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This Regulator’s Column seeks to provide the expectations of the Singapore Exchange Regulation (“SGX RegCo”) on the conduct of issuers’ general meetings amid the extension of the temporary legislative relief [1]. Such legislation allows entities to hold general meetings via electronic means amid the COVID-19 situation, and will continue to be in force until revoked or amended by the Ministry of Law [2].
Since the issuance of the Guidance on the Conduct of General Meetings Amid Evolving COVID-19 Situation dated 1 October 2020 (“Guidance”) and available here, SGX RegCo has observed that there are issuers which publicly addressed shareholders’ questions received in advance of the general meeting only after the closing date and time for the lodgment of the proxy forms [3].
For example, we have noted instances where issuers’ responses to shareholders’ submitted questions were only disclosed via SGXNET on the day before or on the morning of the general meetings. Shareholders therefore do not have the benefit of the issuer’s responses to their substantial and relevant questions before casting their votes through the lodgment of proxy forms.
On the other hand, some issuers have demonstrated the best practice of publicly addressing shareholders’ substantial and relevant questions received prior to the general meeting on SGXNET and, if available, the issuers’ corporate website as well as at any virtual information session that the issuer may organise; before the closing date and time for the lodgment of the proxy forms.
In addition, SGX RegCo notes that issuers at present generally do not adopt real-time remote electronic voting when conducting their general meetings even though this technology is available in the market. As mentioned in the Guidance, issuers are encouraged to adopt enhanced digital tools at their general meetings, such as allowing for real-time remote electronic voting and real-time electronic communication, to facilitate shareholder engagement.
In this regard, issuers which do not utilise both (i) real-time remote electronic voting and (ii) real-time electronic communication at their general meetings, should incorporate the practices below in their conduct of general meetings, in addition to the checklist set out in the Guidance. This will take effect for any notice of general meeting served after 1 January 2022:
1. Issuers to organise a virtual information session for certain corporate actions
Issuers should organise a virtual information session for shareholders when convening a general meeting to seek shareholders’ approval, in relation to the corporate actions set out in Appendix A below.
This would present the Board of Directors and/or management with an opportunity to interact with shareholders and address any questions they may have prior to casting their vote.
Details on the virtual information session should be published on SGXNET and, if available, the issuer’s corporate website, and contain the following:
- The date and time of the session;
- The agenda of the session;
- Particulars of the means by which the session will be conducted. In this regard, the session should be conducted by electronic means (e.g. “live” webcast) and/or by audio means (e.g. a “live” audio only link such as a telephone number); and
- The arrangements for shareholders to participate in the session, e.g. the link to access the “live” webcast and/or the “live” audio only link such as a telephone number, as well as any other ancillary information (e.g. whether shareholders will have to pre-register on an online platform etc.).
Issuers should adopt real-time electronic communication facilities, such as video conferencing, tele-conferencing or live chat, to enable questions to be raised, and responded to, at the virtual information session.
The virtual information session should be held at no cost to shareholders.
Issuers are to either publish the minutes, or provide a link for shareholders to access a recording of the virtual information session on SGXNET and, if available, the issuer’s corporate website, at least 72 hours prior to the closing date and time for the lodgment of the proxy forms (See Section 4. below). If publishing the minutes, this should record substantial and relevant comments or queries from shareholders and responses from the Board of Directors and/or management.
2. When organising any virtual information session, issuers are encouraged to send their notice of general meeting to shareholders at least 21 calendar days before the general meeting
When organising any virtual information session, issuers are encouraged to send their notice of general meeting to shareholders at least 21 calendar days before the general meeting [4]. This is having considered that additional time would be taken to hold a virtual information session prior to the general meeting [5].
3. After the publication of the notice of general meeting, shareholders should be allowed at least 7 calendar days to submit their questions
After the publication of the notice of general meeting [6], shareholders should be allowed at least 7 calendar days to submit their questions. This is to accord shareholders with reasonable time to consider the matters to be tabled at the general meeting and submit their questions.
Issuers should encourage shareholders to submit their questions promptly for these to be addressed. In addition, as set out in the Guidance, shareholders should be informed of any cut-off time within which questions must be submitted. Shareholders should also be informed of when their questions would be responded to.
4. All substantial and relevant questions received from shareholders prior to a general meeting, should be publicly addressed by the Board of Directors and/or management at least:-
(i) 48 hours prior to the closing date and time for the lodgment of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 14 calendar days before the meeting; and
(ii) 72 hours prior to the closing date and time for the lodgment of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 21 calendar days before the meeting. For the avoidance of doubt, this is also applicable for the list of corporate actions set out in Appendix A
We wish to remind issuers that they should not be selective in the questions that they wish to answer. All substantial and relevant questions received from shareholders prior to a general meeting, should be publicly addressed by the Board of Directors and/or management at least:-
(i) 48 hours prior to the closing date and time for the lodgment of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 14 calendar days before the meeting [7]; and
(ii) 72 hours prior to the closing date and time for the lodgment of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 21 calendar days before the meeting7.For the avoidance of doubt, this is also applicable for the list of corporate actions set out in Appendix A.
This is to facilitate shareholders’ votes and allow shareholders to make an informed decision on their investments. In this regard, issuers should take care to avoid incomplete, non-specific and vague responses.
Issuers should publish their responses on SGXNET and, if available, the issuer’s corporate website. For the avoidance of doubt, this would include the substantial and relevant questions which were addressed at any virtual information session that the issuer may organise.
After the cut-off time for the submission of questions, if there are subsequent clarifications sought, or follow-up questions, this may be addressed at the general meeting. To do so, issuers are encouraged to adopt real-time electronic communication facilities such as video conferencing, tele-conferencing or live chat, to enable questions to be raised, and responded to, at general meetings.
Conclusion
We wish to reiterate to issuers the importance of responding in a timely manner to shareholders’ questions, so that shareholders have the benefit of the responses to their questions before casting their votes on important resolutions.
The quality of communication and engagement with shareholders remains just as and if not, even more important when issuers are conducting their general meetings via electronic means.
We are monitoring the market’s adoption of enhanced digital tools at their general meetings such as allowing for real-time remote electronic voting and real-time electronic communication.
SGX RegCo will also evaluate the market’s adoption of the practices set out in this regulator’s column and discuss with the relevant authorities as to whether to incorporate them into the Guidance.
Tan Boon Gin
CEO
SGX RegCo
Appendix A
Issuers should organise a virtual information session for shareholders when convening a general meeting to seek shareholders’ approval, in relation to the following corporate actions set out below:-
(a) transfer of an SGX Catalist listing to the SGX Main Board pursuant to Catalist Rule 408 / Mainboard Rule 212;
(b) transfer of an SGX Main Board listing to the SGX Catalist Board pursuant to Catalist Rule 410;
(c) issue of shares or convertible securities which require approval of shareholders in a general meeting under Mainboard Rule 805 / Catalist Rule 805, except where the issue of securities is pursuant to an employee or performance share/share option plan, bonus issue, scrip dividend, or stock/share split or consolidation;
(d) capital reduction or distribution;
(e) interested person transaction requiring specific shareholders' approval pursuant to Mainboard Rule 906 / Catalist Rule 906;
(f) major transaction under Mainboard Rule 1014 / Catalist Rule 1014;
(g) very substantial acquisition or reverse takeover under Mainboard Rule 1015 / Catalist Rule 1015;
(h) whitewash resolution;
(i) scheme of arrangement;
(j) delisting pursuant to Mainboard Rule 1307 / Catalist Rule 1307;
(k) proposed diversification of business; and
(l) any other corporate action which SGX RegCo considers appropriate [8]
[1] The COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings) Orders.
[2] Please refer to the 7 April 2021 SGX announcement titled “Extension of Temporary Legislative Relief for Conduct of General Meetings via Electronic Means Beyond 30 June 2021”, available via the following web-link: https://www.sgx.com/media-centre/20210407-extension-temporary-legislative-relief-conduct-general-meetings-electronic.
[3] The checklist in the Guidance provides that for issuers which hold their general meetings via electronic means, shareholders may vote by appointing the chairman of the meeting as proxy. If issuers conduct general meetings partly by electronic means, shareholders who attend the meeting physically must appoint the chairman of the meeting as proxy in order to vote, unless issuers have allowed for real-time remote electronic voting.
[4] This notice period excludes the date of the notice and the date of the meeting.
[5] Listing Rule 704(15) provides amongst others, that for meetings to pass special resolution(s), the notice must be sent to shareholders at least 21 calendar days before the meeting (excluding the date of notice and the date of meeting). In this regard, issuers convening general meetings to pass special resolution(s) should have sufficient time to hold a virtual information session after their notices have been sent out.
[6] The checklist in the Guidance provides that all notices of general meeting of issuers must be published on SGXNET and, if available, the issuer’s corporate website. The checklist in the Guidance also provides that all documents relating to the business of the general meeting must be published on SGXNET and, if available, the issuer’s corporate website, and published together with the notice of general meeting.
[7] Listing Rule 704(15) provides amongst others, that all notices convening meetings must be sent to shareholders at least 14 calendar days before the meeting (excluding the date of notice and the date of meeting). For meetings to pass special resolution(s), the notice must be sent to shareholders at least 21 calendar days before the meeting (excluding the date of notice and the date of meeting).
[8] Advance notice will be given to issuers in this case.
