A person who engages in such applications commits an offence under Section 87A of the Securities Industry Act 1983 (SIA) and if convicted may be punished with a minimum fine of one million ringgit and to a jail term of up to 10 years under Section 88B SIA.
The following situations may be regarded as applications which contravene the law:
- A person who makes numerous applications using the names of others, with their consent;
- A person who makes numerous applications using the names of others, without their consent; and
- A person who makes numerous applications under situations 1) or 2) and at the same time, rigs the balloting process with the assistance of personnel in the issuing house.
The SC, together with the exchanges, issuing houses and the central depository, is currently fine-tuning mechanisms to further improve aspects relating to the deterrence and detection of incidences of multiple share applications.
Investors should also know that the issuing house automatically rejects applications once it detects more than one submission by the same individual. Therefore, making multiple share applications would not, in effect, enhance the success rate of an individual's application.
The extent of the abuse relating to such practice has, at present, not reached a level that can be construed as adversely affecting the fair and orderly conduct of the share balloting process implemented at the issuing houses. However, the SC will not hesitate to apply the full force of the law against persons caught engaging in multiple share applications so as to preserve the integrity of the share balloting process.
