With effect from 3 November 2014, the Singapore Exchange (the “SGX”) has implemented a streamlined secondary listings framework to further enhance the stock market.

Under the new framework, companies with a primary listing in one of 22 Developed Markets and which meet the SGX’s admission standards can be secondary listed without the SGX imposing the continuing listing obligations in Chapters 9, 10 and 13 of the SGX Listing Rules (except for Rule 217 and new Rule 751 of the SGX Listing Rules). Such a company must remain primary listed on another stock exchange (the “Home Exchange”) and comply with all relevant rules of its Home Exchange.

In contrast, companies with a primary listing in jurisdictions other than the 22 Developed Markets (referred to as Developing Markets) will be subject to a full review by the SGX of the Home Exchange’s legal and regulatory requirements, particularly in relation to shareholder protection and corporate governance standards. Where areas related to interested person transactions, acquisitions and realisations, and delistings are found to require enhancements, the continuing listing obligations in Chapters 9, 10 and 13 of the SGX Listing Rules will be imposed.

How are markets classified?

The SGX will classify a jurisdiction as a Developed Market if it is classified as such by both MSCI and FTSE. FTSE and MSCI have classified 23 jurisdictions as Developed Markets. These are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States of America. All other jurisdictions will be treated as Developing Markets.

The SGX will also consider whether the securities regulator of the company’s Home Exchange is a signatory to Annex A of the IOSCO Multilateral Memorandum of Understanding (IOSCO MMOU). Where it is not a signatory, the SGX may choose to classify the company as being from a Developing Market even if it is classified as a Developed Market by the MSCI and FTSE.

Background

To read an article about the public consultation that was featured in a previous issue of the Allen & Gledhill Legal Bulletin (June 2014), please click here.

Reference materials

The following materials are available from the SGX website www.sgx.com: