Date Issued: 23 May 2007
Date Closed: 20 June 2007
Status: Closed for Consultation
THE SINGAPORE EXCHANGE ISSUES CONSULTATION PAPERS ON PROPOSED RULES FOR NEW BOARD AND PROPOSED INTRODUCTION OF A WATCH-LIST AND LISTING RULE AMENDMENT RELATING TO EXIT OFFER IN A DIRECTED DELISTING
Singapore Exchange Limited (SGX) is inviting public comments on proposed new listing rules aimed at enhancing the competitiveness of its securities market. For the Mainboard, the focus will be on attracting larger companies and maintaining the quality of listed companies. For SESDAQ, SGX proposes to provide a conducive listing platform for growth companies by transforming it into a sponsor-supervised board (new board). The new board will target both local and foreign growth companies.
The proposed changes serve to promote investor confidence and attract more quality issuers and intermediaries. This will in turn foster the growth and development of the market.
“The global landscape is evolving and we have to continually review our value proposition to ensure we stay relevant and competitive. The focus for our Mainboard will be size and quality. As for SESDAQ, we are proposing a transformation – a sponsor-supervised board that will best cater to the growth market,” said Mr Hsieh Fu Hua, CEO of SGX. “These changes will enable us to advance our Asian Gateway position, with clearly differentiated markets, focus on quality standards and a scalable model for growth.”
The proposed changes to the Mainboard and SESDAQ include the following:
MAINBOARD
· Review minimum entry size of companies to provide guidance to intermediaries and issuers.
· Introduction of minimum continuing listing criteria based on financial performance and size. Having continuing standards will enhance the value of a listing and the premium that investors accord to listed companies.
SESDAQ
· Transformation of the current regime into a sponsor-supervision model. Issuers must continue to comply with SGX rules, but the supervisory role will be undertaken by approved intermediaries (Sponsors). SGX will maintain market quality by regulating Sponsors directly via strict admission and continuing obligation rules. In addition, key issuer rules and safeguards will be retained.
· The Sponsor will decide on the suitability of the company for listing on the new board and review IPO admission. There will be no prescribed financial entry criteria.
· Listing applicants must produce an Offer Document instead of a prospectus. SGX will apply for an exemption from prospectus requirements under the law, such that the Offer Document will not need to be registered with the Monetary Authority of Singapore (MAS). However, we expect that prospectus liabilities will continue to apply. SGX will not review the admission, shortening the IPO application process.
· The IPO market capitalisation of companies will be restricted to a maximum of S$150 million. This will delineate the two boards clearly at the start, while the market adapts to the new regime.
· Companies on the new board must retain a Sponsor at all times. Sponsors are responsible for assisting the company’s rule compliance, including the review of companies’ circulars.
· The annual limit on the issue of additional shares, and thresholds for acquisitions and disposals of assets that do not require shareholders’ approval, will be raised. This is to facilitate the development of growth companies.
· There will be no change to the current process for the trading and clearing of securities.
SESDAQ companies will be given at least two years to engage Sponsors and comply with the new rules. To ease the transition, SGX will waive listing fees for three years from the time SESDAQ companies adopt the new rules.
“SESDAQ was introduced to meet the capital raising needs of local small to medium enterprises. While it has largely served its developmental role, to achieve further growth and sustained performance over the longer term, a transformation is required. The introduction of the new board is supported by findings from a survey of market participants and review of various second boards,” said Mr Lawrence Wong, Executive Vice President and Head of Listings.
The proposed changes are set out in detail in the consultation papers and will be made available on SGX website at www.sgx.com from 23 May 2007 to 20 June 2007. Market participants and members of the public can forward their feedback by 20 June 2007 via email and either by post/courier or fax:
Market participants and members of the public can forward their feedback and suggestions on the proposed changes from today to 20 June 2007 via email and either by post/courier or by fax.
| Email: | rules@sgx.com |
| Post/Courier: | Singapore Exchange Limited
2 Shenton Way, SGX Centre 1
#19-00,
Singapore 068804 |
| Attn: | Lily Chia
Vice President, Listings |
| Fax: | (65) 6536 6495 |
| SGX Consultation Paper - 23 May 2007 |
| Title | (In PDF) |
| Consultation on Listing Manual Rules for New Board |  |
| Consulation on Proposed Introduction of a Watch-List and Listing Rule Amendment Relating to Exit Offer in a Directed Delisting | |
|
