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“The introduction of these new rules is part of our on-going efforts to heighten market transparency by alerting investors to the financial developments of listed companies under the “Watch-List”. We expect that improvement in the overall quality of listings will further investor confidence in our marketplace,” said Ms Yeo Lian Sim, Senior Executive Vice President and Head of Risk Management and Regulation, SGX.
Under the new Part V of Chapter 13 of the SGX-ST Listing Manual, listed companies will be placed on the “Watch-List” if they register:-
a. pre-tax losses for the three most recently completed consecutive financial years (based on the latest announced full year consolidated accounts, excluding exceptional or non-recurrent income and extraordinary items); and
Companies on the “Watch-List” are required to provide the market with quarterly updates on their financial situation, including their future direction and any other material development that may have a significant impact on their financial position.
A listed company on the “Watch-List” may apply for its removal from the “Watch-List” upon meeting either one of the following requirements, such as :-
a. it records consolidated pre-tax profit for the latest completed financial year and has an average daily market capitalisation of $40 million or more over the last 120 market days, on which trading was not halted or suspended for the full market day; or
The listed company has 24 months to restore its financial health to prescribed levels. It will face delisting if it is unable to satisfy the criteria for removal from the “Watch-List”. Listed companies under the “Watch-List” will have more reasons to improve their business operations, practise greater transparency and restore their financial health within the given timeframe.
The rules on the “Watch-List” do not apply to investment funds, real-estate investment trusts, business trusts, global depository receipts (GDRs) and secondary-listed companies listed on the Mainboard.
For the “Watch-List”, the Exchange is introducing a new Appendix and a new practice Note in its SGX-ST Listing Manual for listed companies as follows :-
i. Appendix 13.1 provides the announcement template for listed companies that have recorded three consecutive years’ losses;
The new introduction of the “Watch-List” and listing rule amendments can be found below.
