The proposed new rules allow for more alternatives that will widen the range of companies and product types listed on SGX. In addition to the diversity of listings, changes to existing rules will enable better disclosure and increased transparency for the benefit of investors.
A. To allow more listing alternatives
In response to the interest of the marketplace, the Exchange proposes new rules to introduce the listings of :-
i. Life-science companies with no financial track record. Life science companies at the stage of bringing products to the market will now be able to list on the Exchange if they demonstrate their ability to attract funds from professional investors and to generate revenue. After listing, the companies are required to provide quarterly disclosure on the use of funds to ensure transparency and timely disclosure of material information.
ii. New classes of investment funds. Investment funds in the private equity space and 'blind pool funds' that have not identified specific investments but have stated investment strategies can now be listed on the Exchange. The introduction of rules catering to these funds brings a wider selection of product offerings to the market.
iii. New classes of non-tradable funds will be subjected to current hedge fund listing rules.
B. Revised IPO distribution requirement
The wider range of companies and product types will cater to the needs of various groups of investors. To enable issuers and issue managers to more effectively target their investor groups, the Exchange proposes greater flexibility in terms of IPO distribution. As such, the shareholding distribution for IPOs is now revised to a minimum number of 500 public shareholders, and for secondary listings, a minimum number of 500 shareholders worldwide.
C. Better disclosure of material information
i. Waivers granted to be disclosed and Exceptions to Certain Rules
- For transparency, waivers granted need to be disclosed. An issuer that receives any waiver by the Exchange is required to announce the following :-
§ reasons for seeking the waiver, and
§ the conditions (if any) imposed by the Exchange.
In addition, the Exchange is introducing practical exceptions to certain listing rules. For example, when an issuer is listed close to the deadline of financial results reporting, and
- When placements are made through a placement agent, companies are required to disclose the types of investors being targeted or excluded, and how shareholders’ interests have been taken into account. Where no placement agent has been appointed, the issuer will have to explain how the placees were identified and the number of shares placed to them. In addition, the issuer will disclose the percentage of placement proceeds allocated for each stated use.
iii. Timely disclosure of details relating to profit guarantees
- The Exchange proposes new disclosure requirements for acquisition of businesses and assets where profit guarantees are provided by vendors. Timely and adequate disclosure of material information will enable investors to make informed decisions. These disclosures will also secure accountability by the board of directors of the issuer when making acquisitions based on profit guarantees. Such disclosures will serve to better safeguard interests of shareholders.
iv. Fundamental Change of Principal Business
- An issuer seeking a fundamental change in its principal business is required to obtain shareholders’ approval before such change is effected. Where an issuer intends to set up an investment fund or undertake any businesses in investment fund management, the issuer must first demonstrate to the Exchange that it satisfies the listing requirements for investment funds.
Market participants and members of the public are encouraged to participate in this public consultation. The consultation paper which sets out the proposed amendments to the listing rules will be available from 10 July 2008 to 7 August 2008. All feedback and suggestions for the proposed changes should reach us by 7 August 2008 via email and either by post/courier or fax:-
Email : lm@sgx.com
Fax : (65) 6535 7919
Post/Courier : Singapore Exchange Limited
2 Shenton Way, SGX Centre 1, #19-00
Singapore 068804
Attn: Siew Wun Mui, Risk Management and Regulation