Jurisdiction - Singapore
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Singapore – SGX Proposes Regulatory Framework For Secondary Listings.

3 July, 2014


Legal News & Analysis – Asia Pacific – Singapore  Capital Markets


The Singapore Exchange Limited (the “SGX“) recently issued a Consultation Paper on the Regulatory Framework for Secondary Listings (the “Consultation Paper“) on 4 June 2014, with an invitation for comments to be submitted by 25 June 2014. 

Secondary Listings


A secondary listing is generally sought for its multitude of advantages, including:

(a) widening the potential shareholder base, which could lead to an increase in investor recognition, higher stock prices and a lower cost of capital as the company’s shares become more accessible to global investors; 

(b) raising capital in dual markets, thereby improving access to capital;

(c) improving the liquidity of the company’s securities;

(d) enhancing the company’s reputation and prestige; and 

(e) increasing the visibility of the company, its products and/or services. 

According to the Consultation Paper, secondary listed companies on the SGX comprised a total market capitalisation of SGD 269bn out of the total market capitalisation of SGD 930.6bn for all Main Board listings in 2013. There are currently 33 secondary listed counters on the Main Board of the Singapore Exchange Securities Trading Limited (the “SGX-ST”), the majority of which are primarily listed on the Hong Kong stock exchange.


The Current Rules And Regulations 

Companies that are already listed or will be concurrently listed on a foreign stock exchange (the “home exchange“),1 and which fulfil the admission criteria of the Main Board of the SGX-ST are eligible to apply for a secondary listing. Foreign issuers are also subject to specific rules governing secondary listings in the Listing Manual of the SGX-ST (the “Listing Manual“), which include but are not limited to the following:


(a) the issuer must be, or will be, subjected to the listing rules of the home exchange;2



(b) Rule 217, where an issuer which has a secondary listing on the SGX-ST has continuing listing obligations requiring it to: 

(i) release all information and documents in English to the SGX at the same time as they are released to the home exchange;

(ii) inform the SGX of any issue of additional securities in a class already listed on the SGX-ST and the decision of the home exchange;4 and

(iii) comply with such other listing rules as may be applied by the SGX from time to time (whether before or after listing),

(c) the issuer must have at least 500 shareholders worldwide; or at least 500 shareholders in Singapore or 1,000 shareholders worldwide where the SGX and the issuer’s home exchange do not have an established framework and arrangement to facilitate the movement of shares between the jurisdictions;

(d) the financial statements submitted with the secondary listing application and future periodic financial reports need to be reconciled to the Singapore Financial Reporting Standards, International Financial Reporting Standards or United States Generally Accepted Accounting Principles;7 and 

(e) the issuer must have at least two independent directors who are residents of Singapore.8


The SGX has the power of absolute discretion in relation to the admission and removal of an issuer to the Official List, and the quotation and suspension of an issuer’s equity securities. In addition to granting conditional or unconditional approvals as well as rejecting applications for listing, the SGX has the right to vary or impose any such or additional conditions.9 Therefore, the SGX may require the listing applicant to comply with supplementary rules pursuant to Chapter 9 (Interested Person Transaction), Chapter 10 (Acquisitions and Realisations) and Part IV of Chapter 13 (Delisting) of the Listing Manual should it determine that additional safeguards are required for the protection of the minority shareholders’ interests and the maintenance of corporate governance standards.


The Proposed Revisions 

In response to feedback received from market professionals and participants, the SGX has proposed a regulatory framework with the purpose of providing clarity on the regulations and scope of the listing obligations, as well as the extent of the additional continuing listing conditions that may be imposed on secondary listed companies. 

The SGX intends to codify the following new Rule 751 in the Listing Manual: 

“An issuer with a secondary listing on the SGX Main Board must: 

(1) maintain its primary listing on the home exchange; 

(2) be subject to all the applicable listing rules of the home exchange (unless a waiver has been obtained for any non-compliance); and

(3) provide an annual certification in the form prescribed at Appendix [xx] that it has complied with the applicable continuing listing obligations in the SGX Listing Manual;
on a continuing basis.”, 

(the “Proposed Rule 751“).


Summarily, listing applicants with their primary listings on the main board of the home exchange in jurisdictions that are deemed by the SGX to be “developed” markets and which meet the SGX’s admission criteria need only comply with Rule 217 and the Proposed Rule 751. This is in contrast to listing applicants whose primary listings are on the main board of the home exchange in jurisdictions that are deemed by the SGX to be “developing” markets, as their home exchange’s legal and regulatory standards will be subjected to a full review by the SGX. In this regard, the SGX will impose, where it finds lacking, additional continuing obligations relating to the above-mentioned Chapters 9, 10 and 13 of the Listing Manual on the listing applicant. Listing applicants should be aware that only companies which have their primary listing on the main board, and not the junior board of their home exchange of a “developed” market, will be deemed to be primarily listed in a “developed” market. 

“Developed” vs “Developing” Markets 

The SGX’s assessment of whether a jurisdiction is a “developed” or “developing” market is largely dependent on the market classification accorded by leading index providers MSCI Inc. (the “MSCI“) and the FTSE Group (the “FTSE“), which takes into account the economic development and the legal and regulatory framework in relation to a country’s capital markets. Additionally, the SGX will also take into consideration whether the securities regulator of the listing applicant’s home exchange is a signatory to Annex A of the International Organization of Securities Commissions Multilateral Memorandum of Understanding. Examples of “developed” markets include Australia, Hong Kong, Japan, the United Kingdom and the United States of America.




The SGX will undertake a review on whether a listing applicant should be classified as originating from a “developed” market if it has a presence in multiple jurisdictions or if the jurisdiction is placed on the MSCI or FTSE’s Watch List or Review List, which places it at a risk of being re-classified from its status as a “developed” market. In this instance, the SGX will take into account factors such as the degree of shareholder protection available, the enforceability of Singapore court orders in the jurisdiction of dominant operations or incorporation, and whether there are any treaties or arrangements between Singapore and the jurisdiction in question.




The proposed regulatory framework is expected to take effect in the fourth quarter of 2014 and the Consultation Paper may be accessed at the SGX website.


End Notes:

Rule 217 of the Listing Manual of the SGX-ST. 

2 Rule 217 of the Listing Manual of the SGX-ST.


3 Rule 217(1) of the Listing Manual of the SGX-ST. 


4 Rule 217(2) of the Listing Manual of the SGX-ST.

5 Rule 217(3) of the Listing Manual of the SGX-ST.

6 Rule 210(1)(b) of the Listing Manual of the SGX-ST.

7 Rule 220(2) of the Listing Manual of the SGX-ST.

8 Rule 221 of the Listing Manual of the SGX-ST. 

9 Rule 202 of the Listing Manual of the SGX-ST.


ATMD Bird & Bird


For further information, please contact:


Marcus Chow, Partner, ATMD Bird & Bird

[email protected]


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