The objective of the EGM was to pass two resolutions both of which relate to the demutualisation of the exchange. These include:-
- Special Resolution 1: The proposed conversion of Kuala Lumpur Stock Exchange, and
- Special Resolution 2: The proposed adoption of the amended Memorandum & Articles of Association of KLSE.
Executive Chairman of KLSE, Dato' Mohd Azlan Hashim said the passing of the resolutions will enable all parties to continue working towards the successful completion of demutualisation.
"As we continue working together in completing the various stages in the demutualisation of the exchange, we are all aware of the multiple benefits this effort will achieve for the government, economy, capital market, the exchange issuers, investors and last but not least members and remisiers."Specific to stockbroking members and remisiers, they will derive financial benefits, greater focus on core business and expanded business opportunities with the completion of demutualisation," he said.
Mohd Azlan said key to the proposed conversion of KLSE is the approval of the share capital of the demutualised exchange proposed as follows:-
- Authorised Share Capital of 1 billion ordinary shares of par value 50 sen each - worth a total RM 500 million, and
- Issued and Paid-Up Share Capital of 500 million ordinary shares of par value 50 sen each - worth a total RM250 million.
"The KLSE Committee in approving the recommendation of the proposed share capital to stockbroking members, amongst others, considered balancing the current earnings of KLSE Group with its net asset base, optimising the proposed share capital in preparation for the potential listing of KLSE and to cater for future share capital increase, if required.
"Of course, the plan for listing the exchange will be considered very carefully once KLSE is demutualised, taking into account market conditions and the ability to capitalise on timing to generate optimal return on equity," Mohd Azlan said.
The process of demutualisation commenced following a thorough review and evaluation to demutualise KLSE by the KLSE Committee. The KLSE Committee endorsed the proposed demutualisation of the Exchange on 28 May 2002 and unanimously recommended the proposed demutualisation to stockbroking members.
Subsequently, on 21 November 2002, the Securities Commission announced that the government had given approval for the Exchange to proceed with demutualisation.
More recently, on 11 September 2003, the Dewan Rakyat passed the demutualisation bill together with various amendments to current securities laws. Dewan Negara passed the same on 5 November 2003.
With the passing of key resolutions by stockbroking members of KLSE at the EGM today, submissions will be made to the Companies Commission for the conversion of KLSE. The Demutualisation Bill and amendments to existing securities laws will require Royal Assent and Ministerial gazette. The demutualisation of KLSE is targeted to be completed by first quarter 2004.
Commenting on the completion of significant milestones in the process to demutualise KLSE, Mohd Azlan said the objective is to create greater opportunities in the securities industry and the capital market."Collectively there is still a lot more to be done in meeting the strategic objectives of demutualisation, in boosting velocity and liquidity of the market, enhancing products and services, and achieving greater efficiency and scale.
"As a team, we will not have proceeded this far without the understanding, co-operation and support of everyone in the market and industry, including the Securities Commission and the Ministry of Finance.
"Moving forward, we need even more of such commitment and dedication to demutualise KLSE for the benefit of market and industry." Mohd Azlan said.