This follows the public consultation in August 2001 on proposed amendments to the listing rules. All in all, the exchange received a total of 27 submissions during the consultation process. The New Manual reflects international best practice and feedback obtained from market practitioners and members of the public. It incorporates key amendments relating to the following areas: -
- Initial shareholding spread and public float requirement - A graduated scale, based on market capitalization, has been introduced for the minimum float applicable to Main Board applicants.
- IPO Distribution - The requirements have been revised to give issue managers greater flexibility in the distribution of IPO shares.
- Moratorium - The moratorium period for Main Board companies admitted under the profit test has been shortened from 12 to 6 months and, in the case of Sesdaq companies, from 24 to 12 months. Unlike the current requirements which "lock up" the entire shareholding interests of investors who take a substantial stake (within one year of IPO) for a period of 6 months, the revised rule will allow them to dispose of the portion of their shareholdings representing their original cost of investment, based on a prescribed Cash Formula.
- Disclosure of subscription of IPO shares by parties associated to the offering - A new rule has been introduced to require disclosure to be made (before the listing of the issuer's securities) if parties associated with the offering subscribe for the issuer's securities.
- Covered warrants requirements - A new chapter formalizing current internal guidelines on the issuance of covered warrants has been incorporated into the New Manual.
- Disclosure in IPO prospectuses - Prospectus disclosure will now have to comply with the law which prescribes a general test instead of a checklist. Accordingly, the IOSCO Document will no longer be mandated. The requirements for proforma accounts in the prospectus have also been amended. In respect of proforma balance sheets, issuers will now be required to disclose only the latest pro forma balance sheet (instead of 5 years as currently required). In addition, the reporting accountant must now give an opinion that the proforma accounts have been properly prepared.
- Continuous disclosure - The general disclosure obligations on listed issuers have been reframed. The rules have also been amended to spell out clearly the exceptions from the requirements to make disclosure. A rule requiring disclosure of waivers granted has also been included in the New Manual.
- Interested person transaction (IPT) - The thresholds for determining whether an IPT requires announcement and/or shareholder approval have been streamlined. In addition, the rules have been amended such that the circular in connection with seeking shareholder approval for an IPT mandate must contain an opinion from an independent financial adviser (instead of the audit committee as currently required) on the methods and procedures used to determine prices. The audit committee's opinion will only be required if it differs from the opinion of the independent financial adviser. Issuers must now disclose in the annual report all IPTs conducted during the financial year. This is in addition to the current requirement to disclose in the annual report IPTs conducted pursuant to the IPT mandate.
- Circular and annual report - A new chapter setting out the requirements for circulars and annual reports has been incorporated into the New Manual.
- Suspension and delisting - A new chapter formalizing the exchange's powers in relation to suspension and delisting has been incorporated into the New Manual. In addition, a new rule has been introduced to require financially-troubled issuers that have been suspended for a prolonged period to take the necessary action for resumption of trading in its securities.
Admission and other compliance until 1 July 2002 must be in accordance with the existing listing rules. However, where necessary, SGX may publish transitional arrangements in relation to any amended or new listing rule. The New Manual will be available on SGX's website at www.sgx.com from 10 May 2002. Hard copies of the New Manual will be made available to listed companies. It can also be purchased from the exchange from end June 2002.
