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Investment advice and corporate finance
Module 12Investment Management and Corporate FinanceAn exchange holding company owns all the shares of its approved stock exchange subsidiary and plans to sell enough to cut its stake to 70%. What does the CMSA require?
Section 23 of the CMSA provides that no exchange holding company shall reduce its shareholding in a stock exchange, derivatives exchange, approved clearing house or central depository below 75% (or another percentage the Minister specifies) of its issued capital without first obtaining the Minister's written approval. A cut from 100% to 70% crosses that line, so the Minister must approve first. The SC is not the approving authority under s.23. Prior notification to the SC under s.24 applies to disposals of specified assets and is expressly without prejudice to s.23, so it cannot replace the Minister's approval. A 51% control test does not appear in s.23. Source: CMSA 2007 ss.23, 24(1) (as at October 2026).
Candidates use a simple-majority test, or treat the s.24 asset notification as covering a sale of the exchange's own shares.
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