Jurisdiction - Singapore
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Singapore – SGX Issues Two New Consultation Papers.

15 October, 2014


Legal News & Analysis – Asia Pacific – Singapore  Capital Markets


On 17 September 2014, the Singapore Exchange (“SGX”) issued two new consultation papers: one on the “Introduction of Minimum Trading Price and Codification of Regulatory Tools” (“MTP and Codification Consultation Paper”) and another on“Reinforcing the SGX Listings and Enforcement Framework” (“Listings and Enforcement Consultation Paper”). Each of the proposed measures set out in thesetwo consultation papers originated in an initial consultation by the SGX in February2014, and the two consultations bring these proposals closer to finalisation.
The MTP and Codification Consultation Paper deals with the following matters:


  • The proposed mechanics and amendments to the Mainboard Listing Rules for the implementation of the minimum trading price (“MTP”); and
  • The incorporation and codification into Chapter 7 of the Mainboard Listing Rules /Chapter 7 of the Catalist Listing Rules of the requirement, currently set out in PracticeNote 7.2 / Practice Note 7B, to notify the SGX about certain specific transactions.

The Listings and Enforcement Consultation Paper expands on the earlier proposals to establish a Listings Advisory Committee (“LAC”), a Listings Disciplinary Committee
(“LDC”), and a Listings Appeals Committee (“LApC”) and to enhance the SGX’s enforcement powers against issuers, directors, key executive officers, and issue managers.

This article takes a look at the proposals made. The last day for feedback for both consultations is 16 October 2014. The consultation papers may be obtained from the SGX website at these links:


  • The Listings and Enforcement Consultation Paper may be obtained here; and
  • The MTP and Codification Consultation Paper may be obtained here.

Key Proposals On The MTP

The key proposals in relation to the implementation of the MTP
are as follows:


  • The MTP will be fixed at a threshold of SGD 0.20, and will be based on a six-month volume-weighted average price (“VWAP”) determined at quarterly intervals.
  • The VWAP of an issuer’s shares is calculated by taking the total value of trades during the six-month period divided by the total volume of shares traded.
  • Issuers unable to record a six-month VWAP of SGD 0.20 or above at specified quarterly dates will be placed on a watch-list.
  • The MTP requirement will apply to equity securities, Real Estate Investment Trusts, and business trusts.
  • An issuer placed on the watch-list must meet the MTP requirement within 36 months of entering the watch-list (“cure period”).
  • Issuers that are unable to meet the MTP requirement at the end of the cure period will be involuntarily delisted
  • A transition period of 12 months from the date of introduction of the MTP requirement will be provided.
  • The SGX will waive all fees in relation to any share consolidation exercise undertaken by issuers in order to meet the MTP requirement. This fee waiver will be granted until two years after the date of commencement of the transition period.

Key Proposals On The Codification Of The Notification Requirement

Currently, issuers/controlling shareholders must 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:


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


As noted above, this requirement will be moved from Practice Note 7.2 / Practice Note 7B into the main body of the Mainboard and Catalist Listing Rules, with consequential changes to the Practice Notes. The Practice Notes will also be amended to provide illustrations of when the SGX will require the notification to be given, and these illustrations are also the subject of consultation questions.

As is currently the case, the issuer and/or the controlling shareholder must also notify the SGX again if:


  • Discussions or negotiations for the transaction(s) on which they have provided a notification ceases; and
  • The transaction on which they have provided a notification has been announced.


The notifications are to be submitted in a prescribed format. As is currently the case, upon provision of the notification to the SGX, the issuer and/or the controlling shareholder must also commence the maintenance of a list of persons privy to the transaction in an SGX-prescribed format. The SGX may request for the submission of this list as and when necessary.


Key Proposals On Reinforcing The Listings And Enforcement Framework

The key new proposals in the Listings and Enforcement Consultation Paper are as follows:


  • The types of remedies that the SGX should be empowered to take against issuers, directors, executive officers, and issue managers have been expanded. For example, it is proposed that the SGX may require issuers, for a period not exceeding three years, to obtain the prior approval of the SGX for the appointments of directors or executive officers in specified circumstances.
  • The SGX proposes that it should be empowered to impose against financial advisers advising on reverse take-over (“RTO”) applications on the Main Board the same types of sanctions available against issue managers. The same applies to the LDC. It also proposes to subject financial advisers advising on RTO applications to the same accreditation process that issue managers are currently subject to.
  • A Compliance Fund should be established into which fines and orders of costs will be paid.
  • The framework and processes of disciplinary and appeal proceedings have also been set out.

The framework of the LAC set out in the Listings and Enforcement Consultation Paper does not differ significantly from that first proposed in February 2014.




For further information, please contact:


Annabelle Yip, Partner, WongPartnership
[email protected]


Vivien Yui, Partner, WongPartnership
[email protected]


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