Singapore hopes dual class rules will attract listings

Author: Amélie Labbé | Published: 14 Aug 2018

The Singapore Exchange (SGX) hopes its new dual class share (DCS) listing rules, launched on June 26, will attract more issuers, especially technology startups. But its approach to vetting issuers is already a concern.

Compared to the criteria for weighted voting rights (WVR) listings in Hong Kong, the threshold is lower in Singapore but issuers may be met with other challenges. Factors that the SGX may consider in assessing suitability include the business model or track record of the issuer, the role and contribution of the intended multiple vote shareholders to the success of the issuer and participation by sophisticated investors. Guidance on suitability factors will be provided through precedent cases.

"The very flexibility of the DCS rules may be a challenge in itself in that the first IPOs to implement them will come under greater scrutiny and there may be more pressure on the authorities to justify the terms. "