New Securities Listing Rules To Heighten Market Efficiency.
In July 2008, Singapore Exchange Limited (“SGX”) invited public comment on its proposed changes to securities listing rules. The proposed new rules, inter alia, introducing the listings of Life Science Companies (“LSC”) with no financial track record and revision of IPO distribution requirements, will allow for more alternatives that will widen the range of companies and product types listed on SGX. Following the public consultation, SGX had finalised the new listing rules and changes to securities listing rules. These changes will take effect on 24 March 2009. Some of the key new listing rules and requirements are: (1) removal of limit on capital structure; (2) revision of IPO distribution requirements; (3) introduction of new listing rules for LSC; (4) disclosure of details relating to profit guarantees or profit forecasts; and (5) disclosure of use of proceeds. The limit on the number of new shares from the exercise/conversion of outstanding convertibles will be removed to allow companies greater flexibility in determining their capital structure. At least 500 public shareholders shall be required for primary listings on the Mainboard. In the case of a secondary listing, the company shall be required to have at least either 500 shareholders in Singapore or 1,000 shareholders worldwide. SGX is introducing new admission rules and continuing listing requirements for LSC without financial track record. LSC wishing to list on the Mainboard will be required to demonstrate adequate working capital for its present requirements and for at least 12 months after listing. Companies are required to make immediate disclosure when the guaranteed profit level has, or has not, been met including material variations to the terms of agreement. Companies are also required to immediately announce the use of proceeds from fund raising exercises as and when they are materially disbursed, and whether the use is in accordance with what was previously announced.