SC issues details on shortening of “time-to-market”
Offer period cut to 5 days from 10, processing period cut to 8 days from 15

The Securities Commission (SC) today issued further details of the reduced time-to-market for Initial Public Offerings (IPOs) following the announcement by the Minister of Finance II YB Dato’ Dr Jamaludin Mohd Jarjis yesterday.

In line with the overall thrust towards a more facilitative fund-raising framework, the time-to-market for IPOs will be reduced to 13 market days from 25 market days effective 1 December 2003. Time-to-market refers to the period beginning from the date prospectuses for IPOs are issued until the day companies are listed.

The reduction is achieved partly by reducing the offer period to investors from a minimum of 10 market days to 5 market days. Companies retain the discretion to extend the offer period. In addition, offers would close at 5.00 p.m. instead of 8.00 p.m. presently. The rest of the reduction comes from the shortening of the various processes carried out by the participants to the IPO distribution. (See Appendix I).

Investors must also have a Central Depository System (CDS) account, from 1 December 2003 onwards, before they can apply for IPO shares. This new aspect substantially cuts down the processing time taken by the Issuing Houses as applicants’ details would already then be available. The SC has decided to implement the new time frame only from 1 December 2003 to give sufficient time for potential investors to open CDS accounts with their local Authorised Depository Agents.

Based on the new framework, companies seeking listing offering up to 20 million shares to the public (through the “white forms”) can list on the Kuala Lumpur Stock Exchange (KLSE) as early as 13 market days from the date when they issue their prospectus, although they can extend the period if they choose to do so.

“Apart from improving efficiencies in fund raising, this reduction of time-to-market puts the Malaysian stock market on a more competitive platform with the rest of the leading bourses in the region,” said SC Chairman Datuk Ali Abdul Kadir.

The SC had established an Industry Working Group (IWG) last year to look into enhancing the IPO distribution timeframe. The reduced time-to-market was arrived at after considering the roles of all participants in the IPO distribution framework including the Issuing Houses, Malaysian Central Depository (MCD) and KLSE.

“Everyone has worked very hard to review and enhance his organisation’s efficiencies and work processes to lessen the overall time-to-market. It took considerable time and effort, and cooperation and coordination. I would like to thank everyone for their hard work,” said Datuk Ali.

The IWG was led by the Association of Merchant Banks in Malaysia and comprised representatives from KLSE, MCD, Malaysian Issuing House Sdn Bhd, MIDF Consultancy and Corporate Services Sdn Bhd, Association of Stockbroking Companies Malaysia, Federation of Public Listed Companies and Association of Registrars.

“It was an interesting process, and I would also like to thank all the working group members who have looked at the well-being of the capital market, even as they worked on their own internal processes,” said Ms Pushpa Rajadurai who chaired the IWG.

“The market would certainly benefit from the reduction of the IPO distribution timeframe. It reduces the holding costs for investors and their exposure to the volatility of the KLCI, whilst for companies seeking listing, they would be able to reduce the underwriting costs incurred in their journey towards listing on the local bourse,” she said.

A list of questions and answers to facilitate understanding on the time-to-market is attached (Appendix II).

29 October 2003

Appendix I

Table 1 (Current IPO Time-to-Market)

(Market Days)

1.  Offer opens

2.  Offer closes at 8:00 p.m.
T + 10

3.  Basis meeting for Bumiputera & public categories of applicants
T + 13

4. Balloting ceremony for Bumiputera & public categories
T + 14

5. Announcement of subscription rate
T + 14

6. Mini Ballot
T + 17

7.  Deposit of shares into successful applicants CDS accounts
T + 19

8.  Submission of final prescribed list of information to the KLSE for  listing
T + 21

9. Despatch of “Notice of Allotment” to successful applicants
T + 21

10. Commencement of trading on a ‘ready’ basis on KLSE (i.e. Listing Day)
T + 25

Table 2 (New IPO Time-to-Market)

(Market Days)

1. Offer opens

2. Offer closes at 5.00 p.m.
T + 5

3. Basis meeting for Bumiputera & public categories of applicants
T + 7

4. Balloting for Bumiputera & public categories (no ceremonial event)
T + 7

5. Announcement of subscription rate
T + 7

6. Submission of final prescribed list of information to KLSE for listing
T + 10

7. Deposit of shares into successful applicants CDS accounts
T + 11

8. Despatch of “Notice of Allotment” to successful applicants
T + 12

9. Commencement of trading on a ‘ready’ basis (i.e. Listing Day)
T + 13

Appendix II

IPO Time-To-Market
Frequently-Asked Questions

1. Why is the current time-to-market relatively long?

  • Current time-to-market : 25 market days (from the day the prospectus is issued until listing date).
  • The long current time-to-market is attributed to the relatively long offer period (10 market days) and processes adopted by the Issuing Houses and MCD (for e.g. balloting processes).

2. What is the new proposed time-to-market?

  • New time-to-market : 13 market days (from the day the prospectus is issued until listing date).
  • The new time-to-market is shorter as the offering period is shorter (five market days) and the processes adopted by the Issuing Houses and MCD have been made more efficient (for e.g. no more mini ballots).

3. Where does the time savings come from?

  • The time saving is illustrated in the table below:-



Present Timeline (Market Days)

Proposed Timeline

(Market Days)

 Time Savings

(Market Days)


Offer period 1





Processing by the Issuing Houses and MCD and other preparatory work by the advisers





KLSE listing procedures









4. Is the 13 market days applicable to all IPOs?

  • The 13 market days time-to-market is applicable to IPOs with public offer sizes (i.e. “white form” shares) of up to 20 million shares.
  • Larger public offer sizes would attract the following time-to-market, which is shorter than the current time-to-market:-

Public Offer Size





20 million to 50 million shares



Above 50 million shares



5. Why does an offer to the public exceeding 20 million shares attract different time-to-market?

  • The maximum number of applications that the Issuing Houses can realistically process within 6 market days would be based on public offer of 20 million shares, given their resources as well as the physical form of applications (which can only be processed manually). Owing to these constraints, they would need additional time to process applications if the public offer size exceeds 20 million shares.

6. The new time-to-market is still longer than those in Singapore and Hong Kong. Why?

  • Hong Kong: 10 Market days Singapore: 7 markets days
  • Applications for IPO shares in Malaysia are mostly in physical form as opposed to electronic [i.e. electronic share application (ESA)]. As a result, the processing of applications is still manual-based whereupon the Issuing Houses would need to check and verify manually the individual details of successful applicants before proceeding further.
  • Thus, the longer time-to-market in Malaysia compared to Hong Kong and Singapore where the applications through the ESA are high (90% compared to 20% in Malaysia).

7. When does the new time-to-market take effect?

  • The new time-to-market takes effect on 1 December 2003 and applies to companies issuing prospectuses on or after 1 December 2003.
  • To facilitate the new time-to-market, investors would be required to have CDS account upfront before applying for IPOs. This requirement would take effect on 1 December 2003.

8. What are the benefits of the reduced time-to-market?

  • Minimise the holdings cost of investors.
  • Minimise the exposure of the volatility of the KLSE Composite Index to investors.
  • Minimise the underwriting exposure of underwriters.

9. Will the rest of the participants to the IPO distribution such as the Issuing Houses and KLSE shorten their time to carry out their work?

  • Yes, they will. In fact, they have reviewed their work processes to lessen the overall time-to-market. For instance, the Issuing Houses will reduce their processing time from 12 to 6 market days whilst KLSE will reduce theirs from 3 to 2 market days.

10. Where can a list containing the names and addresses of Authorised Depository Agents (ADAs) be found?

  • The list can be found in IPO prospectuses.

1 Refers to the minimum period for which the offer must be kept open. It is at the discretion of the companies seeking listing to extend the offer period if they wish to do so.