2 November 2006


SC releases licensing indicators in Q3 performance data – shows improved performance in corporate proposal processing


The Securities Commission (SC) approved 97 per cent of all licensing applications received in the third quarter within the stipulated time line. [Tables 6 and 7] Improvements were also registered in the processing of corporate proposals with 85 per cent completed within time during the July-September period. [Table 4]


For the first time, the SC also released performance indicators for the processing of licensing applications. This additional disclosure by the SC supplements the detailed performance data on corporate proposals that the regulator releases periodically.


“We have widened the set of performance indicators to cover licensing data. This demonstrates our commitment to be transparent and, equally important, to be accountable in meeting the standards expected of us in all areas of our work,” said the SC Chairman, Dato’ Zarinah Anwar.


According to the SC licensing time charter, new applications and renewals of representative licences are to be processed within 14 days; while new applications and renewals of company licences are subject to a 42 day and 21 day time lines respectively.


All licensing applications, except new applications for company licences and renewal and new applications for individual investment adviser licences, were made through the Electronic Licensing Application system (ELA) and processed against ISO-certified performance standards. The SC implemented the ELA straight-through processing system in 2005 to further improve service delivery. ELA continues to undergo enhancements to ensure greater efficiency in the licensing process.


“Reducing time-to-market is a priority for the SC and we will continue to close any gaps identified, as part of our commitment to provide market participants with quality services and in response to growing market needs.


“Moving forward, we will continuously enhance our licensing processes to improve assessment times without compromising on the quality of market participants allowed into the industry,” said Dato’ Zarinah.


“We have reviewed our processes and have significantly cut the assessment time from 14 to three days for recommendations to be made to the Immigration Department for the issuance of capital market work permits. This would encourage the transfer of foreign skills to the capital market,” she added.


The general time charter for corporate submissions is three months under the assessment approach, and 21 and 14 working days for equity and private debt securities (PDS) applications respectively, under the declaratory approach.


In August, the SC committed itself to a one month time line, down from the usual three months, for initial public offering (IPO) applications of companies with market capitalisation of at least RM500 million. It also reduced the processing time frame for stand-alone rights issue proposals to five working days.


There were a total of 137 corporate submissions that were at-hand for the SC in the third quarter. Eighty-five of these submissions came in within the third quarter, and another 52 carried over from the first six months of the year. Ninety-five of the applications at-hand in the third quarter was disposed off, of which 93 per cent were considered with the balance withdrawn or returned. [Tables 1 and 2]


In fulfilling its commitment, the SC in the third quarter also posted reasons for the rejection of corporate proposals on its website, which will be updated periodically. This was aimed at improving transparency on the SC’s decision making and to serve as a guide for future applicants and their advisers.


“We continue to engage closely with applicants and their advisers at the pre-submission and post-decision stages to ensure quality applications,” said Dato’ Zarinah.


Capital market statistics released by the SC cover information on processing, approvals and rejections of submissions, including timing and reasons. In addition to these scorecard indicators, the periodic quarterly statistics of submissions approved by the SC for the third quarter of 2006 were also reported.


The full series of capital market statistics released by the SC today is set out below.



CAPITAL MARKET STATISTICS


SC Scorecard Q3 2006
&
Statistics of Submissions Approved by SC in Q3 2006


A. Corporate Submissions to the SC – Q3 2006






Table 1: Status of Submissions as at 30 September 2006













































































































































Total


Submissions brought forward from Q2 2006


52


Submissions received in Q3 2006


85


Total submissions 1


137


Less submissions considered in Q3 2006


(79)


Less appeal cases considered in Q3 2006


(9)


Less submissions withdrawn/returned in Q3 2006


(7)


Submissions pending consideration as at 30 September 2006


42

1 Excludes other applications such as extension of time, appeal against conditions, waiver, etc
 

Table 2: Submissions Considered/Withdrawn/Returned in Q3 2006




























































Type of Proposals


Approved


Rejected1


Deferred


Withdrawn/
Returned


Total

Initial public offering

5

9 2

1

3

18

Restructuring

4 3

4

Acquisition

3

3

Capital raising 4

18

3

1

22

Private debt securities

27

1

28

Others 5

17

1

2

20

Total

70

16

2

7

95


















1 In all rejection cases, reasons for rejection were clearly communicated to applicants and advisers through formal decision letters followed up by post-decision meetings with SC.
2 Includes 7 appeal cases and among the main reasons were concerns on corporate governance of promoters and directors, and failure of applicants to demonstrate future sustainability of business.
3 Includes 2 appeal cases and the main reason was submissions not comprehensive enough to address distressed financial position of ailing listed companies.
4 Includes equity issues, private placements and restricted issues.
5 Includes transfers to Main Board, disposals of assets, share splits and corporate exercises by unlisted companies.
 

Table 3: Average Processing Time for Submissions Considered in Q3 2006








































Submissions

Submissions considered/withdrawn/returned

Average time from submission to decision1


Received in Q3 2006

   


Assessment approach


19


2.9 months



Declaratory approach


60


17 days


Sub-total


79

 


Appeal cases


9

 


Withdrawn/returned


7

 
     

Total


95

 
1 From the date of receipt of complete submission to date of decision letter.
 

Table 4: Processing Turnaround Time for Submissions Considered in Q3 2006
























Submissions considered in Q3 20061


Within time charter2


Exceed time charter3

Total


Assessment approach


15


4


19



Declaratory approach


52


8


60


Total


67


12


79












1 Excludes appeal cases.
2 SC time charter is 3 months for submissions under the assessment approach and 21 and 14 working days for equity and private debt securities respectively under the declaratory approach, computed from date of receipt of complete submission to date of decision letter. In the case of large capitalisation IPO and stand-alone rights proposal, the time charter is one month and 5 working days respectively.
3 Main reasons being applicants and advisers’ delayed replies to SC queries and matters requiring further investigation.
 

Table 5: Submissions Pending Consideration as at 30 September 2006
























Submissions


Within time charter1


Exceeds time charter2


Total


Assessment approach


23


1


24


Declaratory approach


13


5


18


Total


36


6


42









1 SC time charter is 3 months for submissions under the assessment approach and 21 and 14 working days for equity and private debt securities respectively under the declaratory approach, computed from date of receipt of complete submission to date of decision letter. In the case of large capitalisation IPO and stand-alone rights proposal, the time charter is one month and 5 working days respectively.
2 Includes 2 submissions held back pending policy matters, 2 subject to on-going investigation, 1 requires appointment of external party for verification purposes and 1 subsequently returned.
 

B. Licensing Submissions to the SC — Q3 2006


Table 6: Status of Licensing Applications Received in Q3 2006












































































Type of license application


Received


Withdrawn


Returned


Considered


Approved


Rejected


Pending


Representative










New


270


21


101


148


145


0


3



Renewal


2116


12


124


1980


1979


0


1


Company










New


8


0


0


8


1


0


7



Renewal


129


18


40


71


65


0


6


Total


2523


51


265


2207


2190


0


17

 

Table 7: Processing Turnaround Time for Licensing Applications Considered in Q3 20061




































Type of license application

Within time charter Exceeds time charter 2

Representative





New


 101


44



Renewal


1964


15


Company





New


1


0



Renewal


50


15


Total


2116


74









1 SC time charter is 14 days for new applications and renewals of representative licences; 42 days for new applications of company licences; and 21 days for renewals of company licences.
2 ELA continually undergoes enhancements; the SC recognises and will continue to close gaps as part of its commitment to ensure greater efficiency in the licensing process.
 

C. Statistics of Submissions Approved by SC – Q3 2006


i) Corporate Proposals


Table 8: Number of Corporate Proposals Approved





















































Type

Number of Corporate Proposals Approved

Q3 2006 Q2 2006 Q1 – Q3 2006 Q1 – Q3 2005

New listings


5


3


23


61


Capital-raising exercises 1


45


39


119


147


Acquisitions


3


6


16


15


Restructuring 2





6


Share splits


3



3


10


Others 3


14


24


51


31


Total


70


72


212


270












1 Includes equity issues, private placements, restricted issues, issues of debt securities and convertible loan stocks.
2 Includes debt restructurings.
3 Includes transfers to Main Board, disposals of assets and corporate exercises by unlisted companies.
 

ii) Private Debt Securities


Table 9: Approved RM-denominated PDS Issues









































Q3 2006


Q2 2006


Q3 2005


No. of issues


Size of issues (RM’mil)


No. issues


Size of issues (RM’mil)

No. issues Size of issues (RM’mil)

Conventional


16 1


8,303.000


15 2


10,600.500


15 3


5,132.42


Islamic


16


12,385.000


16


4,376.874


27 4


14,699.00

Total

32


20,688.000


31


14,977.374


42


19,831.416

1 Include three ABS issue amounting to RM1.47 billion.
2 Include two ABS issue amounting to RM1.5 billion.
3 Include one ABS issue amounting to RM175.0 million.
4 Include one ABS issue amounting to RM2.5 billion.


Table 10: Foreign Currency-denominated PDS Issues by Foreign Corporations







































 

Q3 2006


Q2 2006


Q3 2005


No. of offers


Size of offers (‘mil)


No. of offers


Size of offers (‘mil)


No. of issues


Size of offers (‘mil)


Conventional






1


GBP20,000.00


Islamic


2


USD100.001


1


USD200.00



Total

2


USD100.00


1


USD200.00


1


GBP20,000.00

1 Include one offer which has yet to finalise the offer size at the point of approval.
 

Table 11: Foreign Currency-denominated PDS Issues by Malaysian Issuers







































 

Q3 2006


Q2 2006


Q3 2005


No. of issues


Size of issues (USD’mil)


No. of issues


Size of issues (USD’mil)


No. of issues


Size of issues (USD’mil)


Conventional




1


400.00




Islamic






1


500.00

Total



1


400.00


1


500.00

 

Table 12: Approved PDS Issues by Cagamas Berhad







































 

Q3 2006


Q2 2006


Q3 2005


No. of issues


Size of issues (RM’mil)


No. of issues


Size of issues (RM’mil)


No. of issues


Size of issues (RM’mil)


Conventional


2


550.00


6


2,395.00




Islamic


3


1,000.00


2


300.00



Total

5


1,550.00


8


2,695.00



 

Table 13: Number and Size of Approved Programme Issuance of Structured Products







































 

Q3 2006


Q2 2006


Q3 2005


No. of issues


Size of issues (RM’mil)


No. of issues


Size of issues (RM’mil)


No. of issues


Size of issues (RM’mil)


Conventional


1


10,000.00




8


18,000.00


Islamic


1


1,000.00


1


1,800.00



Total

2


11,000.00


1


1,800.00


8


18,000.00

 

iii) Take-overs & Mergers


Table 14: Number of Approved Submissions Relating to the Malaysian Code on Take-overs and Mergers






























Type

Number of Submissions Approved


Q3 2006


Q2 2006


Q3 2005


Clearance of offer document


4


6


6


Application for waiver from mandatory offer obligation


16


16


11


Other


34


48


32

Total

54


70


49

 

iv) Unit Trusts and Other Collective Investment Schemes


Table 15: Number of Submissions Relating to Unit Trust and Other Collective Investment Schemes Approved










































Type


Number of Submissions Approved


Q3
2006


Q2
2006


Q1 – Q3
2006


Q1-Q3
2005


Establishment of new funds


33


20


70


44


Change in fund size


10


21


45


37


Exemption/variation from Guidelines 1


5


3


11


10


Other applications 2


33


33


93


94


Total


81


77


219


185









1 Excluding applications submitted through the establishment of new schemes.
2 Including applications for extension of time, change of trustee, change in shareholding structure, revaluation of property, investment in foreign market and application to act as E-Host and provide online activities.
 


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