Provisional Okay Given For Stock Brokerages, Firms Say

At least three companies that have sought underwriter and brokerage licenses for the planned Cambodian stock exchange have received an “approval-in-principle” from the markets regulator and will learn in a month whether this approval is final, company representatives said yesterday.

Twenty-two companies applied in March for licenses to buy and sell stock on stock market, which is tentatively scheduled to launch in July next year. Officials at the Securities and Exchange Commission could not be reached yesterday and it was unclear how many firms have received provisional approval.

Lim Loong Seng, country head of OSK Indochina Bank, said that his company received approval-in-principle on Monday for an underwriting license and that the company had one month to complete final procedures, such as depositing about 10 percent of its approximately $10 million capital reserve requirement in the National Bank of Cambodia.

“We have already started hiring our people six months ago and we are just waiting for the word go,” he said, adding that final approval was not guaranteed. “I can’t say we’re going to get final approval. We met the criteria, so we are hopeful.”

Securities underwriter licenses would allow firms to buy and sell stock and launch initial public offerings of company stock, according to a government directive issued in 2009. Brokerage licenses limit the holder to trading in securities.

Han Kyung-tae, chief representative of Seoul-based Tong Yang Securities Company, whose company has applied for an underwriting license, said his company has also received provisional approval and that he was optimistic about his company’s chances.

“It’s good news that we are waiting for and we are very much ready to do investment business as soon as we get the final approval,” he said.

He said with the license, his company planned to sign contracts to prepare IPOs for more than one company but he declined to name them.

In Channy, president of Acleda Bank, said his bank also received provisional approval for a brokerage license which has capacity limited to buying and selling stocks and requires $1.5 million in capital.

He said the bank must deposit about $250,000 in the NBC and submit a risk assessment, internal audit, and other documents.

He said his bank could eventually apply for an underwriting license, but wants to first watch and learn as the stock markets grows.

“We want to start the small steps. If it works for the others we will do that,” he said.


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