A management company has obtained the approval from SC for the listing of up to 300 million units of an ETF. However, the management company intends to issue and list only 160 million ETF units at the initial listing stage. What is the total number of ETF units that the management company must apply for listing in the Initial Listing Application that is submitted to Bursa Securities for approval, pursuant to paragraph 9.0 of Practice Note 23?
The management company must apply for listing of the maximum number of ETF units as approved by SC i.e. 300 million ETF units ("Approved Fund Size"), even though the number of ETF units to be issued upon listing is only 160 million units. The management company must also apply for quotation of the same quantum of ETF units i.e. up to 300 million units in its application for quotation. In view of the nature of an ETF with the in-kind creation and redemption feature, the number of ETF units issued and listed may increase and decrease from time to time, depending on the demand and supply of the ETF units traded on Bursa Securities. Thus, in order to facilitate and expedite the in-kind creation and redemption of ETF units, no additional application for listing and quotation will be required by the management company as long as it is within the Approved Fund Size.