1. Introduction

This article is designed to equip Directors of companies seeking to list their companies on the ACE Market of Bursa Malaysia (“Bursa”) with an overall understanding of the framework and process flow leading up to the Initial Public Offering (“IPO”). The purpose of this article is to guide directors of SME’s in gaining a deeper understanding on the process of listing and what it will entail, from the perspective of company resources and costs. These two areas are examined further below.

i) Resources

While the financial indicators may support the decision of the Board of Directors to proceed down the path of listing, the company must take cognissance of the extent that company resources will need to be diverted away from day-to-day operations and channeled into the listing exercise itself. Generally, legal, company secretarial and finance teams will be almost fully tied up for the duration of the due diligence and prospectus vetting stages, with minimal manpower available to run day-to-day operations. Senior management and the Board of Directors will also be required to dedicate a lot of time and focus towards the exercise, by way of attendance of meetings and in the form of sign-offs on the requisite documentation.

ii) Cost

There is also the issue of cost. Prior to any public funds actually being raised, the funds to implement the listing exercise will initially need to come out of the Company’s existing funds. Each external advisor appointed will charge a substantial service fee, and the appointment of such service providers is mandatory. While quotations are extended and letters of engagement are signed upfront, the initial quoted fee may need to be significantly adjusted upwards in the event of unforeseen delays and other obstacles requiring additional searches, verifications, audits and reviews by the external advisors.

2. Pre IPO Preparation

Once the decision is made to list the Company, the Legal Counsel should immediately start compiling and organizing legal documentation in preparation for the upcoming due diligence. It is recommended that a team of key legal, company secretarial and finance personnel be put together and a scope of work determined and implemented, even before the actual due diligence commences.

The team should work on compiling and organizing into easily-retrievable form, the following documents/records (among others):

Company Secretarial

  • Particulars of the Company, including registration number, date and country of incorporation, registered office, details of directors & secretary, accounting reference date, details of auditors, issued share capital of each class, details of shareholders, etc;
  • Copies of company forms and documents such as certificate of incorporation of the Company (and any certificate of incorporation on change of name, memorandum and articles of association of the Company with all resolutions or agreements required, copies of the registers of members, directors etc. and minute books of the Company, etc.;
  • Details of any share option agreements or arrangements and/or pre-emption rights and/or conversion rights over the Company’s share capital (whether issued or not), details of any liens, mortgages, charges or encumbrances over the share capital of the Company, etc.;
  • Details of the Group; lists of subsidiaries and associated companies, details of their shareholders and shareholding percentages (best to have this in a chart);
  • List of assets owned by the Company (plant, machinery, buildings, equipment, vehicles), plus all financing (hire purchase, leasing) documentation associated therewith, details of encumbrances over company assets;
  • Regulatory approvals such as permits or licenses required by the Company or a subsidiary for the purpose of carrying on business (for regulated industries/businesses);
  • Details of related party transactions between the Company or its subsidiaries/associated companies, with directors, CEO’s or their family members, controlling shareholders, or another company in which the controlling shareholder of the Company has a direct/indirect stake of 30% or more; and
  • Details of existing or threatened litigation involving the Company or a subsidiary (if applicable).


iii) Legal

  • Copies of any standard form terms and conditions of business adopted by the Company or a subsidiary;
  • List of major customers and suppliers;
  • Copies of all material contracts entered into between the Company or its subsidiaries and third parties (local and international);
  • Intellectual property documentation including certificates of registration, and lists of applications to register patents, trademarks or other forms of IPR’s, statutory declarations /copyright databases, copies of licensing, franchising, co-branding or other agreements;
  • Insurance policies, tenancy agreements, and other “standard” contractual documentation; and
  • HR documentation – Employment Agreements and HR policies, records of EPF and SOCSO contributions, etc.


iv) Accounts/Finance/Tax (where applicable)

  • Copies of audited audited accounts and directors’ report of the Company and its subsidiaries for the last three years and updated copies of accounting policies;
  • Management accounts of the Company and its subsidiaries for the period from the date of the last audited accounts to date;
  • Details of all capital commitments of the Company and its subsidiaries entered into since the date of the last audited accounts;
  • Details of bank accounts of the Company and its subsidiaries;
  • Details of all dividends or other distributions of the Company or any of its subsidiaries made or declared since the date of the last audited accounts, bonus issues or repayments of capital etc.;
  • Details of all current overdraft facilities and current balances, and borrowings of the Company and its subsidiaries including money raised by acceptances or debt factoring and loan stock, as well as copies of all guarantees and indemnities issued by the Company or any subsidiary ; and
  • Tax-related documentation.

3. Leading up to the IPO

a) Due Diligence Stage

i) Preliminary matters

These may include some or all of the action items set out below:

a) A listing scheme should be prepared setting out the projected shareholding movements pre-and-post IPO, list of promoters, substantial shareholders and directors, as well as the percentage of shares to be offered by way of private placement and to the domestic public retail market, as well as employee share option schemes if any. A Board meeting will need to be convened and approvals to proceed with the listing exercise on the envisaged scheme will need to be obtained prior to commencing the listing exercise.

b) The board of directors should be restructured to achieve the right number of independent directors; especially where the SME/SMI is a family business and the board may comprise family members and personal contacts of the founders, who may be related parties via shareholdings in other affiliated companies. More independent directors may need to be appointed to the board.

c) The Company will need to change the existing company name to “Berhad” and obtain Form 20 from the Companies Commission attesting to the change of name.

d) The Articles of Association and the Memorandum of Association also need to be amended, to comply with the requirements of Chapter 7 of the ACE Market Listing Requirements (“AMLR”).

ii) Appointment of IPO service providers

Once the Board of directors has given approval to proceed with the IPO, a panel of external advisors will need to be appointed. Generally, these comprise:

-Company Secretary
For SMI/SME’s that outsource company secretarial work, the existing service provider may be a small firm that provides services mostly to private limited companies. Company secretarial firms providing services to listed companies, need to have more manpower and resources. If this is the case, the Company may need to appoint a larger company secretarial firm.

-Advisor, Sponsor, Underwriter and Placement Agent
A merchant bank needs to be appointed as Sponsor/Advisor for the proposed listing. This will need to be a merchant bank. Once appointed and the Letter of Engagement is signed, a Sponsorship Agreement will need to be entered into followed by an Underwriting Agreement and Placement Agreement.

-Solicitors for the Listing
A legal firm should be appointed to act as Solicitors for the Listing, in order to conduct the legal due diligence on the Company (on the instructions of the Sponsor) and sign off on the necessary documentation.

-Auditors and Reporting Accountants
A firm of accountants should be appointed to prepare the Accountants Report for inclusion in the Prospectus, the Auditors letter on the pro forma balance sheets of the company based on audited financial statements as at a specific date, in addition to issuance of a comfort letter detailing information checked by the accountants in the prospectus. They may also be required to conduct special audits.

-Internal Control auditors
A firm of consultants should be appointed to conduct a review of risk management and internal control systems employed by the company as well as the existing corporate governance framework and to issue reports on both aspects. To this end, they will need to review:

a) Whether adequate corporate governance records are maintained by the Company;
b) Whether sufficient systems (including accounting and management systems), procedures, policies, controls and resources are in place/available for the purposes of compliance with the Listing Requirements; and
c) Whether adequate internal controls and risk management systems are in place for compliance with applicable laws and regulations.

Upon issuance of the final report, the promoters will be required to sign a letter of undertaking, to confirm that their high-priority recommendations have been or will be implemented prior to listing.

-Independent Market Research Consultant
A market research service provider will need to be appointed to prepare an Independent Market Research Report and Business Overview in connection with the listing exercise, for the purposes of inclusion in the prospectus.

-Issuing House (nearer to the time of IPO)
The services of an issuing house will need to be retained for the purposes of, inter alia, distributing the prospectus, application forms and envelopes to stockbrokers, financial institutions and members of the public, distributing balloted public applications, receiving, sorting and counting applications received.

-Share Registrar (nearer to the time of IPO)

  • A share registrar will need to be appointed for the purposes of:
  • Maintaining and updating the Register of Members and providing public access thereto (post listing);
  • Attending to queries from shareholders, the public, stockbrokers and financial institutions;
  • Processing and registering share transfers;
  • Preparation and distribution of dividends, rights issues, bonus issues, etc; and
  • Arranging for dispatch of Annual Reports and other documents to shareholders.

iii) Listing Roadmap/timetable

The listing roadmap/timetable will be drawn up by the Sponsor and should provide for, among others, preparation and review of the following documents, convening of meetings and the relevant proposed deadlines/timelines. Items set out on the roadmap would usually include:

  • Appointment of all professionals;
  • Due diligence kick off meeting;
  • Due diligence & fieldwork;
  • Preparation and approval of Due Diligence Planning Memorandum ;
  • Preparation and approval of profit & cashflow forecast and projections;
  • Amendment of Memorandum & Articles including compliance checklist;
  • Preparation and approval of Short Form Accountant’s report;
  • Preparation and approval of Proforma Balance Sheet ;
  • Preparation and approval of Internal control review report;
  • Preparation and approval of Independent market research report ;
  • Preparation and approval of 3 year business plan ;
  • Preparation of and approval questionnaire for promoters, directors and substantial shareholders;
  • Preparation and approval of due diligence verification notes;
  • Preparation and approval of Information Memorandum ;
  • Preparation and approval of prospectus;
  • Additional documents to be submitted such a statutory declarations, directors responsibility statements, etc.

iv) Due Diligence

These advisors will meet the Management team at a first meeting known as the due diligence kick off meeting. This meeting will also be attended by the Company Secretary (which could be an internal or external party).

At the due diligence kick off meeting, each advisor will explain their role to the Management team and the scope of the due diligence to be undertaken, with reference to the corresponding sections of the AMLR.

a) Conduct of due diligence

The Due Diligence will comprise:

i) A kick off meeting at which all the members of Senior Management, Board of Directors and the respective external teams will meet each other;

ii) Fieldwork (during which time the advisors will be physically located on the premises of the Company, preferably in a dedicated data room) and will request to sight documents and interview management, finance personnel, legal personnel, etc; and

iii) Additional Q&A and requests for documents, several rounds of which may take place; by which time, the advisors may no longer be based at the Company’s premises.

The Company will need to appoint an internal team to respond to the due diligence questionnaires and to compile documents (photocopies and originals) requested for by the respective advisors, during the due diligence.

Responding to the numerous rounds of questions and constant requests for supporting documentation, can be an extremely time-consuming process. Often, the normal operations of the company are disrupted to some extent during the due diligence.

b) Compilation and review of due diligence reports

Once the reports are completed, they will need to be reviewed by the merchant bankers and signed off on by the issuing parties.

c) Compilation of draft prospectus and review by the IPO Team

i) The merchant bankers will be in charge of compiling the prospectus.

ii) There will be several rounds of review and sign off on the various sections of the draft prospectus by senior management and company secretary.

iii) Generally, a prospectus will be arranged into the chapters and headings as below. The following is taken from a sample ACE market company prospectus.

Summary Information

    • History and nature of business
    • Risk factors
    • Financial highlights
    • Purpose of the IPO
    • Principal statistics relating to the IPO
    • General description of future plans and strategies
    • Outlook and Prospects
    • Proceeds from the IPO and Proposed Utilisation

Particulars of the IPO

    • Opening and closing of application
    • Important dates
    • Share Capital
    • Our IPO
    • Purpose of the IPO
    • Pricing of our shares
    • Proceeds of the public issue and proposed utilization
    • Dilution
    • Brokerage, Underwriting and Placement commission
    • Salient provisions of the Underwriting Agreement

Risk factors

    • Business risk
    • Risk relating to the industry
    • Other risks

Company Information

    • Our history and key milestones
    • Pre IPO sale of shares (if applicable)
    • Listing Scheme
    • Share capital
    • Our business and services
    • Principal markets for our services
    • Types sources and availability of resources
    • Our competitive advantage
    • Technology
    • Quality Assurance and control procedures
    • Marketing
    • Cyclical nature of the business
    • Intellectual Property
    • Research and Development (if applicable)
    • Approvals, major licenses and permits
    • Interruptions in operation during the last 12 months
    • Exceptional factors affecting the business
    • Business Partnerships and agreements
    • Major customers and suppliers
    • Real property, plant and equipment

Promoters, Substantial Shareholders, Directors and Key Management Employees

    • Information on promoters/substantial shareholders
    • Information on Directors
    • Audit, Remuneration and Nomination Committee
    • Key Management Employees
    • Involvement of executive directors and key management employees in other businesses/corporations
    • Declaration of promoters, directors and key management employees,
    • Relationships and associates
    • Benefits paid or intended to be pair or given to any Promoter, Director or Substantial Shareholder
    • Employees
    • Training and Development
    • Employment Contract/Service Agreement

Approvals and Conditions

    • Conditions to the approval and compliance thereof
    • Moratorium on Promoters Shares

Related Party Transactions and Conflicts of Interest

    • Existing and proposed related party transactions
    • Recurrent related party transactions of a revenue or trading nature
    • Mitigating factors and steps
    • Transactions which are unusual in their nature or conditions
    • Outstanding loans made to or for the benefit of related parties
    • Conflict of interest

Other General Information

    • Share capital
    • Articles of association
    • Limitation on the right to own securities
    • Government law, decree, Regulation or other requirements
    • Directors and Substantial Shareholders
    • General
    • Expenses and Commissions
    • Public takeovers
    • Material litigation
    • Material contracts
    • Letters of Consent
    • Advisor’s conflict of interest
    • Responsibility statements
    • Documents available for inspection

Procedure for application and acceptance

    • Opening and closing of application
    • Eligibility
    • Methods of application
    • Procedures for Application
    • Authority of directors and issuing house
    • Over/under subscription
    • Unsuccessful/partly successful applicants
    • Successful applicants
    • CDS Accounts
    • Enquiries
    • List of Authorised Depository Agents

Other Reports

    • Independent Market Research report
    • Directors report
    • Accountants Report including Pro Forma Balance Sheet and Reporting Accountant’s letter thereon

d) Finalisation of prospectus and submission to Bursa, SC etc

e) A Board meeting must be convened to approve submission to Bursa and to address matters relating to share certificates

e) After submission of Prospectus

Essentially, these are action items for completion by the Company between the time of Bursa approval and the date of listing) as required under the AMLR or requested by Bursa, Securities Commission (“SC”), Companies Commission (“CCM”) other parties. These could include:

    • Completion and announcement of full year audit (if the timeframe for completion is very close to the listing date);
    • Signing of Placement Agreement and Underwriting Agreement;
    • Completion of statutory declarations and Undertaking letters from corporate and individual substantial shareholders, to Bursa. Also, consent letters, directors responsibility statements, reports and other documents required by either Bursa and/or SC; and
    • Registration of prospectus with SC and CCM.

f) The week before the IPO

    • At this time, the Issuing House will arrange for the subscription of shares by the public.
    • The Issuing House will work out the determination of basis of allotment, arrange the basis meeting and balloting ceremony and announcement the results, conduct an analysis of shareholders/ownership, dispatch of notice of allotment to successful applicants, file the return of allotment with CCM, make the necessary announcements to Bursa and provide Bursa with necessary documents.

g) The Day of the IPO

    • On the day of the IPO, directors, senior management and invited guests will gather at the lobby of Bursa Securities Malaysia Berhad (Bursa).
    • After a short speech by the designated representative from Bursa, the IPO will be officially launched and trading will begin as soon as the market opens at 9am.
    • There will usually be an anxious crowd gathered around the tv screen in the lobby of Bursa, monitoring the share price movement in the crucial 1-2 hours during which the shares are traded for the first time.
    • Listing proceeds will be received by the Company several days after the ceremony.


This article aims to provide some macro insights into an ACE Market Listing. Of course, the exact process and nature of documents required could differ from company to company, and is subject to the latest amendments to the relevant legislation governing the listing process.


Personal finance author and trainer

    11 replies to "The Legal Counsel’s Guide to Listing a Company on the ACE Market"

    • Li Mike

      Hi KC, would u able to share the checklist guide listing on main board bursa thanks

      would like to discuss business detail with you thanks

    • Giok P

      I am mr GP CHUA, engineer by day, Professional farmer by night
      Now owned the title Chef SuperFOOD Engineer

      We are setting up the LARGEST Global Outdoor SunKiss SuperOrganic Farm in Kota Tinggi on 88 Acres Land Off Grid. We have the cutting edge bioTECH System from Farm-2-Table to turn the global agrifood supply chain for USD$5T into USD$50T by 2040. WE aim for ACE 2022. If our agrifood niche is your cup of tea, we will be pleased to sip the tea with u

      Looking fwd to do Business

    • Jovi

      Hi KC, i noticed you didnt include the investor relations party in the picture. Did you mean IR is not important in the capital market in Malaysia?

    • vincent tan

      I am a owner of a flooring manufacturing company seeking for listing to ace market.Can u guide us in journey to list our flooring manufacturing ?.

      my contact is 0123190290

    • Kenny jong jing tat


      I am a owner of a construction company seeking for listing to ace market. Is there a minimum requirement of a company to be eligible?

      Can i meet you?

      My hp: 0198542531


      Kenny jong

      • KCLau

        Hi Kenny, I am getting my trusted strategic partner Ching Chee Pun (funding expert) to contact you.

    • Alwin Tan

      Can u guide us in journey to list our tissue paper manufacturing in ACE market. Look forward to receive your positive response. tq

      • Chin Hui

        Dear Alwin, Understand from your feedback you are looking for more guidance in the IPO listing process particularly in Ace Market. I would be happy to help you here and keen to explore more on your business and direction. Could you contact me at 011-12420613? Thanks.

    • Darren

      Hi, May I know when is this article and information up to? Is it the latest one? Thank you Lau!

    • Emily Chan

      Hi Lau,

      I have a question and would like to seek your opinion. Recently I came across a company – mymi1.com, I suspected it is a “quick rich scheme” of company. They claim that their company is listing in USA in 2018 and they have started to collect funds from members (to have some sort of special priority to get hold of some share before listing). Can that company do so? Is it still illegal since they claim it is listing in USA. I just need some points and facts to support my suspicious.

      My question may be out of your article, please disregard if it is not your specialty.

      Many thanks,

      • KCLau

        Logically, it sounds like scam.

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