THE Securities Commission (SC) will reduce the time-to-market for initial public offerings (IPOs) – the duration between the time the prospectus is issued until the company is listed – from 25 market days currently to 13 market days starting Dec 1.
IPO applicants must have CDS accounts when applying for the shares to facilitate the reduction in time, said Second Finance Minister Datuk Dr Jamaludin Jarjis.
Announcing this yesterday at the Malaysia Capital Market Summit 2003 in Kuala Lumpur, Jamaludin said the move would make the IPO distribution framework in Malaysia more efficient, and it was in response to a proposal by various market participants, including merchant banks and issuing houses.
The SC will announce further details on the reduced time-to-market measure soon.
In his speech, Jamaludin said Malaysia has 3 million CDS accounts compared with a population of 22 million.
Speaking later on another proposal currently being mooted, SC chairman Datuk Ali Abdul Kadir said the plan to attract foreign funds into the country by matching foreign funds raised with an equivalent amount provided by government linked institutions was still under consideration.
“We are still pursuing the matter. We are hoping to get all parties to agree to it and that it will be implemented within a relatively short time. It's not easy to get a few billion (ringgit) of funds just like that.”
Asked whether a minimum amount had been set, Ali replied: “We have to look at a fairly reasonable amount of funds for them to bring in before they'll be allowed to operate here and be given the same equivalent of funds to manage.''
“That still has to be worked out, but I don't expect it will be anything less than half a billion ringgit; otherwise, it won't be worthwhile taking so much time to do it,” he said.
Ali added that the relevant authorities would also want to evaluate the funds before they were allowed to participate under this proposal, stressing that Malaysia was not interested in “tiddly wink funds.”
According to him, feedback on the proposal has been generally positive, with market, investors and intermediaries, welcoming it.
Going forward, he said, the SC would work at sorting out its regulations, consult with the market players that would be affected by such a move, such as the local fund managers, and consult with Malaysian funds that could be persuaded to let their money be managed by foreign fund managers.
On how soon the proposal, first highlighted in the media in June, would be implemented, Ali said: “Anything that happens within this year will be very good going.”