Doctrine of Equal Access to Information by Investors for Listed Companies Through Disclosure of Material Information - UK v US v Australia v Malaysia Perspectives

Introduction

Listed companies are public entities whose shares are traded on a stock exchange and available for public to purchase or sell. These companies are required to fulfill on-going legal obligations imposed by exchange regulators on listed entities in their respective jurisdictions.

Among other continuing obligations, listed companies shall ensure that investors have equal access to material information of their companies that may significantly impact the price of their shares.

Such information understandably must not contain any deliberate falsehoods, misleading statements or material omissions. Upon receipt of the information, prospective and existing investors will be in a position to analyse the relevance of the information to their investments. This substantiates the rationale of the principle of ensuring not only equal, but also timely access to information by investors in the market whose investments in shares may otherwise be prejudiced due to lack or late receipt of latest material information of the listed entities that issued the investment shares.

Table 1 seek to compare the requirements on disclosure of material information by listed companies present in their respective jurisdictions.

Table 2 summarises the general obligations of listed companies to disclose material information of their business’s affairs to the public in their respective jurisdictions.

Besides the above general principle on disclosure of material information, the relevant exchange regulators have also provided a list of events or incidents which commonly require disclosures by listed companies.

Comparative Studies

Conclusion

In all the above four jurisdictions (United Kingdom, Australia, United States and Malaysia), public listed companies are obliged to disclose material information of their affairs to their respective exchange regulators and to the public via media announcements.

The objective is to ensure that existing and prospective investors have ready access to the required information that may influence their subsequent investment decisions including whether to acquire or dispose of shares in the listed entities following receipt of information of their latest affairs. The obligation is however subject to certain exceptions including that pertaining to methods of disclosure, selective disclosures and delayed disclosures beyond the discussion of this article.

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1. Bursa Malaysia Listing Requirement https://customer.bursamalaysia.com:8080/MainLR/Pages/MainChapter9.aspx.
2. Para 9 of London Stock Exchange Listing Rules: Continuing Obligation https://www.handbook.fca.org.uk/handbook/LR.pdf.
3. Para 2.2 DTR: Disclosure of Inside Information – https://www.handbook.fca.org.uk/handbook/DTR.pdf.
4. https://wallstreet.cch.com/PCXTools/PlatformViewer.asp?selectednode=chp_1_1_6_2&manual=%2FPCX%2FPCXRules%2Fpcx-rules%2F.
5. Australian Securities Exchange (ASX) Listing Rules https://www.asx.com.au/documents/rules/Chapter03.pdf.
6. 9.03 LR Bursa Malaysia.
7. Para 3.1 ASX.
8. 9.02 LR Bursa Malaysia.
9. DTR 2.2.1A with referenceto Article 7(1) EU Market.
10. DTR 2.2.4 with reference to Article 7(1) and 7 (4) EU Market.
11. DTR 2.2.5.
12. Rule 5.3-E (I)(2) on Rules of NYSE Arca.
13. Rule 3.1 Australia Securities Exchange.
14. 9.03 LR Bursa Malaysia.
15. Rule 5.3- E (i) (2).
16. Para 3.1 ASX

Written by:

Lee Kin Hing (general@azmilaw.com)

Nurul Syazwani Azman (general@azmilaw.com)