The Securities Commission Malaysia (SC) and Bursa Malaysia Securities Berhad have unveiled a comprehensive suite of proposed enhancements to the Leading Entrepreneur Accelerator Platform (LEAP) Market. Dubbed “LEAP Market 2.0,” the initiative aims to revitalise the alternative capital-raising platform, making fund-raising seamless for micro, small, and medium enterprises (MSMEs) while broadening investor access.
According to a commentary by BDO Malaysia’s Advisory Executive Director, Eng Cha Lun, and Advisory Director, Arthur Cheng, the current LEAP Market—originally launched in 2017—has suffered from persistent illiquidity. Because trading has been strictly confined to sophisticated investors, the limited pool of market participants has resulted in thin trading volumes, subsequently discouraging new listings and hindering accurate price discovery.
To rectify these structural pain points, the regulators have issued a public consultation paper outlining four transformative regulatory changes.
Key Structural Reforms Under LEAP Market 2.0
1. Expansion of the Investor Pool
In the past, trading of the shares in LEAP Market companies was limited exclusively to sophisticated investors. Due to this small pool of market participants, these companies have generally been illiquid. Under the Proposed LEAP Market 2.0, the investor pool will be expanded to include retail investors, subject to Prescribed Investment Limits.
Retail investors will be permitted to invest up to a maximum of RM100,000 for the subscription of securities offered in an initial listing or secondary fundraising. Furthermore, their participation is subject to a total investment limit of RM250,000 at any point in time, which includes a cap of RM100,000 per issuer in the primary market and RM100,000 per broker in the secondary market. Sophisticated investors will remain exempt from these limits. This expansion is designed to create a more vibrant, liquid marketplace, providing promoters with better exit opportunities to realize their investments and enabling better price discovery on company valuations.
2. Streamlined Disclosure Requirements
Currently, all listing applicants in the LEAP Market are required to issue an extensive Information Memorandum based on prescribed regulatory requirements. The new framework introduces an alternative disclosure document called the “Listing Document.”
This document focuses on a simplified, structured format while retaining the essential data required to support informed investment decision-making. By enhancing clarity, improving consistency, and facilitating greater standardization across submissions, this approach aims to ease market access for smaller businesses and significantly lower overall listing costs.
3. Simplified Graduation to the ACE Market
Under the existing rules, LEAP Market companies seeking to transfer their listing to the ACE Market face restrictive hurdles. They are required to request a mandatory withdrawal of listing from the LEAP Market and offer shareholders an exit offer or an alternative equitable exit mechanism.
The Proposed LEAP Market 2.0 will completely remove this mandatory withdrawal of listing and exit offer requirement. Eliminating these administrative procedures will remove major bottlenecks, resulting in a much faster, smoother, and more cost-effective migration pathway for growing companies.
4. Fast-Track Pathway for Equity Crowdfunding (ECF) Companies
Presently, companies listed on equity crowdfunding platforms are not permitted to apply for a direct transfer to the LEAP Market. While ECF platforms have historically been accessible to a wider investor base, investments in these MSMEs have remained largely illiquid due to small deal sizes and fragmented capital-raising platforms with differing requirements.
The new framework introduces a direct admission pathway for eligible ECF companies, allowing them to gain easy access to a more recognized market to enhance their corporate profile, visibility, and institutional growth.
Eligibility Criteria for ECF Direct Admission
To qualify for the new direct transfer pathway to the LEAP Market, an ECF company must fulfill the following benchmarks within seven years prior to the date of its initial listing submission:
- Fundraising Track Record: Successfully completed at least one equity fundraising exercise on the hosted ECF platform where it was originally active.
- Capital Threshold: Raised an aggregate of RM5 million through its hosted ECF platforms, Venture Capital (VC) firms, or Private Equity (PE) corporations and management firms.
- Suitability: Demonstrate suitability for listing on the LEAP Market regarding its business operations, corporate governance record, public interest, and the adequacy of its disclosures.
- Advisory Retention: Secure the services of a Continuing Adviser for at least one full financial year upon its formal admission to the LEAP Market.
- Mandatory Cooling Period: Submit its initial listing application to the Exchange only after the expiry of at least six months from the completion date of its most recent ECF equity fundraising round.
Additionally, eligible ECF companies will be permitted to submit their listing applications without a traditional Approved Adviser. Instead, recognised ECF operators or registered VC/PE firms can act as listing agents to liaise directly with Bursa Malaysia.
The introduction of the Proposed LEAP Market 2.0 marks a significant milestone in deepening Malaysia’s capital market ecosystem. By lowering financial and regulatory barriers to entry, strengthening liquidity, and establishing a unified pipeline from private seed funding to public markets, the new framework positions the LEAP Market as a vital engine for small business expansion.
These enhancements are expected to foster greater entrepreneurial activity, increase corporate visibility for mid-tier businesses, and contribute to the long-term competitiveness of the nation’s economy. The framework is currently undergoing active review, with Bursa Malaysia gathering public and industry feedback via its consultation paper before finalising the new listing amendments.
