Markets
Malaysia: the price-fixing date and Bursa's 10% mandate
Malaysia permits the instrument, but only with the modification written into paragraph 6.05. Bursa prices a new issue against a declared price-fixing date, at a discount of no more than 10% to the 5-market-day volume weighted average market price. A conversion price that refixes at each conversion departs from that, and a departure needs prior shareholder approval for its precise terms.
Key takeaways
- The price-fixing date is the constraint, not the discount. Paragraph 6.04(a) permits a discount of no more than 10% to the volume weighted average market price for the 5 market days before a declared price-fixing date.
- Paragraph 6.05 is the door, and it is a vote. Where an issue departs from any applicable requirement of 6.04, prior shareholder approval is required for the precise terms and conditions. A refixing formula is a departure, not a ban.
- Headroom is 10% of the register. Paragraph 6.03(1) lets directors issue up to 10% of total issued shares, aggregated over 12 months. Singapore's non-pro-rata bucket is twice that.
- The 20% relief expired on 31 December 2022. A raise sized on 20% today is sized on a lapsed pandemic measure.
- The Malaysian convertible is the ICULS. Irredeemable convertible unsecured loan stocks carry a conversion price stated in sen, not a formula that reads the market later.
The price-fixing date is where the structure breaks
Every Malaysian placement circular carries the same phrase: price-fixing date. It is the day the directors fix a tranche's price. Paragraph 6.04(a) works backwards from it: the issue price may be at a discount of not more than 10% to the volume weighted average market price for the 5 market days immediately preceding that date. The local abbreviation is VWAMP, written in announcements as 5D-VWAMP.
That is a market-referenced price, struck against a fresh reading of the tape for each tranche — but not a price determined at the moment of conversion. An instrument whose conversion price resets against a trailing average at each conversion has no single price-fixing date, so it has no anchor for the 6.04(a) test.
Chapter 6 does supply the door, and it defines this market. Paragraph 6.05 provides that where an issue of shares or other convertible securities departs from any applicable requirement in 6.04, the issuer must obtain prior shareholder approval in general meeting for the precise terms and conditions. A refixing formula is therefore not prohibited here. It is a departure, and a departure must be written out in full and carried at a meeting before the first tranche is priced.
Ten per cent, and where the other ten went
The standing authority is the general mandate approved by ordinary resolution at the annual general meeting under paragraph 6.03(1), reflecting sections 75 and 76 of the Companies Act 2016: up to 10% of total issued shares, aggregating shares and convertible securities issued in the preceding 12 months. Bursa doubled it to 20% in April 2020 and extended that to 31 December 2022. Anything larger is a specific mandate: a circular, an extraordinary general meeting, and usually a named placee.
| What the structure needs | What Chapter 6 provides | Effect on the deal |
|---|---|---|
| A price read at conversion | A price read over 5 market days before a declared price-fixing date | A 6.05 vote, or scheduled tranches |
| A discount that pays for illiquidity | Not more than 10% to the 5-day VWAMP | Economics move to tenor and warrants |
| Committed capacity | A 10% general mandate renewed annually | A specific mandate and an EGM for more |
| A hybrid that reprices as the stock moves | ICULS and RCULS at a stated conversion price | Repricing by adjustment event, not formula |
| Not an offer, quote or rate card. | ||
ICULS, and what a Malaysian conversion price looks like
ICULS stands for irredeemable convertible unsecured loan stocks, and with its redeemable cousin the RCULS it is the hybrid a Malaysian board recognises. It carries a conversion price stated in sen, so the shares a holder receives are known on day one, and that price moves only by adjustment for a rights issue, a bonus issue or a consolidation — the opposite of the mechanism in dilution and conversion mechanics. Chapter 6 requires conversion shares to be issued within 8 market days of the subscription form and payment, so settlement is fast even where pricing is slow.
Local note
ACE and LEAP are separate rulebooks. The ACE Market has its own Chapter 6 and numbering — the general mandate limit sits at rule 6.04(1) there, not 6.03(1) — so a Main Market reference does not carry across. LEAP works like neither.
The Shariah question a foreign investor will not ask
A large part of the Malaysian institutional bid is restricted to securities on the Securities Commission's list of Shariah-compliant securities. Losing that classification does not stop a company trading, but it changes who may own it — for a small-cap, a liquidity event in the wrong direction. A conventional interest-bearing convertible puts that question on the table.
What is left, once the structure is modified
Malaysia is not closed. The instrument is rebuilt: terms settled and voted through in advance under 6.05 or a specific mandate, tranches scheduled rather than called, economics moved into tenor, security and warrant coverage. Read how a listed-issuer private placement is documented and convertible notes for listed issuers, and, where there is also a United States listing, Rule 144 and restricted securities. Check the eligibility test first.
General information, not legal advice. The Main, ACE and LEAP rulebooks differ and are amended regularly. Bursa's document server declines automated requests, so paragraphs 6.03, 6.04 and 6.05 were verified through indexed extracts of Chapter 6 and circulars quoting it, not by reading the rulebook. Whether Bursa would approve a refixing formula put to a 6.05 vote is a matter for the Exchange. Take advice from qualified Malaysian counsel.
Related markets and reading
Same family
Singapore
Same 10% ceiling, far more headroom, and a vote that lifts the cap.
Compare SGX placement capacity →Same family
Indonesia
Another 10% cap, but a computed minimum price, not a capped discount.
How PMTHMETD pricing works →Same family
Hong Kong
A mandate regime with a 20% discount rule and a dilutive-issue restriction.
The HKEX general mandate →Primary sources
- Bursa Malaysia — Main Market Listing Requirements
- Bursa Malaysia — Chapter 6, New Issue of Securities
- Bursa Malaysia — Chapter 6 questions and answers
- Bursa Malaysia — ACE Market Listing Requirements
- Securities Commission Malaysia — Equity Guidelines
Financing a Bursa Malaysia issuer: frequently asked questions
Can a Bursa-listed company issue a convertible whose conversion price floats?
Not under the general mandate. Bursa's default pricing rule works off a price-fixing date declared in advance, with the discount from the 5-market-day VWAMP capped at 10%, and a price that resets at each conversion has no price-fixing date to work from. Paragraph 6.05 is the route: an issue departing from those requirements needs prior shareholder approval for its precise terms and conditions.
How much can a Malaysian issuer place without going back to shareholders?
Ten per cent, aggregated over the preceding 12 months. Anything larger is a specific mandate: a circular, an extraordinary general meeting and usually a named placee.
Is the temporary 20% general mandate still available?
No. Bursa raised it to 20% as a relief measure announced in April 2020 and extended it to 31 December 2022. The standing limit is 10% again, so a raise sized on 20% is sized on a lapsed measure.
Are placement shares tradable when they are issued?
Placement and conversion shares are of the same class as the quoted shares and trade once Bursa admits them to the Official List. Malaysia has no Rule 144 analogue and no general statutory holding period here. We have not identified a lock-up on a placement to an unconnected party, but a placement to a related party engages the related party transaction rules.
If this is about a live situation
A Bursa-listed issuer reaches this structure through paragraph 6.05, which puts the precise terms in front of shareholders before anything can be drawn. If that vote is still ahead of you rather than behind you, the instrument comparison is the more useful page, and the eligibility criteria set out what gets looked at first.