Singapore Exchange Limited (SGX) announced today that it is introducing a new research scheme, SGX Equity Research Insights (SERI), to better address the needs of its listed companies and their investors. SERI will commence on 20 October 2009 and replace the current Research Incentive Scheme (RIS).
SERI adopts a customised approach to cater to different segments of listed companies, taking into account market feedback. The new scheme will initially comprise two modules – Structured Module and Sector Module.
The Structured Module is developed with the primary purpose of providing investors with requisite information on companies that have little or no research coverage, in line with the objective of the RIS. The research reports will have a standardised format. These reports will contain analyses and views on company fundamentals including industry prospects, its business and management, performance, earnings outlook and competitive landscape. This will afford investors better appreciation of its content while facilitating comparison where applicable. The research reports will not feature any investment ratings. The Structured Module is open to participation by all SGX-listed companies. Standard & Poor’s LLC, a recognised name in providing research analysis, has been appointed to commence this module.
The Sector Module provides fully-rated research reports to meet the needs of investors in sectors where specialised industry knowledge is critical in the analysis of the companies. SGX has identified Energy, Offshore and Marine as the sectors to initiate this module. For a start, DnB Nor Markets, the investment banking arm of Norway’s largest financial services group, has been appointed for this module given its research capabilities in these sectors.
Mr Lawrence Wong, Executive Vice President and Head of Listings at SGX said, “The SERI reflects the continuing evolution of research needs in our marketplace. Its modular approach is scalable and provides flexibility in meeting the varied and changing needs of our listed companies and their investors.”
Arrangements will be made to transfer companies on RIS to SERI unless they choose to opt out of the new scheme. Research firms on RIS will utilise the next three months to complete their research obligations under RIS which will end on 14 October 2009.
SGX will undertake the administration and management of the scheme. For these two modules under SERI, a participating company pays an annual fee of $12,000. The Monetary Authority of Singapore and SGX will jointly provide subsidies for companies with lower market capitalisation. A subsidy of S$2,000 will be given to participating companies with market capitalisation below $100million. Participating companies with a market capitalisation between $100million to S$300million will receive a subsidy of S$1000.