SGX Unveils Catalist, A Sponsor-Supervised Listing Platform For Fast Growing Companies

Singapore Exchange Limited (SGX) today unveiled Catalist, its sponsor-supervised listing platform for fast growing local and international companies. Catalist is the transformed SESDAQ, SGX’s current second board, following an extensive study of other market models, and a public consultation in May 2007.

The name “Catalist” is a combination of the words “catalyst” and “listing”. It signifies a listing on this platform acting as the catalyst to propel the growth of a company.

“Being centred in Asia, Catalist will primarily, but by no means exclusively, serve Asian companies and investors. We shall reach out to companies beyond Asia as well, and we welcome investors, as well as intermediaries, from all regions of the globe. That positioning is consonant with SGX’s role as an Asian hub for global markets,” said Mr J Y Pillay, Chairman, SGX.

Catalist allows a sponsor to determine the suitability of a company for listing without SGX reviewing the admission of the company. The rules and processes for secondary fundraising and business expansion have been changed to meet growth companies’ needs.

“Catalist’s distinctive regulatory regime offers a faster and simpler way to raise capital. Our focus on quality listings continues with the retention of key safeguards for investors and stringent selection of sponsors. We will work closely with both investors and sponsors to make Catalist a success,” said Mr Hsieh Fu Hua, CEO, SGX.

A summary showing the key differences between Catalist and SESDAQ is found in Appendix 1.

SGX also announced today the rules for Catalist which will take effect on 17 December 2007. On the same day, SESDAQ will be renamed Catalist. The first group of sponsors is expected to be announced by January 2008, which is when Catalist will be open for initial public offerings (IPOs) under the new regime. SGX will establish a pool of quality sponsors and will continually seek to attract local and overseas sponsors to the Catalist market.

Current SESDAQ companies will continue to be governed by the existing rules. They will have at least two years from the announcement of the first batch of sponsors to appoint a sponsor and comply with the new rules. To assist in the transition of SESDAQ companies to Catalist, SGX plans to waive their listing fees for three years from the time they engage a sponsor and enter the new regime.

As part of the transitional arrangements, three companies have been approved to be listed on Catalist after 17 December 2007. These companies have submitted their listing applications under the existing SESDAQ rules and SGX has reviewed their application based on the SESDAQ framework and rules. Their IPOs will be accompanied by prospectuses registered by MAS. They are required to list on Catalist before the announcement of the first batch of sponsors. Along with the other SESDAQ companies, they have to move onto the new regime within the transitional period.

Key features of Catalist for sponsors and companies include:

Sponsors

Sponsors play a critical role in this new regime. Quality sponsors will determine the integrity and growth of the marketplace.

• Sponsors must meet strict entry and continuing requirements. An advisory panel of market practitioners will be on hand to advise SGX on the admission of sponsors and their registered professionals, where necessary. See Appendix 2 for the names of the panelists.

• Sponsors will be qualified as Full Sponsors or Continuing Sponsors. Full Sponsors will decide on the suitability of companies listing on Catalist. A Full Sponsor which brings a company to list must remain as its Sponsor for at least three years after IPO. All Sponsors are responsible for advising companies on rule compliance and reviewing all company announcements and circulars after IPO.

Companies

Catalist rules are designed to facilitate the growth of companies by enabling them to respond to business needs in a more efficient and timely manner.

• Companies must list through a Sponsor. They need not meet any prescribed financial entry criteria. There is no restriction on the size of companies seeking a listing on Catalist. § Instead of a prospectus, listing applicants must issue an Offer Document. The Offer Document will be lodged on the Catalist website for public comment.

• Post-IPO, companies must retain a Sponsor at all times; if not they face delisting.

• The annual limit on the issue of additional shares, and thresholds for acquisitions and disposals of assets that do not require shareholders’ approval will be raised.

The Catalist listing fees are shown in Appendix 2.

Note: To view the full details of the Catalist rules, please refer to www.sgxcatalist.com

APPENDIX 1

SUMMARY OF DIFFERENCES BETWEEN CATALIST & SESDAQ

	Admission	Previous SESDAQ Requirements	Catalist Requirements
1	IPO Document	· Must produce a Prospectus · Disclosure requirements & liabilities as stated in SFA/R. · SGX reviews the admission. · Lodged on MAS’ OPERA website	· Must produce an Offer Document · Similar requirements. · Sponsor will review admission and assess suitability to list. · Lodged on SGX’s Catalist website. · Includes statements from the directors and the Sponsor that the working capital available to the company will be sufficient for its present purposes and for at least 12 months from the date of listing.
2	Sponsor requirement	· Issuer will be admitted through an issue manager. · Post-IPO, issue manager will be “badged” to the issuer for 2 years.	· Issuer will be admitted by a Sponsor. · Post-IPO, issuer must retain a Sponsor at all times or else may face delisting. The Sponsor bringing the company to list must sponsor the issuer for at least 3 years post-listing.
3	Shareholding spread	· Greater of 15% of post-invitation share capital or 500K shares must be in public hands. · Quantitative distribution rules · At least 500 shareholders at IPO. · Post-IPO, 10% of shares must be in public hands.	· No change. · No quantitative requirements. · At least 200 shareholders at IPO. · No change.
4	Quantitative criteria	· Should normally have positive cash flow from operating activities.	· No minimum earnings or operational track record required.
5	Directors	· At least 2 independent directors. · For foreign companies, at least 2 of these independent directors must be resident in Singapore.	· No change. · For foreign companies, at least 1 of these independent directors must be resident in Singapore.
6	Restriction on Promoters’ Sale of Shares	· No restriction.	· Promoters must not sell vendor shares if (i) they collectively own less than 50% of issued capital at IPO; or (ii) such sale will cause their collective shareholding to fall below 50% of issued capital at the time of listing.
7	Lock-up periods	· Promoters: 100% of shareholdings at IPO must be moratorised for at least 6 months after listing, and 50% of such shareholdings moratorised for the next 6 months. · Pre-IPO investors with 5% shareholdings: 100% of profit portion (based on a cash formula) at IPO and for at least 6 months after listing.	· No change. · All pre-IPO investors: 100% of profit portion (based on a cash formula) at IPO and for at least 12 months after listing.
	Continuing	Previous SESDAQ Requirements	Catalist Requirements
8	Disclosure & Reporting	· Immediate disclosure of material information. · Half-yearly/quarterly reporting. · Code of Corporate Governance guidelines (comply or explain).	· No change. · No change. · No change.
9	Changes in capital	· Issuer can obtain shareholder mandate to issue up to 50% of the company’s share capital (of which shares issued on non pro-rata basis must not exceed 20%).	· Issuer can obtain shareholder mandate to issue up to 100% of the company’s share capital (of which shares issued on non pro-rata basis must not exceed 50%). The 50% limit can be increased to 100% in the case where shareholders approve by special resolution on or after the first shareholders’ meeting.
10	Interested Person Transactions	· Disclosure and/or shareholder approvals for certain transactions involving interested persons.	· No change.
11	Acquisitions and Realisations	· Acquisitions or disposals of assets of more than 20% but less than 100% of the “relevant bases” i.e. group net assets, profits, market capitalization or equity securities issued, as the case may be, will require shareholder approval. · Acquisitions above 100% of the relevant bases, or resulting in a change of control of the issuer, will be considered a very substantial acquisition or reverse takeover.	· Acquisitions of assets of more than 75% but less than 100% of the relevant bases or where the acquisition will result in a fundamental change in the issuer’s business, will require shareholder approval. · Disposals of assets of more than 50% or where the acquisition will result in a fundamental change in the issuer’s business, will require shareholder approval. · No change.
12	Circulars & Announce-ments	· SGX reviews circulars.	· Sponsor reviews circulars and announcements.

Note: To view the full details of the Catalist rules, please refer to www.sgxcatalist.com

APPENDIX 2

CATALIST Advisory Panel

Ms Christina Ong, Partner, Allen & Gledhill
Mr Daniel Ee, Chairman, Tiger Aviation Pte Ltd
Mr Gary Pryke, Senior Partner, Drew & Napier
Mr Goh Yew Lin, Executive Director, GK Goh Holdings
Mr Phillip Tan, Director, EQ Insurance Co Ltd
Mr Robert Tomlin, Vice Chairman-Asia, UBS
Mr Victor Liew, Adviser, Fullerton Fund Mgt Co Ltd

CATALIST - LISTING FEES

	Initial Listing Fee	Annual Listing Fee
Minimum Fee	S$30,000	S$15,000
Maximum Fee	S$100,000	S$50,000
Variable Rate (per S$ million) Basis	S$100 Market Capitalisation	S$25 Market Capitalisation