The stockbroking firms have been given two weeks to respond to the SC's show cause letters. Alor Setar Securities is allowed to continue to conduct its business under the trading restrictions imposed by the Kuala Lumpur Stock Exchange (KLSE). Omega Securities ceased all trading activities with effect from today. The SC had decided to not grant written consent to Omega Securities to carry on its licensed business activity, as required under Section 20A of the Securities Industry Act, 1983 (SIA).

On 15 April 1998, KLSE, upon a directive from the SC, had informed the two stockbroking firms that an agreement in principle must be reached for a restructuring exercise in the form of a merger or acquisition within a two-week period, ending 30 April 1998. None of the companies had submitted such an agreement in principle on expiry date.

Omega Securities and Alor Setar Securities were put under trading restrictions because they were not able to fulfil prudential capital standards and business conduct standards of the securities laws and KLSE Rules.

In all decision made by the SC, investor protection and management of systemic risk are given the utmost priority. The SC has also instructed KLSE to be on hand to address any concerns clients of the abovementioned firms may have.