To improve board-shareholder engagements, Singapore Exchange Regulation (SGX RegCo) is proposing a rule change to require listed issuers to assist shareholders who have requisitioned a general meeting so that the meeting can take place as soon as practicable. Issuers are to commence facilitative efforts within 21 days of deposit of the requisition notice. An issuer who disputes the validity of the requisition notice must apply for a court ruling within the same timeline.
Some areas in which SGX RegCo envisages the issuer should provide help to requisitionists include:
- releasing announcements and documents, such as notices, circulars and proxy forms, on SGXNet;
- sending documents, such as notices, circulars and proxy forms, to shareholders;
- collating any proxy forms submitted by shareholders at the issuer’s registered office;
- securing the board’s attendance at the shareholder-requisitioned meeting;
- enabling the appointed scrutineer to discharge its duties; and
- instructing its agents, including its share registrar and company secretary, to provide any necessary assistance such as preparing the mailing labels for the purposes of sending documents to shareholders and attending the shareholder-requisitioned meeting.
The requisition notice must meet the procedural requirements of the Companies Act 1967 of Singapore, including that requisitionists must hold at least 10% of the total number of paid-up shares. To facilitate the board’s assessment on the validity of the requisition notice, the requisition notice should minimally encompass the names and shareholdings of the requisitionists and a description of the resolutions proposed to be tabled at the shareholder-requisitioned meeting. When the board receives a requisition notice, it should immediately inform shareholders via SGXNet. Any subsequent material developments, including any application filed to court, should also be immediately announced.
"If investors have a stronger say, companies will be more motivated to consider their interests by improving both operational performance and shareholder returns. By enabling the convening of general meetings, we empower shareholders to drive change and exercise market discipline," said Tan Boon Gin, CEO of SGX RegCo.
In addition to encouraging market discipline, we are working on two other areas to spur companies to increase shareholder value: the strengthening of the board to enhance company performance and a reduction in market friction. Initiatives to improve the quality of boards and amplify shareholder voice have already been put in place; other measures are still in development and we will keep the market updated," he added.
The public consultation is open till 23 May 2024 and can be found here.
