1. Allocation to Directors and Employees
SC's Guidelines allow all applicant companies, as part of its flotation scheme, to provide an allocation of shares to the directors and employees of the company and its immediate holding company so long as the total allocation does not exceed 5% of its enlarged share capital. Each eligible director and employee shall be allocated with at least 500 but not more than 10,000 shares so as to achieve an average allocation of not more than 3,000 shares per person. Any shares which are not subscribed by any director or employee shall be offered to the public.
The board of directors of the applicant company decides the basis and criteria of eligibility for allocation, but basic eligibility criteria stipulated in the Guidelines would need to be observed. They are as follows:-

i. All executive and non-executive directors (other than those representing the Government or its agencies and who are serving in the public service) are eligible for the allocation;

ii. All employees who are at least 18 years of age, confirmed in service and having served the applicant company for at least three (3) months before the cut-off date for allocation are eligible for the allocation;

iii. Foreign employees are also eligible for the allocation of shares subject to the fulfilment of certain serving period (i.e. such employees having served at least two (2) years and expected to remain for at least one more year) with the company.

Allocation may also be made to persons who have contributed to the applicant company's success (such as suppliers, distributors, dealers or customers) throughout a period of at least three (3) years.

Once the allocation proposal is approved, the applicant companies will proceed to notify their employees and directors of their respective entitlements, commonly known as "pink form" entitlements.

2. Allocation to Bumiputera Institutions & Investors
Allocation of shares to Bumiputera institutions and investors, including the recognition of Bumiputera investors for the purpose of meeting the 30% Bumiputera equity requirement, comes under the purview of the Ministry of International Trade and Industry (MITI), and Ministry of Finance (MOF) for finance-based and privatised Government companies. The SC is not involved in determining the allocation of shares to Bumiputera institutions and investors.

3. Allotment to Bumiputera Public
The role of SC in this regard is to ensure that the flotation scheme provides for a sufficient number of shares for the public offer in order to enable the company to meet the required shareholding spread requirements specified by the Guidelines. At least 30% of the shares so offered must be set aside for the Bumiputera public investors. Selection of successful applicants is handled by the issuing house and the applicant company by way of public ballot.

In conclusion, the SC wishes to state that its authority over the issue of securities by public companies should not be confused with the actual allocation of those securities which is made by the issuing companies themselves based on certain criteria contained in the Guidelines which the SC administers. At no time does the SC have in its possession securities or shares to be allocated to members of the public.