa Malaysia Securities Berhad, the company must have an aggregate after-tax profit of not less than RM20 million over 3 to 5 full financial years. Additionally, the company must have an after-tax profit of not less than RM6 million in respect of the most recent financial year. This requirement ensures that the company has a consistent and substantial profit track record, indicating its financial stability and viability for listing on the stock exchange.

Tradable structured products (i) are required to be rated by a recognized rating agency because they are traded in the market and investors need information on their creditworthiness. Structured products of Cagamas Berhad collateralized by securities issued by a company listed on Bursa Malaysia Securities Berhad (iii) are also required to be rated as they involve a significant amount of risk due to the collateralization. Similarly, structured products of a locally incorporated special purpose vehicle sponsored by a qualified dealer collateralized by securities issued by a company listed on Bursa Malaysia Securities Berhad (iv) are required to be rated to provide transparency and assurance to investors. Therefore, the correct answer is (i), (iii), and (iv) only.

To list its shares on the Main Market of Bursa Malaysia Securities Berhad, ABC Bhd must have 15 million shares in the hands of public shareholders. This is because the issued and paid-up capital of the company is 60 million shares, and to list on the Main Market, at least 25% of the shares must be held by public shareholders. 25% of 60 million is 15 million shares. Therefore, ABC Bhd needs to have 15 million shares in the hands of public shareholders in order to meet the listing requirements.

The given description describes the Islamic principle of Musharakah. Musharakah is a partnership arrangement where all parties contribute capital, either in the form of cash or in kind, to finance a business venture. In Musharakah, the profits and losses of the business are shared among the partners based on their agreed ratio. This principle promotes cooperation and sharing of risks and rewards in a business venture, aligning with Islamic principles of fairness and justice.

The minimum level of funds that must be raised by a Special Purpose Acquisition Company (SPAC) through its initial public offering (IPO) is RM150 million. This means that the SPAC must raise at least this amount of money from investors in order to proceed with its intended acquisition plans.

When an originator is the only primary subscriber and holds not more than 10% of the Asset-Backed Securities (ABS), they are required to make their best efforts to sell the excess ABS within a period of not more than 3 months from the date of issuance. This means that the originator should actively try to find buyers for the excess ABS within this timeframe to ensure that they do not hold a significant portion of the securities themselves.

The correct answer is (i) and (iii) only. This means that the statements (ii) and (iv) are incorrect. Statement (i) states that an applicant must have an uninterrupted profit track record of 3 to 5 full financial years with an after-tax profit of at least RM6 million for the most recent financial year. Statement (iii) states that an applicant must have been incorporated and generated operating revenue for at least one full financial year prior to the submission to the Securities Commission. Therefore, only statements (i) and (iii) are correct.

The custodian agreement between a Special Purpose Acquisition Company (SPAC) and the custodian of its trust account must include the conditions for the resignation and termination of the custodian (i), provisions relating to the powers of the custodian to decide without reference to the management team (iii), and the conditions under which the custodian is allowed to invest the monies in the trust account in permitted investments (iv). Additionally, the agreement must also include the obligation by the SPAC to maintain an interest-bearing account and to state the holder and operator of the account (ii). Therefore, all of the above options are correct.

Based on the information given, the maximum amount of convertible securities that Hibiscus Bhd can further issue without obtaining shareholders' approval is RM2 million. This is because the company has already issued RM6 million convertible securities on 15/12/2XX4, and there is no mention of any additional authorized capital or any changes in the company's capital structure. Therefore, the company can only issue an additional RM2 million convertible securities without requiring further approval from shareholders.

The minimum information required to be announced to the public in respect of the business model of the venture agreement, as stipulated in the Listing Requirements of Bursa Malaysia Securities Berhad, includes strategic alliances or partnerships, the target market of the product and services to be offered, and the source and nature of revenue to be derived from the venture. The exact size of the market is not specifically mentioned as a requirement.

The correct answer is (i) and (iii) only. This means that statement (ii) and (iv) are incorrect. Statement (i) is correct because civil action must be initiated within 6 years from the date the cause of action arises or when the contravention is discovered, whichever is later. Statement (iii) is also correct because an aggrieved party can take civil action under the CMSA without the need for a securities offence to be proven against the potential defendant.

The correct answer is (iii) and (iv) only. This means that in order for the Securities Commission to consider listing a group of companies on Bursa Malaysia Securities Berhad when no single company within the group meets the profit track record requirements, the companies within the group must collectively fulfill the profit requirements and also have common controlling shareholders. This suggests that the Securities Commission prioritizes the financial stability and control of the group as a whole, rather than individual companies within the group or other factors such as common directors or being controlled by Bumiputera.

Since one of the directors already holds 30 million shares, the maximum shares that can be allocated to him under the share scheme for employees would be the difference between the proposed new shares (22.5 million) and the shares he already holds (30 million), which is 2.25 million. Therefore, the correct answer is 2.25 million.

After-tax profit is used to determine if an applicant's operations are predominantly foreign-based for the purposes of listing on the Main Market of Bursa Malaysia Securities Berhad. This is because after-tax profit reflects the profitability of a company after all taxes have been deducted, and it gives a clearer indication of the company's financial performance. If a company's after-tax profit is predominantly generated from foreign operations, it suggests that the company's operations are primarily based outside Malaysia, making it eligible for listing on the Main Market.

A corporation listed on the ACE Market seeking a transfer to the Main Market may seek a transfer if it fulfills the Infrastructure Project Corporation Test (i). It may also seek a transfer if it has uninterrupted profit of 3 to 5 full financial years based on audited financial statements, with the aggregate after-tax profit being at least RM20 million and the after-tax profit for the most recent financial year being at least RM6 million (iii). Lastly, if the corporation is seeking a transfer based on the strength of its existing core business, it is not required to comply with the uninterrupted profit requirement (iv). Therefore, the correct answer is (i), (iii), and (iv) only.

According to the information provided, James acquired voting shares through a sale and purchase agreement. The question asks when James must send out the written notice of the take-over offer under the TOM Code. The correct answer is "Upon the sale and purchase agreement becoming unconditional." This means that James must wait until all conditions of the agreement have been met before sending out the written notice.

The correct answer is (i) and (ii) only. This means that the statements (i) Tradable SPs must be rated by a rating agency recognised by the Securities Commission (SC) and (ii) A qualified dealer may make a submission directly to the SC for a proposal to issue SPs are both correct. Statement (iii) is incorrect as it states that the SC's prior approval is required for the issuance of non-tradable SPs where both parties are qualified banks. Statement (iv) is also incorrect as it states that a Special Purpose Vehicle sponsored by Cagamas Berhad need not be a resident in Malaysia.

The correct answer is 1 market day. When a company intends to make a material announcement, it may request a suspension of trading from Bursa Malaysia Securities Berhad. If approved, the period of suspension can be up to 1 market day, allowing the company to hold a press conference and make the announcement before trading resumes.

The minimum number of shares that must be offered under the balloted public offer portion is 10.0 million. This is because the question states that the enlarged issued and paid-up capital of MBBB upon listing is RM350 million, comprising 350 million ordinary shares of RM1.00 each. Therefore, to meet the minimum requirement for the balloted public offer portion, at least 10.0 million shares must be offered.

Consent is considered to be freely given when it is not influenced or caused by coercion, misrepresentation, or undue influence. Coercion refers to the use of force or threats to obtain consent, misrepresentation involves providing false information or deceiving someone to gain consent, and undue influence refers to situations where a person in a position of power or authority manipulates or pressures another person into giving consent. Therefore, options (i), (ii), and (iv) are the correct answers as they exclude negligence, which is not related to the concept of freely given consent.

The correct answer is 5. The applicant is required to declare whether they have been subjected to any action by Bursa Malaysia Securities Berhad for breach of listing requirements or rules issued by Bursa Malaysia Securities Berhad during the last 5 years prior to the submission. This means that any actions taken against the applicant by Bursa Malaysia Securities Berhad within the past 5 years must be disclosed.

The correct answer is (i), (ii) and (iii) only. This is because the offer is made to an identifiable group of investors, which includes directors and employees of Twilight Berhad, as well as persons who have contributed to the success of the company. The offer is not limited to directors of other companies that have contributed to Twilight Berhad's success, so option (iv) is not included in the correct answer.

In a take-over offer where the Board of Directors of the offeror is faced with conflict of interest, appointment of independent adviser is by the offeree. This means that when the board of directors of the company making the take-over offer has a conflict of interest, it is the offeree (the company being targeted for the take-over) who has the authority to appoint an independent adviser. This is done to ensure that the offeree receives unbiased and impartial advice during the take-over process.

The correct answer is "No restriction" because a stand-alone Islamic Medium Term Notes (MTN) Programme does not have a maximum tenor. Unlike other types of MTN programmes that may have specific time limits, Islamic MTN programmes do not impose any restrictions on the duration of the tenor. This allows issuers to have flexibility in terms of the maturity period for their Islamic MTN programme.

The latest date for BBB Berhad to submit the draft offer document to the Securities Commission for its consent would be 5/3/2XX1. This is because the company sent out the required written notice on 1/3/2XX1, and typically, the draft offer document needs to be submitted within a certain timeframe after the notice is sent. In this case, it is reasonable to assume that the deadline would be within a few days or weeks after the notice, and 5/3/2XX1 falls within that timeframe.

TVC must immediately disclose the fact to the Securities Commission and the public by way of a press notice. The Securities Commission is the regulatory authority that oversees the issuance of offer documents and disclosure requirements in relation to acquisitions. Therefore, it is important for TVC to inform them about the material omission. Additionally, TVC must also disclose the fact to the public through a press notice to ensure transparency and provide information to all stakeholders.

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The correct answer is (i), (ii) and (iii) only. This means that the requirements to be fulfilled in respect of the listing of the SPAC under the Equity Guidelines are not to ensure the SPAC is able to raise sufficient funds through its public offering by underwriting the unsubscribed portion of securities, the issue price of any convertible securities and warrants issued as part of the listing scheme of the SPAC must be priced at least RM0.50 each, and the exercise price for the warrants to be issued as part of the SPAC's listing scheme can be set at a discount to the SPAC's ordinary shares offered to the public. The requirement regarding the collective equity interest of the management team is not mentioned as a non-requirement.

The question is asking for the minimum amount that needs to be offered under the public offer portion for Runaway Bhd's listing on the Main Market of Bursa Malaysia Securities Berhad. The correct answer is RM5 million, which means that Runaway Bhd must offer at least RM5 million worth of shares to the public as part of their listing.