IT has been eight years since the Leading Entrepreneur Accelerator Platform — better known as the LEAP Market — was launched by Bursa Malaysia at Invest Malaysia Kuala Lumpur on July 25, 2017.

At the time, the LEAP Market was envisioned as a capital-raising platform for small and medium enterprises (SMEs) that were not yet ready but aspired to eventually list on Bursa Malaysia’s ACE or Main Market.

Initially, the LEAP platform was met with considerable fanfare and enthusiasm. Many applauded the regulators for taking such a progressive step toward liberalising the capital markets.

For market participants and SME owners alike, the launch of the LEAP Market inspired great hope. It created a legitimate bridge connecting SMEs to the more established ACE Market — a clear pathway, or so it seemed.

Companies rushed to be listed, often under the simplistic assumption that their businesses were only a few steps away from becoming fully-fledged ACE Market companies.

In those early years, excitement ran high, and demand for LEAP Market listings was strong. A record number of SMEs applied in 2018 and 2019, resulting in 11 and 15 companies being listed, respectively.

However, just two years later, reality set in for many of these LEAP companies. Unfortunately, the initial enthusiasm waned, with only seven listings in 2020, 12 in 2021, five in 2022, one in 2023, four in 2024 and merely one so far as at May 2025.

New listings peaked in 2019 but slowed significantly as it became clear that transferring from LEAP to the ACE Market was not only onerous but, before 1 April 2023, nearly prohibitive.

This was a cold-sweat moment for many LEAP companies, as they realised that migrating from LEAP to ACE was far from automatic. In fact, the process was cumbersome, costly, and risky — companies had to be delisted from LEAP before applying to transfer to ACE.

Criticism quickly mounted.

The LEAP Market was labelled a dead-end, a market that investors largely ignored due to the absence of a formal transfer framework facilitating migration to Bursa’s other markets.

Perhaps the biggest drawback for LEAP-listed companies was their lack of liquidity. Many LEAP counters experienced zero trading activity on most days.

As we know, liquidity is the lifeblood of capital markets.

LEAP companies suffer from limited liquidity since trading is restricted to sophisticated investors, further hampering robust price discovery.

These issues led five companies since 2020 — Polymer Link Holdings Bhd, JM Education Group Bhd, Zenworld Holdings Bhd (formerly MyKris International Bhd), Cosmos Technology International Bhd, and TT Vision Holdings Bhd — to withdraw their listings from the LEAP Market.

In fact, both Cosmos Technology International Bhd and TT Vision Holdings Bhd had to endure the cumbersome process of delisting from the LEAP Market before submitting fresh applications to list on the ACE Market, due to the absence of a transfer framework at the time.

For a while, it seemed as though the LEAP Market was destined to become yet another high-profile initiative that had failed. However, the vocal feedback and persistent concerns from industry players and stakeholders did not go unheard. In April 2023, regulators revitalised the LEAP platform by introducing a transfer framework specifically designed for LEAP companies.

A New Dawn – The Transfer Framework Introduced in April 2023 The long-awaited LEAP Market transfer framework, designed to facilitate migration to the ACE Market, was finally introduced on April 1, 2023.

One of the most significant changes was the adjustment in the timing of a LEAP company’s delisting, which made all the difference.

Under the new framework, a company is delisted from the LEAP Market only after its successful transfer and listing on the ACE Market.

Previously, companies had to withdraw from the LEAP Market before applying to list on the ACE Market, risking their listing status if the transfer application was unsuccessful.

This earlier rule was a major deterrent, discouraging many LEAP companies from attempting the transition due to fears of losing their listing entirely.

Additionally, companies often faced the burden of paying advisory fees twice.

While the new process is still not entirely seamless—applicants must apply to withdraw from the LEAP Market and provide shareholders with an exit option or another equitable alternative—this relatively minor change in sequence offers significant reassurance.

It effectively opens the floodgates for LEAP companies to pursue transfers.

In other words, there is now a clear and viable pathway for LEAP Market-listed companies to graduate to the ACE Market and access a broader pool of investors.

The Statistics So Far With the transfer framework acting as the LEAP Market’s backbone since April 2023, how has the market progressed over the last eight years? Here are the key statistics: 1. A total of 57 companies have been listed on the LEAP Market. Currently, 45 remain listed, five have been delisted, and seven have transferred to the ACE Market. So far, no companies have transferred from LEAP to ACE and then to the Main Market.

2. Among the 45 existing companies, the top three sectors represented are Technology (31%), Industrial Products & Services (27%), and Consumer Products & Services (27%).

3. The majority of the 57 listings occurred in the early years. There was only one listing in 2023, four in 2024, and one only as at May 2025.

4. All delistings occurred in or before 2022 (prior to the introduction of the transfer framework in April 2023).

5. Two of the delisted companies subsequently listed on the ACE Market, with a gap of approximately six to 12 months between delisting and re-listing.

Of the 45 companies currently listed on the LEAP Market, 30 are profitable, with profit after tax ranging from RM30,000 to RM10.9mil. Notably, 10 LEAP companies recorded profit after tax (PAT) exceeding RM5mil— outperforming many companies on the ACE and Main Markets. This demonstrates that there are solid, profitable companies within the LEAP Market.

6. Of the 45 existing companies, 36 have experienced positive growth in market capitalisation since listing. Overall, their combined market cap has increased by approximately 125%.

7. The seven companies that transferred to the ACE Market collectively raised approximately RM268mil in ACE listings compared to merely RM33mil in their LEAP listings. Collectively, their total market capitalisation increased by more than 785% between the LEAP and ACE listings.

8. In 2025, two LEAP companies have successfully transferred to the ACE Market: (i) On May 8, geotechnical services provider Fibromat (M) Bhd transferred, raising RM17.8mil via the sale of 32.3 million shares at 55 sen per share.

(ii) On March 21, construction and engineering firm Lim Seong Hai Capital Bhd transferred its listing, raising RM168.08mil via 191 million new shares at 88 sen per share.

9. The average time taken by the seven companies that transferred from the LEAP Market to the ACE Market—from the date of their announcement of intention to transfer to their actual listing on the ACE Market is approximately 11 (Steel Hawk) to 20 months (Supreme Consolidated).

The Challenges Remain — Lack of Liquidity Is Still the Key! While progress has been made since its inception, key stumbling blocks remain for LEAP companies.

Chief among them is that the market remains restricted to sophisticated investors only. This limitation is the main cause of its lack of liquidity, making it less attractive as a fundraising platform.

Looking back, the perception issues facing the LEAP Market are similar to those encountered by the Mesdaq Market (now the ACE Market) about 20 years ago.

When Mesdaq was first launched, it was seen as a “leper market,” with few considering it a viable fundraising venue. It wasn’t until about ten (10) years later that the market gained traction, sparking a herd mentality where everyone rushed to list on the more dynamic and appealing ACE Market.

The LEAP Market is currently experiencing a similar perception challenge in its first decade.

Originally, the ACE (then Mesdaq) Market catered to technology companies with no profit track record.

Today, all ACE-listed companies have profit histories—a natural evolution we now see beginning with LEAP companies.

Today, many LEAP Market companies are profitable and of higher quality. Approximately 67%, or 30 out of 45 companies listed on LEAP, are profitable.

The new transfer framework introduced recently was a landmark move, removing the requirement for LEAP companies to delist before transferring to the ACE Market. This significantly reduces the risk for companies making that leap.

Furthermore, the price discovery mechanism requires LEAP companies to undertake a public share issue upon transfer to the ACE Market. This ensures that shares are underwritten and valuations remain orderly.

A public issue allows the market to determine pricing and liquidity, adding transparency and boosting investor confidence in the price discovery process for LEAP-listed companies.

As a result, we expect to see more transfers from LEAP to ACE as the gap between the two markets narrows under this framework.

However, the existing seven cases precedents show that the transfer process takes a relatively long time, averaging over 12 months. Some reconsideration of this process may be needed.

Despite these challenges, the LEAP Market remains an excellent starting platform for SMEs seeking to build their brand and gain exposure in a credible yet less overwhelming environment.

The biggest stumbling block: lack of liquidity, as retail investors (non-sophisticated investors) cannot trade in the LEAP Market.

As long as the LEAP market is limited only to sophisticated investors, the liquidity issue will remain.

This is a chicken and egg situation because the liquidity issue cannot be solved if the investor base is not widened.

If the liquidity issue is left unsolved, then investors will continue to shun the LEAP market as a whole.

As it is, investors are allowed to invest in peer-to-peer (P2P) financing and equity crowdfunding (ECF) platforms.

If investors can put in money in these schemes, then why shouldn’t they be allowed to invest in LEAP Market companies, which have stronger fundamentals, are a lot more established and are a lot more transparent? If the authorities allow ordinary investors to invest in Bitcoin and other cryptocurrencies, which have a much higher risk, why can’t retail investors invest in LEAP Market companies? There are at least 10 companies on LEAP market has PAT of more than RM5mil with retained earnings of more than RM25mil.

Fundamentally, it is almost an ‘infringement of a constitutional right’ for the regulators to make it difficult for any investor to buy and sell shares on the LEAP Market. Imposing such restrictions on investors' ability to trade risks undermining the fundamental principles of economic freedom and equal access.

We are, in fact, preventing investors’ access to good companies. However, if the authorities do want that extra layer of protection, we have some qualifications.

Perhaps the authorities could impose a limit on how much the investor can invest. For instance, a maximum of say RM30,000 or RM50,000 that an investor can put into a LEAP Market company.

The New Road Map established in May 2024 (a) Broadening the eligible investor class for LEAP Market within one year In May 23, 2024, the Securities Commission Malaysia (SC) unveiled its “Catalysing micro, small and medium enterprises (MSME) and mid-tier companies (MTC) Access to the Capital Market: Five-Year Roadmap (2024-2028)”, which has 36 initiatives under nine (9) strategies.

These include enhancing fundraising pathways, facilitating innovative products for MSMEs and mid-tier companies (MTC), boosting their market readiness and awareness, growing capital market touchpoints and re-energising the LEAP Market.

In the road map, the SC concedes that limited access and investment restrictions have contributed to liquidity and exit concerns.

“Access to the LEAP Market is currently limited to sophisticated investors. This may act as a barrier to a greater supply of capital for these market segments. Retail investors are increasingly seeking investment opportunities with high returns,” it notes.

“In order to tap into this source of capital, listed investment vehicles would benefit retail investors by enabling them to leverage the expertise of investment professionals and intermediaries. Proper investor safeguards would be essential, alongside product innovation, to attract more retail  participation.” Currently, sophisticated investors refer to individuals or entities that meet certain criteria set by the SC. First, there are high-net-worth individuals (HNWIs) with total assets of more than RM3 million.

Second, there are trust companies registered under the Trust Companies Act 1949 with more than RM10mil, or its equivalent in foreign currency, under management. Third, there are accredited investors such as licensed persons, unit trust schemes, banks and closed-end funds approved by the SC and Bank Negara.

A new initiative was introduced to attract a more diverse investor base locally and regionally and encourage greater capital flow into the LEAP Market.

Key features of the new guidelines on categories of sophisticated investors include a new category that takes into account the knowledge and experience of investors. Potential investors in this category are assessed based on their education, recognised financial association membership and practical experience in relevant sectors such as banking, capital markets or insurance.

Additionally, further flexibility on financial thresholds were introduced to expand the pool of HNWIs.

While the regulators “have done a lot in the past few years” in terms of broadening the definition and pool of sophisticated investors, the definition is not the issue.

Instead, what the authorities need to do is to allow retail investors to participate in the LEAP Market — but only in companies that have been listed for more than a year and have already had their accounts audited and published on the Bursa website.

Sophisticated investors are only needed to participate during the pre-initial public offering and IPO stages for LEAP Market. This is similar to the normal private placement exercises undertaken by ACE or Main Market companies, which allow the participation of only sophisticated investors only.

Think of the LEAP Market like a kindergarten — you need to do your two years of foundation before you graduate to primary school.

Once the company has been listed for more than a year and has already had its audited accounts published, this means the company would have been listed for almost two years. At this point, retail investors should be allowed to invest in the LEAP Market.

There is no longer a need to particularly protect the retail investor, as all publicly available information is accessible.

Retailers are assessable to publicly available information and they should be allowed to decide themselves if can trade on companies listed on the LEAP market.

Prohibiting retail investors from investing in LEAP Market companies can be seen as excluding them from opportunities to invest in potentially strong and promising companies, thereby hindering value creation for both capital market participants and corporates.

(b) Widening the pool of listing advisers in the next two to three years The SC is now considering allowing start-up accelerators, venture capitalists, private equity players, remisiers, as well as legal and accounting firms, to assume the role of approved advisers for the LEAP Market listing.

This initiative aims to diversify the pool of listing advisers, besides encouraging a more competitive market in the adviser space and a better pool of expertise to provide support services for SMEs.

Again, the issue with listing advisers is not about expanding the pool. The fundamental problem remains the lack of liquidity in the LEAP Market, since retail investors cannot trade there! Furthermore, the real issue is that whoever has been approved as the LEAP Market adviser should be given visibility and clarity that they will be able to hold their client’s hand when they transfer to the ACE Market.

If these advisers supported LEAP clients when they were small, they should not be sidelined when those clients have grown and are ready to transfer to the ACE Market. Instead, they should be allowed to continue advising them, given their longstanding relationship and understanding of the business.

The progression for the adviser should be clearly spelt out.

As it is, the criteria that are set out for the LEAP Market adviser to act as a transfer adviser for ACE Market are currently way too stringent and not practical for implementation.

For example, one of the current criteria for the approved adviser to LEAP companies to qualify as a joint approved adviser for ACE Market companies is that they must hire qualified personnel who have been approved by the authorities.

These professionals are known as Qualified Persons (QPs). In accordance with the SC’s guidelines and requirements, only QPs are authorised to lead corporate proposals such as IPOs, equity offerings, and listing transfers on Bursa Malaysia’s Main Market and ACE Market.

As of May 2025, the Malaysia SC has approved a total of 105 QPs across 19 Recognised Principal Advisers (RPAs). To qualify, QPs must be attached to an RPA. These 105 QPs serve the entire Malaysian capital market and are currently employed by various investment banks, represented by the existing 19 RPAs. Consequently, all QPs are fully utilized and in high demand.

As of May 2025, Bursa Malaysia hosts a total of 1,072 listed companies across its three primary markets: Main Market (809): ACE Market (218): LEAP Market (45).

The likelihood of these QPs joining a LEAP Market adviser is extremely low, and in fact, practically impossible. This is because by moving to a firm that is not an RPA, they risk losing their QP status after a few years, as maintaining the designation requires employment under an RPA.

Imposing a requirement for LEAP Market advisers to engage QPs before qualifying as RPAs is practically unfeasible due to the mismatch between the supply and demand of QPs in the current playing field.

Unless LEAP Market advisers are eventually permitted to qualify as RPAs under a revised regulatory regime, this constraint will remain. It becomes a classic chicken-and-egg dilemma — which comes first, and who should take the first step? A logical solution would be to allow existing LEAP Market advisers to be recognised as RPAs after meeting specific thresholds — for example, by successfully advising at least two or three LEAP Market listings.

This recognition would enable them to act independently and continue supporting their clients during the transition to the ACE Market.

If adopted, regulatory oversight could be exercised through post-implementation supervision and enforcement actions against any qualified LEAP advisers who fail to uphold the professional standards expected of RPAs.

A Fast-Track Process for LEAP-to-ACE Transfers — Like ACE-to-Main? Would regulatory authorities consider extending similar flexibility to LEAP Market companies transferring to the ACE Market, akin to the streamlined process for ACE Market companies moving to the Main Market? Currently, LEAP Market companies must withdraw their listing and provide shareholders with an exit offer or another equitable exit mechanism before transferring to the ACE Market. This process could be better aligned with the more flexible approach now offered to ACE companies moving to the Main Market.

Under existing SC guidelines, ACE companies that meet the Main Market’s profit test—i.e., an uninterrupted profit track record over 3–5 years, with a cumulative PAT of at least RM20mil and at least RM6mil in the latest financial year—can transfer automatically without delisting. From January 1, 2024, under the new accelerated transfer process, an ACE Market PLC with a daily market capitalization of at least RM1bil or the past six months can also seek to transfer to the Main Market.

Could a similar "green lane" be applied to LEAP companies seeking to graduate to the ACE Market?

For example, LEAP companies with an aggregate PAT of RM10mil over the last 3–5 years, and at least RM3mil in the most recent year (half of the Main Market's requirement), or market capitalisation or more than say RM500mil, could qualify for a fast-track transfer.

After all, the LEAP Market is intended to serve as a feeder to the ACE Market and ultimately the Main Market. Providing LEAP Market companies with this optional pathway would signal strong encouragement from the regulator, inspiring tomorrow’s champions toward elevation to the ACE Market.

A flexible and streamlined approach would strengthen Malaysia’s capital market by allowing high growth companies to scale efficiently.

This, in turn, would attract new capital, businesses, and investors—ultimately creating value for the economy and reinforcing Malaysia’s position as a leading regional capital markets hub.

Time for a Strategic Reset to Build Tomorrow’s Champions: Is It Time for More Regulatory Reforms? In its current form, the LEAP Market is not for everyone.

Restricted solely to sophisticated investors, the LEAP Market suffers from extremely low trading volumes.

With minimal buy or sell activity, there is little interest from investors, analysts, or traders. This lack of liquidity undermines price discovery and erodes public interest in LEAP-listed counters.

As a result, the LEAP Market is less attractive for SMEs seeking capital. The core benefits of listing — higher valuations, greater liquidity, and access to a broader investor base—are largely absent.

Simply put, being listed on the LEAP Market doesn’t feel like being part of a vibrant capital market.

To be fair, there are valid reasons for limiting access to sophisticated investors, mainly to protect the retail public.

However, the qualifying thresholds for sophisticated investor status may no longer be relevant in today’s context.

Inflation and evolving market dynamics have changed the financial landscape, and these outdated thresholds don’t necessarily reflect financial literacy or investment knowledge.

Today’s retail investors are markedly different from those of a decade ago. They have greater access to financial education, digital tools, and real-time market data. Many are now more informed, market savvy, and capable of making responsible investment decisions when provided with adequate disclosures.

This shift is evident in the surge of retail participation, particularly among younger, tech-enabled investors using digital investment platforms.

Given these developments, it is timely to reconsider broadening LEAP Market access to include retail investors—specifically, those who meet defined risk-profiling and acknowledgment standards.

This doesn’t mean opening the market to everyone, but rather enabling access in a structured, responsible way for those who understand and accept the investment risks.

Malaysia already has a foundation to build upon. Existing frameworks for equity crowdfunding (ECF) and peer-to-peer (P2P) financing include investor acknowledgments, caps, and suitability checks.

These principles could easily be adapted to govern retail participation in the LEAP Market.

My Final Thoughts Describing the LEAP Market’s eight-year journey as “rocky” would be an understatement.

Despite early missteps, regulatory gaps, and low investor participation, there are clear signs of promise and progress.

The introduction of the LEAP-to-ACE transfer framework in 2023 marked a pivotal milestone, breathing new life into the market. Together with the strong fundamentals of many LEAP-listed companies, this reinforces the platform’s relevance and potential impact.

The LEAP Market is a vital component of Malaysia’s capital market ecosystem. Its success is crucial for: 1. Bridging the Financing Gap for SMEs: Traditional funding avenues like bank loans often fall short for growth-stage SMEs. An active LEAP Market provides a more flexible alternative.

2. Building a Robust Pipeline for the ACE and Main Markets: A more effective LEAP Market ensures a steady flow of well-prepared companies to the larger boards.

3. Strengthening Malaysia’s Position as a Regional Hub: An agile and inclusive capital market enhances the country’s appeal to entrepreneurs and institutional investors alike.

While the LEAP Market has demonstrated significant potential as a platform for SME growth, after eight years, a strategic reset is needed.

With some minor yet critical adjustments—particularly to improve market access and trading liquidity—the LEAP Market could finally fulfill its original promise.

We are not far off.

With targeted reforms, enhanced support, and stronger investor engagement—combined with improved market access and liquidity for retail investors in LEAP-listed companies that have been listed for at least one year—the LEAP Market could become a vibrant, inclusive, and effective fundraising avenue for Malaysian SMEs.

Moreover, it could serve as a launchpad not only for Malaysian corporates but also for ASEAN companies.

As Malaysia prepares to host ASEAN’s Chairmanship in 2025, the timing is ideal for a strategic reset of the LEAP Market. Allowing retail investors to trade in LEAP-listed companies after one year— backed by audited financial statements—would be a crucial step forward, benefiting all capital market participants.

After all, the LEAP Market is envisioned as a feeder market to nurture tomorrow’s corporate champions.

Source: https://www.thestar.com.my/business/business-news/2025/05/20/the-leap-markets-eight-year-journey-milestones-challenges-and-the-road-ahead