Kuala Lumpur, 20 March 2007

Immediate approval for 60% of MGO exemption applications

More than 60% of applications for exemptions from having to undertake mandatory offers will now be approved within one working day. The Securities Commission (SC) said this comes into effect immediately. Previously, such approvals took 21 working days.

This speedier approval timeframe will apply to applications for exemption from having to undertake mandatory offers in the following circumstances:

(i) the issuance of new securities for, amongst others, purchase of assets or subscription of new shares for cash;

(ii) where the person intends to compulsorily acquire the remaining shares of a company; or

(iii) when the company purchases its own voting shares.

In addition, the SC has enhanced the requirement for announcements of potential take-overs and mergers. Immediate announcement is now required in the following instances:

(i) where a company is the subject of a rumour or speculation of being taken over; or

(ii) where there is untoward movement in share price or significant volume build-up due to a potential M&A exercise or the company is the subject of a take-over offer.

These new requirements will provide clarity in terms of the need to make announcements to the market and will ensure that information is disseminated in a timely manner to all stakeholders and promote market efficiency.

These measures are in response to the growth and continued sophistication of the Malaysian capital market which is best served by minimising regulatory friction to enable market intermediaries to respond quickly to changing market demands.

The full details of the SC’s clarification note on these latest measures are available here.