RAISE YOUR GAME

T H E

P R O G R A M M E

In partnership withAn initiative by Delivery partner

After months of planning, Capital MarketsMalaysia, an affiliate of the SecuritiesCommission Malaysia, is delighted toannounce the launch of the ELEVATEProgramme!

This 12-month programme, tailoredspecifically for companies within the mid-tier segment of Malaysia’s economy, willbe funded in part by the Capital MarketDevelopment Fund (CMDF), and willprovide guidance on business redesignstrategies, fundraising models andaccess to financing through the capitalmarket.

What’s the Mid-Tier Segment?Mid-tier companies are defined byMATRADE as manufacturing sectorenterprises with annual revenuesbetween RM 50million to RM 500million,and service sector enterprises withannual revenues of RM 20 million to RM200 million.

Why We Developed ELEVATEThe ELEVATE programme was developedwith the aim of supporting the growth ofmid-tier companies that have thepotential to grow their businesses to thenext level. The programme’s mainobjective is to prepare these selectedcompanies to become investment-readyfor funding through the capital market, beit through venture capital, private equity,listing on Bursa Malaysia, equity

crowdfunding or peer-to-peer lending.

Participants andEligibility CriteriaThe programme is intended for foundersand C-level executives. CMM plans to put300 mid-tier companies through theprogramme over the next three years, andis currently building a pipeline of eligiblecompanies with the support of ourprogramme partners: MATRADE, MDECand Endeavor Malaysia. Each of thesepartners, through their respectivenetworks, will collectively create a funnelof future cohorts for the programme.Companies that fall within the mid-tiersegment (as defined above) may applyonline at www.capitalmarketsmalaysia.com/elevate-programme/

The ProgrammeThe programme involves three phases,starting with reinforcing business andfinancial management fundamentalsbefore moving on to design thinking andthe introduction of strategic fundingoptions and finally culminating in actuallive pitch sessions with potential local andforeign investors who are registered inMalaysia. Apart from the formal trainingsessions, participants will also benefit fromsignificant informal mentoring andnetworking sessions with business leaders.

Delivery PartnersCMM has partnered with various expertsfor the delivery of the programme and hasreceived significant contribution in the formof coaching and mentoring from Malaysianbusiness leaders and seasonedentrepreneurs. The lead delivery partner is1337 Ventures, with training, coaching andmentoring also provided by renownbusiness professionals and practitioners,guest speakers and mentors from PE andVC firms, investment banks and successfulentrepreneurs.

The Pitch PlatformPast participants of the ELEVATEProgramme will be profiled on an onlineplatform with their funding mechanism andinvestor memorandum available topotential investors, as well as private equityand venture capital firms that areregistered in Malaysia.

JULY 2020 CAPITAL MARKETS MALAYSIA NEWSLETTER

The Bulletin

“The aim of the ELEVATE programme is tosupport growth of mid-tier companies thathave the potential to nurture theirbusinesses to the next level of growth.Recognising that funding is a key elementin a company’s growth strategy, theprogramme prepares these enterprisesfor fundraising through the capitalmarket, an objective which is aligned withthe Securities Commission Malaysia’s(SC) own market development initiatives.”

- Datuk Zainal Izlan Zainal Abidin,Chairman of CMM.

MONTH 1 – 4 MONTH 5 – 8 MONTH 9 – 12

In this phase, participants will be introduced toimportant topics to establish themselves as aprofessional company that is ready for capital

raising. These topics includes:

Reinforcing strategy, branding/marketing, andgovernance - skills crucial in ensuring that thecompany’s foundation can support its growth.This phase focuses on introducing fundingoptions that will help them raise capital toexecute their short, mid, and long termstrategies. Prepares the company in theirfundraising exercises, equipping them withrelevant skills and documents to impress andsecure their future funders, be it for Venture

Capital, Private Equity, or IPO.

After weighing the pros and cons of each fundingexercise, preparing crucial documents for capitalraising exercise and conducting an audit on yourbusiness, the programme will assist companiesto fine-tune business plans and equity stories, byassisting the implementation of internalcontrols, this is important when working with theright external team to ensure that nothing gets

communicated.

Design thinking has been adopted by many topcompanies such as Coca-Cola, Apple and IBM.Its two tenets are customer-centricity and rapiditeration to validate a hypothesis quickly andcheaply

Aims to create an understanding of theimportance of the role of ethics and governancein every organization

Ethics form the foundation of governanceframeworks

Identifying what investors look for in yourcompany

Remedying your shortcomings: creating anactionable roadmap

Justifying your unique value proposition

STRATEGICCONSIDERATIONS

CAPITAL RAISEPLANNINGREINFORCE

There are a few ways to raise capital. Eachmethod, be it via Venture Capital, Private Equityor Initial Public Offering, has it pros and cons

Knowing the funding option that suits you bestcan help you prepare a roadmap to identify andaccomplish your checklist to increase yourchances in capital raising

Demonstrates the features or USP of anenterprise, designed to make the business anattractive investment for investors

The equity story is the central element inmarketing and pricing of your business' shares

As a crucial marketing element, the equity storyneeds to verifiably present detail

Implementing functions and internal controls togive investors’ confidence

Delegating task to ensure a smooth andsuccessful fundraising exercise

COURSE 1 (2 DAYS) COURSE 1 (2 DAYS) COURSE 1 (1 DAY)

DESIGN THINKING GOVERNANCE AND ETHICS FINE-TUNE BUSINESS PLANAND EQUIT Y STORY

COURSE 2 (1 .5 DAYS) COURSE 2 (1 DAY) COURSE 2 (1 DAY)

EVALUATE FUNDRAISINGOPTIONS EQUIT Y STORY IMPLEMENTATION OF STRUCTURE

AND INTERNAL CONTROLS

COURSE 3 (1 DAY) COURSE 3 (2.5 DAY) COURSE 3 (1 DAY)

DYNAMIC MARKETING EVALUATE STRUCTURE, FINANCIALSAND INTERNAL CONTROLS RIGHT EXTERNAL TEAM

Many marketing campaigns that worked 10years ago may be ineffective now. The world ischanging, and so are your customers. Thismodule helps the company keep pace with theconsumer market which moves faster than everbefore

Effective internal control structure: company’splan of organization

Ensuring compliance with company policies withaccurate operating and accounting reports

Identifying important components for capitalraising

Identifying main players in your industry andmarket

Team selection criteria

hours of trainings hours of pitchbootcamps

hours of mentorshipand coaching sessions

networking sessions Up to 10 monthlyevents/seminars

96 32 72 6 10

Supplementary ActivitiesApart from the formal training sessions, participants will also benefit from informal mentoring and networking sessions withbusiness leaders through the supplementary activities of the programme.

PITCHING SESSION(Once every 3 months)

(Once every 3 weeks)

(Once a month)

To ensure participants get used to pitching, we will be running 3workshops on pitching such as “Pitching 101”, “Develop your pitch” andgeneral “Pitch Sessions” to have the art of storytelling ingrained, whilstgetting them used to pitching,

COACHING We will organise bi-weekly scheduled coaching sessions to reviewparticipant’s materials and homeworks, ensuring that they have the tasksdone prior to the next module.

WORKSHOPS To equip these companies with relevant skills, we will engage technicalpartners such as AWS, Google, Facebook, Microsoft, and more to conductmonthly workshops for participants.

(Once every 2 months)

GALA NIGHTS/NETWORKING

Bi-monthly events will be organised for participants to network and pitchto past EY Entrepreneurs of the Year candidates, Digerati50 leaders,external PE firms, Investment Banks, Venture Capital Firms, or othersuccessful entrepreneurs.

KEY OUTCOMESEquip participants with the relevant knowledge offunding options, equity story, financial structuresand capital raising readiness

Provide coaching and mentorship to eachparticipants in regards of professionalizing theirbusiness

Equip participants with crucial knowledge onbusiness finance modeling, internal controls, andoperational structures that meet internationalstandards of governance

Provide participants access to crucial industrypartners and funders during their fundraisingexercise

Ensure participants have a solid foundation tosupport their growth, and professionalize theirbusiness processes

01

02

04

05

03

#news #capitalmarkets #Malaysia

Capital Markets Malaysia (CMM) has appointed BrahmalVasudevan as a member of its board. Brahmal is the Founderand Chief Executive Officer of Creador, a private equity (PE)firm he founded in 2011. He is also Chairman of EndeavorMalaysia which is a high impact entrepreneurship movementwith a global reach.

CMM appoints BrahmalVasudevan to Board

Cradle Fund, on 19 June launched Cradle InvestmentProgramme Ignite (CIP Ignite) and Cradle InvestmentProgramme Accelerate (CIP Accelerate) following itsannouncement last year to further enhance its CIP300 andDEQ800 programmes. The CIP Ignite offers conditionalgrants for deep tech innovation and other innovative tech-based companies while CIP Accelerate provides funding ofup to RM2million focused on accelerating the growth of deeptech companies and spin-offs from universities and researchinstitutes.

Cradle Fund launches2 new programmes

The Securities Commission plans to allow up to RM 100,000daily online settlement in the second half of 2020, from thecurrent limit of RM 30,000 to RM 50,000.

SC Doubles Online Settlement Limits

The SC on 18 May 2020 revised the following guidelines

1. Guidelines on Islamic Fund Management• Incorporating requirements for purposes of determining

substantial activity of an Islamic fund as part of thequalifying criteria for the certification of Islamic fund bythe SC.

• Introducing a new section specifically for the certificationof Islamic fund including the application process andform.

2. Guidelines on Unit Trust Funds• Inserting requirements for the application to establish a

feeder fund• Removal of trustee-related requirements pursuant to

such requirements being superseded by the Guidelineson the Registration and Conduct of Capital MarketServices Providers

• Inserting requirements to allow unit trust funds to investin gold ETF and leveraged ETF or inverse ETF

Revised Guidelines onIslamic Fund Managementand Guidelines on Unit Trust Funds

26 June 2020 - SC and Bursa Malaysia have decided tofurther extend the temporary suspension of short-selling to31 December 2020. There will not be any change to thescope of the suspension, in that, it applies to Intraday ShortSelling (IDSS) and Regulated Short Selling (RSS), as well asintraday short selling by Proprietary Day Traders.

Further Extension of ShortSelling Suspension

3 June 2020 - Bursa Malaysia launched Bursa Academy – ane-learning platform mainly for retail investors across thesecurities, derivatives and Islamic capital markets. The multi-lingual platform aims to be a comprehensive one-stop e-learning portal that combines both knowledge sessions andinteractive gamification through a simple and user-friendlyplatform.

e-Learning Platform forRetail Investors by Bursa Malaysia

Bursa Malaysia Bhd has rolled out a new set of features onits "Bursa Anywhere" mobile application (app), allowinginvestors to apply for new Central Depository Services (CDS)accounts and register for e-dividends using the app.

New Features on ‘Bursa Anywhere’

#news #capitalmarkets #Malaysia

6 June 2020 - SIDC will offer the following schemes forDisplaced Workers to enter the capital market workforce andto strengthen youth employability within the capital market:

1. Training Scheme for Marketing Representative (MR)2. Capital Market Graduate Apprenticeship (CMGA)3. Training Scheme for Youths Pursuing a Career in

Corporate Finance (CF)4. Islamic Capital Market Graduate Training Scheme

(ICM GTS)

SIDC Initiatives for DisplacedWorkers to Enter theCapital Market Workforce

26 June 2020 - In its first foray into VC investment, Petronas,through its corporate venture capital arm Petronas Ventures,is investing in agriculture technology start-up BraintreeTechnologies Sdn Bhd. Petronas Ventures has entered intoan agreement with Braintree Technologies, which developsartificial intelligence (AI)-driven robots for farm automation,often associated with smart farming. Petronas said that thetransaction is expected to be completed in early July this yearand that it is actively scouting for visionary entrepreneurs inMalaysia and around the globe to solve critical problems inthe industrial and energy space through breakthroughtechnology and innovative business models to support itsbusiness growth and sustainability agenda.

First venture capital investmentin Malaysia by Petronas

Permodalan Nasional Bhd (PNB) has named AhmadZulqarnain Onn as president and group chief executive,effective tomorrow, following the sudden resignation of JalilRasheed on 15 June. Zulqarnain was formerly KhazanahNasional Bhd deputy managing director in charge of thestrategic fund and managing the sovereign wealth fund’sstrategic holdings in government-linked companies.

New CEO for PNB

The SC’S Shariah Advisory Council (SAC) has resolved inprinciple that it is permissible to invest and trade in digitalcurrency and digital tokens on registered Digital AssetExchanges – an important resolution that could spur greaterdevelopment and investments in Digital Assets.

SC’S SAC Weighs in on Permissibilityof Digital Currency and Tokens

18 June 2020 – Bursa Malaysia announced 6 new additionsto the constituents of the FTSE4Good Bursa Malaysia(“F4GBM”) Index. The F4GBM Index measures theperformance of public listed companies (“PLCs”)demonstrating strong Environmental, Social and Governance(“ESG”) practices and was launched in December 2014 witha total of 24 constituents. As at June 2020, there were 6 newadditions and 2 deletions from the F4GBM Indexconstituents, bringing the total number of constituents to 73.

New constituents onFTSE4Good Bursa Malaysia Index

Litecoin, the fourth digital asset to be approved by the SC,was made available to Malaysian customers on 7 July 2020.According to Luno, Litecoin which was created in 2011, is atop-10 cryptocurrency with a market cap of US$2.7 billion.

Luno Malaysia LaunchesSC-Approved Litecoin

Capital Markets Malaysia in joint collaboration with DeutscheBank hosted a conference call for foreign and domesticinvestors and capital market intermediaries on 18th June2020, garnering 256 registered listeners from various markets.The conference call conversation with Datuk Syed Zaid Albar,Chairman of Securities Commission Malaysia (SC) wasmoderated by Jacqueline Williams, Managing Director of DirectSecurities Services Malaysia, Deutsche Bank.

We bring you the highlights we thought were most interestingand relevant.

The pandemic has caused a macro-economic shock bringingthe global financial system to face the dual challenge ofsustaining the flow of credit while in an environment ofdeclining growth and heightened risks.

In the SC’s view, the pandemic doesn’t change thefundamental principles of the market:

Malaysian CapitalMarket UpdateA Conversation with Datuk Syed Zaid Albar

The market must continue to function.1The markets must continue to support the realeconomy.2The SC, as the capital market regulator, must ensurethe operational and financial resilience of marketinfrastructures, the operational capability of marketusers, and the steady and timely flow of information tothe markets

3

The SC must provide appropriate regulatory flexibility tohelp market participants address the challenges facedwhile maintaining market integrity and investorprotection.

4

The Relief MeasuresThe SC waived listing-related fees for IPOs and easedfundraising for listed companies through private placements.

As for alternative fundraising, it allowed for issuance ofconvertible notes to Venture Capital/Private Equity. The SC alsoinstated higher fundraising limits on ECF and allowed forsecondary trading for ECF/P2P. In addition, the SC shored upgovernment funding support in its co-investment scheme forECF/P2P.

The SC approved several measures for Bursa Malaysia enablingflexibility for brokers to manage margin accounts and expandthe list of collaterals for purposes of margin financing.

• The Exchange will give more flexibility and discretion tobrokers by removing the requirement to automaticallyliquidate their client’s margin account if the equity in themargin account falls below 130% of the outstandingbalance.

• The Exchange will allow brokers to accept other collaterals,such as bonds, collective investment schemes, unit trusts,gold and immovable properties for purposes of maintainingtheir clients’ margin account if such collaterals are valued asper the broker’s credit policy.

Digitisation measures put in place enabled brokers to offeronline opening of trading and central depository accountswithout wet signature, as well as higher daily online tradesettlement limits of RM 100,000.

The SC facilitated various e-corporate actions by introducing theguideline for virtual and hybrid general meetings, facilitatingtake-over offers digitally and facilitating for e-share conversionfor convertible products.

Finally, it issued new Guidelines allowing advertisers greaterflexibility in using a wider range of online advertising platforms.

"As to the question of whether these actions can set aprecedence for regulatory reaction to future volatility, once thepandemic is over, we will need to review and determine if theseactions would be appropriate going forward, depending ofcourse on prevailing circumstances."- Datuk Syed Zaid Albar

The Digital AgendaThe SC in 2015 embarked on implementing a Digital Agenda forthe Capital Market. Since then, it has introduced digitalfundraising and investment avenues such as equitycrowdfunding (ECF), peer-to-peer financing (P2P), robo-advisory(Digital Investment Management), and digital asset exchanges(DAX). This has helped widen the inclusiveness of the capitalmarket to benefit a broader range of issuers and investors.

For the stockbroking industry, the SC, through its involvementin the Brokerage Industry Digitisation Group’s (BRIDGe) hasfacilitated a more efficient post trade and settlementexperience for clients through digitisation. The SC also soughtto ensure seamless online trading by investors by issuance of aPractice Note requiring brokers to remove trading blocks onsecurities undergoing share consolidation.

The Fund Management Industry Digitisation Group (FMDG)was set up in 2019 to facilitate the digitisation of the fundmanagement industry. The Group is looking towards enhancinginvestor experience and overall operational efficiency of theindustry through straight-through-processing (STP) solutionsand discussions on the need for infrastructure that can enablegreater cross value-chain data and analytics capability.

The SC also published a DLT Architecture Blueprint forunlisted and OTC markets two years ago, based on a proof ofconcept (POC) project done. Since then, it has observed somemarket participants undertaking similar POCs and pilot projectsfor different segments of the capital market value chain.

Precedence for Future ActionThrough the crisis, regulators have faced the challenge ofmaking urgent changes in stressful and sometimes distressedsituations, which must deliver upon their objectives, but also beproportionate, reasonable and lawful. When time is of theessence, it is hard to anticipate every single possibility, or toanalyse and thoroughly consider all the impacts of regulatoryactions taken to deal with urgent issues.

Cognisant of the risks that digitisation can pose for the marketit issued Guidelines on Management of Cyber Risk for theindustry as a starting block to actively facilitate the sharing ofcyber security information and best practices within theindustry, as well as organisation of an annual cyber drill toensure all market participants are well versed in their cybersecurity practices.

“If there is a silver lining to the Covid-19 crisis, it is the fact thatit has forced companies to forge ahead with their digitalstrategies to ensure compliance with their legal and regulatoryobligations. In some cases, they have had to rethink and revisitold strategies. This is definitely a positive.”- Datuk Syed Zaid Albar

In the digital asset space, which is classified as a form ofsecurity, the SC formally introduced a framework to regulateDigital Asset Exchanges (DAX) in January 2019. By June lastyear, the SC had three DAX operators registered - an area ofpotential for growth in the alternative assets industry.

The SC CultureFrom inception of his position as Chairman in 2018, Datuk SyedZaid Albar saw an opportunity to enhance the capital marketecosystem, one in which the SC acts as a catalyst to help themarket evolve.

Internally, this is referred to in SC, as the 3As culture where theaim is to build a capital market and a regulatory institution thatis Accessible, Agile and Accountable.

You're Invited!

To register for the event please email to general@capitalmarketsmalaysia.com

Capital Markets Malaysia invites you to the Virtual Launch of

A platform to advance the development ofSustainable Finance within Malaysia’s financial sector

23 July 2020 | 3.30 - 4.00 PM

An initiative by

Guests of HonourChairman of the Securities Commission Malaysia

British High Commissioner to Malaysia

The capital market should provide access to the fullspectrum of issuers, investors and intermediaries. TheSC is present to broaden opportunities to under-servedsegments of the market.

The capital market and the SC must be agile andevolve in response to changes in the economiclandscape as well as user demands. Modernisation ofthe capital market is important but warrants theflexibility of regulatory framework to facilitate this.

The SC has a heavy public service mandate whichimplicitly means that its people should discharge theirduties with a strong sense of accountability. Thismeans putting the interest of the capital market andorganisation first and to uphold personal integrity at alltimes.

1

2

3

The COVID-19 crisis served as a catalyst for transformationinitiatives, driving the adoption of operating models that aremore automated, increasingly data driven and supported bytechnologies.

The SC will also need to improve on its risk management as itmust also adapt and continue to facilitate a strong digitalagenda for the capital market. A continued emphasis ondisclosure, improving governance and standards withinintermediaries, and regulatory oversight particularly in reportingand engagement is also apparent.

The SC expects that there will be greater interest in SRIs as thepandemic has been a wake-up call on the importance ofanticipating and managing “green swan” risks. It has highlightedhow finance can be leveraged to enable the development of amore sustainable economy. The development of climate andsustainability-related risk instruments for the capital market willbe crucial for the SRI segment’s future.

The calls for nationalism and deglobalisation in recent yearshave grown louder, but recent events highlight how inter-connected we actually are. It is precisely because of this that weshould aim to work better together, not just manage cross-borderrisks but also tap into opportunities for us to grow together.

The “New Norm”In recent months, vola�lity in the market may become a“new norm” which may require Investors and fundmanagers to con�nuously adjust their por�olios to respondto the market condi�ons.