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Singapore Exchange is introducing Practice Note 7D to provide greater clarity and guidance on the types of corporate actions or transactions that would require the appointment of a sponsor and those that need not. While addressing common transactions, the Practice Note is not an exhaustive list. Issuers are advised to consult their Continuing Sponsors. When in doubt, sponsors must consult the Exchange.
Sponsors play a pivotal role in the sponsor-supervised regulatory framework of Catalist. Full Sponsors assess the issuers’ suitability to list. Continuing Sponsors provide advice to and supervise the issuers on compliance with Catalist rules. Sponsors are also obligated to whistle blow to the Exchange where there is a suspected or affirmed breach of Catalist rules.
Catalist Rule 745(3) states that a sponsor is required for the provision of corporate finance advice. The sponsor could either be the issuer’s Continuing Sponsor or a sponsor approved by the Exchange.
There are situations where an issuer can choose to engage non-sponsor financial advisors. Such situations arise when the corporate finance advisory work relates to transactions that are procedural in nature and are expected to pose minimal regulatory risk. In the same context, a Continuing Sponsor may choose to outsource part of its work to other financial advisors in the market. The financial advisors engaged need not be SGX-approved sponsors but should be professionals with an established track record in their specialised fields.
The provision for such situations does not change the principal role of Continuing Sponsor to retain overall management and responsibility for the transaction. This includes advising the issuer on compliance with Catalist Rules and the proper discharge of its sponsor obligations pursuant to Catalist Rule 226(4).
For details of the Practice Note 7D, please refer to http://info.sgx.com/SGXRuleb.nsf/VwCPForm_LISTING_MANUAL_CATALIST?OpenView&Start=30
