Following a policy directive to restrict corporate exercises announced by the Government on 5 December 1997, the SC had issued a set of guidelines enumerating the criteria under which applications for listings, capital-raising exercises and restructuring schemes would be considered. The detailed guidelines were issued to the merchant banks on 21 January 1998.

Subsequently, the SC decided to fine-tune the guidelines to make the criteria more flexible. The revisions to the guidelines became effective from May 1998.

With the lifting of the said restrictions, the SC's consideration of applications for corporate proposals will revert to the position prior to their imposition. It is hoped that the return to status quo ante will provide companies with the needed avenue to raise funds to support their core businesses.

It is to be emphasized, however, that the qualitative and quantitative requirements of all proposals will have to be fully adhered to. In this regard, the SC will continue to exercise close scrutiny over corporate proposals. For capital-raising exercises, firm commitments from the major shareholders and underwriters will be required. For listing applications for the Second Board in sectors where there are already a significant number of listed companies, such as construction, manufacture of building materials, garments and textiles operations and production of automotive components supporting the OEM (original equipment manufacturer) markets, the SC would encourage consolidation and only proposals for mergers and acquisitions will be considered. All corporate proposals must benefit the listed companies as well as the minority shareholders and new investors. Valuations together with the terms and conditions of the transactions must stand up to public scrutiny. Directors and advisers are therefore required to discharge their duties responsibly to serve the best interests of the listed companies.

From 5 December 1997, the date when the policy restricting corporate exercises was announced, until 30 June 1998, the SC had approved a total of 66 applications comprising 6 initial public offerings, 36 Employees' Share Option Schemes and 24 various other corporate exercises. To keep the market updated on the number of corporate proposals considered, the SC will be releasing statistics on proposals approved on a quarterly basis.