.jpg)
The Singapore Exchange today announced revisions to its securities listing rules that will take effect from 3 December 2007. This follows a public consultation in May this year, on proposed rule amendments. The rule changes improve transparency and respond to demands and development of the capital market in Singapore.
“The constructive feedback and suggestions from market participants during the consultation exercise has helped us fine-tune the rules to meet market needs. These listing rule changes will not only improve market efficiency and shorten trading halts; it will also add clarity and promote accountability of listed companies,” said Ms Yeo Lian Sim, Senior Executive Vice President and Head of Risk Management and Regulation, SGX.
The key changes are as follows:-
Enhance Market Efficiency
1. Shorten Minimum Duration of Trading Halt
SGX will shorten trading halts to a minimum of 30 minutes instead of 60 minutes to minimise market disruption. With increasing familiarity with market practices and wider availability of information, the market can progress to a 30 minute halt for dissemination of information.
2. Cash Companies
(a) Continued Trading of Cash Company
- Instead of suspending the trading of companies whose assets are substantially cash, the amended Rule 1018 (1) provides for trading with safeguards of the cash balances. The issuer who has sold its operations and assets must place the funds in an escrow account. These funds may be used for pro-rata distribution to shareholders, or expenses incurred in a Reverse-Take-Over (RTO) scheme approved by shareholders. The issuer is required to provide monthly updates on asset value and cash utilisation, and quarterly updates of milestones achieved in obtaining a new business.
(b) Period of Extension for Cash Exit Offer
- Rule 1018 (2) is revised to shorten the timeline for obtaining a new business, so that after the initial 12 months, the issuer may be granted a maximum of 6 months’ extension on provision of milestones for investors to evaluate its progress. If the issuer is unable to meet its milestones, it is required to make a cash exit offer to its shareholders and delist within 6 months.
3. Suspension of Trading Rule
(a) Rule 1303 (1) is revised to state that in a take-over situation, the Exchange will suspend trading of the shares of the issuer only at the close of the take-over offer, instead of at
the point where the issuer fails to comply with the 10% free float requirement.
(b) Rule 1303 (3) is amended to reinforce the principle more clearly, that the Exchange may suspend trading when the issuer is unable to (i) reasonably assess its financial
position and (ii) make sufficient disclosure of its shares to the Exchange and its shareholders to maintain an “informed market”.
Greater Transparency
4. Grant of Employee Share Option
A new Rule 704(27) is introduced to ensure that issuers announce promptly each grant of options and information such as date of grant, exercise price of options granted, number of options granted to directors, controlling shareholders and their associates, validity period of the options etc. This rule will further strengthen transparency and accountability in relation to the grant of options. Information will be available for shareholders to assess the financial implications, as well as, the performance of the company in the issue of options.
5. Shareholders’ Approval for Change of Auditors
To enhance transparency, a new rule is introduced to require the issuer to obtain shareholders’ approval for a change of auditors. A copy of the notice convening a meeting for this purpose will need to go to the Exchange.
Other enhancements
6. New sub-rules 404 (8) and 404 (9) will streamline processes by clarifying the listing rules which are not applicable to REITs and ETFs.
7. The term “Issued Share Capital” will be referred to as “total number of issued shares excluding treasury shares” to reflect the changes to the Companies Act 2005.
A complete list of the listing rule amendments can be accessed on SGX’s website at www.sgx.com.
SGX-ST Listing Manual Amendments - Effective 3 December 2007
