1.       INTRODUCTION

The Board of Directors of Bursa Malaysia wishes to announce that the Company had on 22 December 2022 entered into a shareholders’ agreement (“SHA”) with RAM Holdings Berhad (“RAM”) to jointly develop a debt fundraising platform through a joint venture arrangement (“Joint Venture”), to facilitate listed and unlisted small to mid-sized companies tap into a new pool of capital outside of the traditional wholesale markets by offering a new avenue and greater flexibility to these companies which are looking to raise funds. The credit-rated investment notes issued on the platform allow investors to invest in investment notes as easily as they would invest in shares in a transparent and regulated market. The platform also features investment notes with ESG-rating which aid issuers who desire to reinforce ESG credentials with investors, facilitating informed investment decisions.

Pursuant to the terms of the SHA, the Joint Venture shall be carried out through a body corporate to be incorporated under the Companies Act 2016, whereby Bursa Malaysia will hold a 51% equity interest and RAM will hold the remaining 49% equity interest in the company (“NewCo”).

2.       DETAILS OF RAM

RAM is a leading provider of independent credit ratings, research, training, risk analysis, environmental, social, and governance (“ESG”) analytics and bond pricing. It was established in November 1990 as a catalyst for the domestic debt capital market and as the nation’s first credit rating agency. RAM’s major shareholders include CTOS Digital Berhad and S&P Global Asian Holdings Pte Ltd.

3.       SALIENT TERMS OF SHA

By virtue of the SHA, Bursa Malaysia and RAM have committed to collaborate and develop the Joint Venture for a minimum duration of 5 years unless mutually terminated by both parties, from the commencement date of the SHA, which is on 22 December 2022. Unless otherwise agreed between the parties in writing, the SHA shall be automatically terminated in the event the NewCo fails to obtain the relevant operating licences from the Securities Commission Malaysia (“SC”) and/or any other relevant regulatory authorities, for the NewCo to operate. Further, Bursa Malaysia and RAM may also mutually terminate the SHA.

In accordance with the terms of the SHA, Bursa Malaysia and RAM shall provide initial and future financial assistance to the NewCo, in proportion to their respective shareholdings in the NewCo, with a minimum initial capital of RM5,000,000 to be injected into the NewCo.

In accordance with the SHA, Bursa Malaysia and RAM are to mutually agree in writing on the services required to be carried out by the NewCo for the purposes of operating the Joint Venture. As at the date of execution of the SHA, the proposed services to be provided by each respective party or any of its affiliates to the NewCo are as follows:

Bursa Malaysia or any of its affiliates

Ancillary and shared support services including but not limited to :

• governance and secretarial
• technology
• risk and compliance

RAM

To provide:

• Credit rating services
• ESG rating services
• Pricing services of debt instruments

Bursa Malaysia and RAM are to discuss and mutually agree on the relevant service level agreements with the NewCo in respect of the services required for the Joint Venture not later than 6 months after receiving the approval-in-principle from the SC.

4.       RATIONALE FOR ENTERING INTO SHA

The rationale for the SHA is for Bursa Malaysia and RAM to enter into strategic collaboration opportunities through the NewCo, as follows:

• Managing and operating the business of a market-based financing platform which facilitates fundraising by businesses and/or companies from both retail and sophisticated investors through an online and/or app-based platform under the SC’s Guidelines on Recognized Markets; and

• Establishing the roles and responsibilities of Bursa Malaysia and RAM in relation to the Joint Venture as well as regulate the relationship between the parties as shareholders of the NewCo.

5.       RISK FACTORS

The Proposed Joint Venture is subject to the terms and conditions of the SHA. There is no assurance that the Joint Venture will not be exposed to risks such as termination of the SHA and inability to fulfil the terms and conditions of the SHA apart from the risks inherent in this industry. In addition, there is no assurance that the Newco will be able to obtain the relevant operating licences from the SC. The Board will endeavour to take all necessary steps to ensure that the terms and conditions of the SHA which are within the control of the Company are met on a timely basis and will take the necessary steps to mitigate the risks as and when arises.

6.       FINANCIAL EFFECT OF THE JOINT VENTURE

The Joint Venture will not have any effect on the share capital and substantial shareholders’ shareholdings of Bursa Malaysia. It is also not expected to have any material effect on the net assets per share, earnings per share and gearing of Bursa Malaysia for the financial year ending 31 December 2022. The Joint Venture is expected to contribute positively to the future profitability of the Company.

7.       APPROVALS REQUIRED

Bursa Malaysia does not require the approval of its shareholders for the Joint Venture but will need to apply for the relevant licence(s) from the SC to conduct the business of the Newco.

8.       INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors and/or major shareholders of Bursa Malaysia and/or persons connected with them has any interest, direct or indirect, in the Joint Venture.

9.       STATEMENT BY DIRECTORS

The Board having considered all the relevant factors in respect of the Joint Venture, is of the opinion that the Joint Venture is in the best interest of the Company.

10.     HIGHEST PERCENTAGE RATIO APPLICABLE PURSUANT TO PARAGRAPH 10.02(G) OF BURSA MALAYSIA SECURITIES BERHAD MAIN MARKET LISTING   

          REQUIREMENTS

The highest percentage ratio applicable to the Joint Venture pursuant to paragraph 10.02(g) of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements is 0.69%.

The joint press release on the SHA and Joint Venture is attached for information.

Further announcements will be made upon any material developments in regard to this matter

This announcement is dated 22 December 2022.