Singapore Exchange Limited (SGX) has proposed new listing rules aimed at enhancing the competitiveness of its securities market.
For listing on SGX Mainboard, SGX will review the minimum entry size of companies as well as introducing continuing listing criteria based on companies' financial performance and size. A watch-list is proposed for issuers who have recorded continuous loses for a prolonged period and are unable to maintain the proposed minimum market capitalization. The aim is to alert investors to the financial condition and the risk of delisting of such issuers.
SGX also proposed to transform its existing second board, SESDAQ, into a sponsor-supervised board. Under the sponsor-supervision model, SGX will authorize a pool of intermediaries or sponsors through strict admission and on-going requirements. These sponsors will in turn determine the suitability of a company to list and supervise listed companies' compliance with their ongoing obligations in the rules. Issuers will be obliged to retain a sponsor at all times
Under the new model, listing applicants will need to produce an Offer Document, instead of a prospectus. The Offer Document will not need to be registered with the Monetary Authority of Singapore (MAS) and SGX will not review the initial public offering (IPO) admissions, shortening the listing process.
The IPO market capitalization of companies under the new model will be restricted to a maximum of S$150 million ($99 million), exhibiting a clear distinction from companies listed on the Mainboard.
The new model also allows more flexibility in certain areas post-listing, including the increase in the annual limit on the issue of additional shares and the threshold for acquisition and disposals of assets that do not require shareholders' approval, in order to help growth companies.
Full details of the proposed changes are set out in the Consultation on Proposed Rules for New Board and Proposed Introduction of a Watch-list and Listing Rule Amendment Relating to Exit Offer in Directed Delisting, available on the SGX website (http://info.sgx.com/SGXWeb_RMR.nsf/NEWDOCNAME/PC_230507).