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Singapore – Listed Companies And Controlling Shareholders To Notify SGX When In Discussions Or Negotiations Concerning Certain M&A Transactions From 3 March 2014.

13 February, 2014


Legal News & Analysis – Asia Pacific – Singapore  Capital Markets


What Is the New Notification Requirement About?


The Singapore Exchange (“SGX”) has announced that it is enhancing its processes for dealing with unusual trading activities.


Among the changes is a new requirement to notify the SGX without delay in certain situations where there are discussions or negotiations that are likely to result in any of the following transactions (the “Specified M&A Transactions”):


  • Takeover of the issuer, which includes a scheme of arrangement or delisting;
  • Reverse takeover of the issuer; or
  • Very substantial acquisition by the issuer.


This new requirement affects transactions involving both Mainboard issuers as well as Catalist issuers. Practice Note 7.2 of the SGX Listing Rules for Mainboard issuers and Practice Note 7B for Catalist issuers have been amended accordingly.


Who Has To Notify?


Depending on the circumstances, the obligation to notify lies with the issuer and/or the controlling shareholder.


The issuer is required to notify the SGX where the issuer’s Board is:


  • made aware of discussions or negotiations on a potential proposal; or
  • in discussion or negotiation on an agreement or document, whether binding or non-binding,


that is likely to result in the Specified M&A Transactions.


The controlling shareholder is required to notify the SGX where


  • the discussions or negotiations are carried out by a controlling shareholder of the listed issuer, and without the knowledge of the issuer; and
  • the discussions or negotiations are likely to result in the Specified M&A Transactions.


When Does The Requirement Take Effect?


The new requirement will take effect on 3 March 2014. SGX has nevertheless indicated to market participants at a briefing that while the amendments take effect on 3 March 2014, issuers and others are encouraged to comply even before the effective date of the amendments.


How Does The New Requirement Affect You?


If you are currently involved (or planning to be involved) in a Specified M&A Transaction, the new regulation will compel you to consider when the obligation to notify will be triggered.


The other regulatory obligations regarding the announcement of the M&A transactions will remain unchanged (whether under the SGX Listing Rules, the Securities and Futures Act and/or the Takeover Code).


It is not the SGX’s intention to require every instance where parties enter into discussions or negotiations concerning an M&A transaction to be the subject of a notification under this regulation. Neither is it the case that the issuer can avoid disclosure simply because it is not a party that is directly involved in the discussions or negotiations concerning an M&A transaction. There will need to be some deliberation on the circumstances that are likely to result in a Specified M&A Transaction.


The SGX has explained that this change is to facilitate closer monitoring of trading activities, and to assist the SGX with monitoring compliance with and enforcement of relevant laws and regulations such as those pertaining to disclosure requirements and insider trading.


What Must You Do If You Are Required to Notify?


If you are required to make the notification to the SGX, the SGX has made clear that:


  • you must give the notification in a prescribed format, specifying the following:
    • The name of the listed company;
    • The type of transaction;
    • The name of the target company (if applicable); and
    • Details of the contact person;
  • there is no requirement to disclose the identity/details of the counterparty in the prescribed format;
  • you must notify the SGX if such discussions or negotiations cease; and
  •  you must also concurrently commence maintaining a list of persons privy to the transaction. This list must be provided to the SGX upon request. The format for this list has also been prescribed.




For further information, please contact:


Ng Wai King, Partner, WongPartnership

[email protected]


Annabelle Yip, WongPartnership

[email protected]


Andrew Ang, WongPartnership

[email protected]


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