Stock market, investors set to benefit from new IPO timeframe

  • Business
  • Wednesday, 12 May 2004

SECURITIES Commission (SC) regulatory approval cycles were shortened last year across all major areas, including “time-to-market” for corporate proposals, licensing and product introduction. 

In line with the overall thrust towards a more effective fund-raising framework, time-to-market for initial public offers (IPOs) was reduced to 13 market days from 25, effective Dec 1 last year. 

Besides improving fund-raising, the shorter time-to-market places the Malaysian stock market on a more competitive footing with other regional bourses. Market participants have indicated that the market would benefit from the shortening of the IPO distribution timeframe.  

For investors, it reduces holding costs and exposure to the volatility of the Kuala Lumpur Composite Index; and for companies seeking listing, underwriting costs.  

Moreover, an organisation transformation programme (OTP) was established to assess and rethink the SC's workings at all times.  

Following the efforts from 2002, the OTP progressed last year to improve policy-making processes, including project-based management, regulatory impact assessment methodology, and to adopt the “lab” brainstorming approach. 

In enforcement efforts, cases are now typically brought to court within six to 12 months of the opening of an investigation paper, compared with over a year previously. Last year, the SC charged 11 people and secured convictions of nine, of whom eight were fined and one jailed.  

In conducting financial reporting and corporate surveillance, the SC opened 70 cases for investigation last year and closed 28 cases. 

Where the SC detected breaches of the Companies Act 1965 (CA) or the Penal Code, cases were referred to the Companies Commission of Malaysia and the Royal Malaysian Police for further action.  

To encourage persons intimate with the company to expose cases of wrongdoing, the SC and fellow regulators have been working to include whistle-blowing provisions in the law.  

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