SEC to hold hearing on shareholding rejig rules
The Securities and Exchange Commission (SEC) is conducting a public hearing to amend regulations aimed at reducing impediments to shareholders’ restructuring to support mergers and acquisitions.
The regulator is offering an option to sell shares held in a listed company or its subsidiary, with a mechanism to protect shareholders’ rights still in place.
In case of an investment made in shares of a listed company, filing of a registration statement and draft prospectus will be excluded.
In case of an investment made in shares of a limited company, such share subscription can be offered to more than 50 investors and the offeror must provide protection mechanisms.
These mechanisms comprise of providing adequate information for decision-making, such as shareholders’ restructuring and the impact of mergers and acquisitions in a notification letter at the shareholders’ meeting; offering a fair value for share subscription with a financial adviser’s approval; having an independent securities firm to advise and assess the investment criteria for share subscribers; and distributing the same stock information for at least 14 days before the share subscription date, whereby such information should be similar to that offered to investors with the right for early share subscription.
The SEC will also allow listed firms to issue transferable subscription rights to existing shareholders based on shareholding proportion.