Singapore Exchange Ltd Recognises Effective Capital's Proposal

The Kuala Lumpur Stock Exchange (KLSE) met with Singapore Exchange Ltd (SGX) on January 31 in Kuala Lumpur to discuss the Central Limit Order Book International (CLOB) issue. During the meeting, SGX conveyed its position to KLSE on the following matters related to CLOB:- SGX conveyed to KLSE that it recognises the Effective Capital Sdn Bhd (ECSB) Irrevocable Request & Authority Proposal (IRA) as part of a comprehensive and expeditious solution to the CLOB issue. SGX noted KLSE's concern on the delay in the distribution of private sector offers which have complied with KLSE's rules and procedures to CLOB investors. The delay was due to SGX's concern over too many proposals put forward that would confuse CLOB investors. SGX has indicated that the distribution of ECSB's IRA documents to CLOB investors will be carried out as soon as possible next week. SGX expressed concerns on ECSB's offer as follows: whether ECSB's IRA proposal can be implemented if accepted by the CLOB investors status of CLOB investors who decline to accept ECSB's proposal KLSE reiterated that ECSB's IRA proposal has been perused by KLSE and Malaysian Central Depository Sdn Bhd (MCD) and is found to comply with the relevant rules and procedures. ECSB's IRA proposal can therefore be implemented if accepted by the CLOB investors. KLSE is also of the view that CLOB investors who do not wish to accept ECSB's proposal would have fully recognised that, upon the expiry of CDP's authorised nominee status on 30 June 2000, any securities not held in the account of a beneficial owner or an authorised nominee shall be transferred to the Minister of Finance. KLSE also emphasised that its role is to ensure that proposals to be implemented fully meet the rules and procedures of KLSE and MCD. SGX should meet with ECSB to discuss any commercial aspects of the proposal. SGX also expressed agreement with the KLSE that any resolution to the CLOB issue must not cause disruption to the Malaysian stockmarket.