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01 September 2009
On May 29 2009 the Capital Markets and Financial Institutions Supervisory Agency continued its efforts to improve the efficiency and effectiveness of public offering procedures by issuing the Regulation on Registration Rules and Procedures in the Framework of Public Offerings (IXA2) and the Regulation on Securities Transaction Reporting Rules and Procedures (XM3).
Regulation IXA2 introduces a number of new provisions and procedures to expedite the public offering process. It provides issuers with mechanisms for (i) discontinuing an offering because of unfavourable market conditions, and (ii) suspending a public offering upon the occurrence of an event listed in the regulation (eg, a natural disaster or a 10% fall in the stock exchange index for three consecutive days).
The regulation introduces a new provision that allows the agency to issue a statement permitting an issuer to conduct book building and announce an abridged prospectus, an ordinary prospectus or a preliminary prospectus for book-building purposes. The requirement to obtain agency approval may have been introduced to counter the practice of some underwriters of conducting book building long before the agency has declared the registration to be effective.
The regulation also allows issuers to ask the agency to issue an accelerated effective registration statement. The issuer is required to confirm to the agency that it has and will have no additional information, and that it has provided the required information on interest rates and the number and price of the securities to be offered.
Issuers of municipal or regional government bonds must submit their financial reports no later than nine months from the date of the agency's statement of effective registration.
Regulation XM3 sets forth the rules and procedures for compulsory securities transaction reports, extending the obligations to cover a broader range of instruments.
Regulation IXA2 became effective on the date of issue. Regulation XM3 comes into force on October 1 2009.
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