The Securities Commission (SC) today announced measures to further enhance the rights issue framework in Malaysia. Greater disclosure of allotment of excess rights shares in the abridged prospectus is now required. The SC also shortened the registration time frame for abridged prospectuses from seven to one market day.
Under the current industry practice, the basis of allotment of excess rights shares is only determined after the last acceptance date of the rights issue and is not made known to the shareholders. As a result of the SC’s latest enhancement to the rights issue framework, the indicative basis of allotment for excess rights shares is to be disclosed upfront in the abridged prospectus.
The enhanced disclosure requirements for allotment of excess rights shares in the abridged prospectus are aimed at improving transparency and awareness to shareholders and investors before they apply for the excess shares.
The SC will closely monitor industry’s compliance with the enhanced disclosure requirements in abridged prospectuses as well as the fair and equitable allotment of excess rights shares. This is expected to augur well for the interests of all shareholders and the market as a whole.
The SC has amended the Prospectus Guidelines-Abridged Prospectus (AP Guidelines) to implement these changes, which will take effect on 15 January 2007.
These latest amendments to the AP Guidelines are part of the SC’s ongoing efforts to enhance the rights issue framework. Earlier, on 25 August 2006, the SC reduced the approval timeframe for stand-alone rights issue proposals by listed companies from 21 to five working days.
This enhancement to the rights issue framework supports the SC’s endeavours to continuously improve the efficiency, effectiveness and transparency of the fund raising process.