Earlier today I announced a number of reforms for the nation that addresses the current economic conditions regionally and globally, while we continue to pursue our national mission objectives. Below is a summary of the announcement prepared by my office, which I would like to share with you.
HIGHLIGHTS OF REFORMS
Announced by YAB Prime Minister
Dato’ Sri Najib Tun Razak
At Invest Malaysia 09
June 30, 2009
1. FIC Deregulation
Deregulation of FIC guidelines encompasses:
i. Acquisition of equity stakes, mergers and takeovers;
• With immediate effect, FIC guidelines covering the acquisition of equity stakes, mergers and takeovers is repealed.
• FIC will no longer process share transactions nor impose equity conditions on such transactions
• FIC will also no longer process property transactions, except where it involves dilution of Bumiputera or Government interests
• Equity conditions for investments if any will continue to be imposed by the relevant sector regulators
• Listed companies will no longer be subject to equity conditions post-IPO. Upon IPO, the equity condition will be subsumed as part of the public spread requirement
ii. Treatment of fund raising by listed companies;
• Currently, companies going for IPO will need to meet both SC’s public spread requirement (25%); and FIC’s Bumiputera equity requirement (30%)
• Going forward
o FIC requirement is removed
o SC, as sector regulator will continue to impose public spread requirement
o SC will now impose a Bumiputera equity requirement as part of public spread requirement (specifically 50% of public spread to be offered to Bumiputera)
o There will no longer be any equity condition imposed post IPO except in the case of RTO and backdoor listing
iii. Acquisition of properties
• Going forward, FIC will only process transactions involving dilution of Bumiputera interests (i.e. sale of property by Bumiputera to non-Bumiputera) and Government interests in property. Even then, FIC approval is only required for properties above RM20 million, whether bought directly or indirectly
• All other transactions will no longer require the approval of FIC
• The threshold for purchase of properties by foreigners is increased in general to RM500,000.
• Above the threshold, foreigners will no longer need to refer to FIC for the purchase of properties
• State governments however, maintain the right to impose additional conditions
• This measure significantly enhances the transparency and reduces regulatory uncertainty involved in property transactions
2. Fund Management Liberalisation
• Ownership in the wholesale segment of the fund management industry fully liberalised to allow 100% ownership for qualified and leading fund management companies to establish operations in Malaysia.
• For the retail segment, the foreign shareholding limits for the unit trust management companies raised to 70% from current level of 49%.
3. Stock Broking Liberalisation
• Foreign ownership shareholding limits in existing stock broking companies be increased to 70% from its current level of 49%
4. VISA Application
• BNM and SC will review all visa applications for the financial services industry and capital market respectively.
5. Establishing New Institution
• Ekuiti Nasional Berhad (Ekuinas) to be established with initial capital of RM500 million, eventually to be enlarged to RM10 billion fund.
• Ekuinas will focus its investments in high growth sectors, in line with supporting the New Economic Model
• Ekuinas will jointly invest with private sector, reflecting a genuine partnership and through a fully commercial approach will ensure meritocracy of participating Bumiputeras
• Ekuinas will complement the other existing funds.