Over the month of March 2017, the Singapore Exchange (SGX) introduced a number of changes to the Listing Rules. The key changes include the following:
- From 2 May 2017, all companies making an initial public offering on the Mainboard must allocate to retail investors, at least 5%, or SGD50 million, whichever is lower, of the shares offered for subscription or sale.
- SGX Mainboard listed companies will now be able to seek a general mandate for an issue of pro-rata renounceable rights shares of up to 100% of the share capital. The limit was previously 50% (under rule 806(2)).
- Except for certain specified documents, companies listed on the SGX may send documents to shareholders electronically provided the company’s constitution so allows.
Minimum allocations to retail investors
From 2 May 2017, all companies making an initial public offering on the Mainboard must allocate to retail investors, at least 5%, or SGD50 million, whichever is lower, of the shares offered for subscription or sale. A new Rule 233A will be included in the Listing Rules. Where the subscription or sale of securities in the public subscription tranche do not meet the relevant threshold at the close of the offering of securities for subscription or sale, the securities that are not subscribed or sold from the public subscription tranche may be reallocated to the placement tranche. Increase in general mandate for an issue of pro-rata renounceable rights shares SGX Mainboard listed companies will now be able to seek a general mandate for an issue of pro-rata renounceable rights shares of up to 100% of the share capital (Enhanced Rights Issue Limit). The limit was previously 50% (under rule 806(2)). The increase is a provisional increase. The SGX has effected this by way of a waiver of compliance with rule 806(2). The waiver has been specified to last until 31 December 2018. A new Practice Note 8.3 was issued on 13 March 2017 with immediate effect. Key conditions are as follows:
- The waiver applies only to renounceable rights issues.
- The issue of shares pursuant to the waiver must be for financing the issuers’ business needs.
- The company must disclose that its board is of the view that the rights issue is in the interests of the issuer and its shareholders.
Other requirements are as follows:
- The company must notify the SGX when a general mandate with an Enhanced Rights Issue Limit has been approved by shareholders.
- In its announcement of a rights issue utilising the Enhanced Rights Issue Limit, the company must set out the prescribed information, which includes the extent of the discount from the closing price immediately preceding the announcement.
Sending documents to shareholders electronically and other amendments to the Listing Rules
The following amendments to the Mainboard and Catalist rules came into effect on 31 March 2017:
- If a person is required to abstain from voting, circulars to shareholders must include a statement as follows: the issuer will disregard any votes cast on a resolution by a person required to abstain from voting by a listing rule or pursuant to a court order where such court order is served on the issuer.
- Documents may be sent to shareholders electronically provided the company’s constitution so allows. Certain documents must still be sent by way of hard copy. This includes notices of meeting (excluding circulars or letters referred to in that notice), and notices and documents relating to takeover offers and rights issues.
- Calculation of share capital is to exclude shares held by the issuer’s subsidiaries in the issuer.
- In calculating the percentage of shares purchased in a share buy-back, issuers previously calculated it as a percentage of issued ordinary shares. It is now to be calculated a percentage of issued shares excluding treasury shares and shares of the issuer held by its subsidiaries.
- The provision of funding to defend claims against directors and the provision of directors’ indemnity insurance have been expressly included as one of the exceptions to the interested person transactions rules of disclosure and shareholder approval.
A new consultation paper from the SGX
On 8 March 2017, the SGX issued a Consultation Paper on proposed changes to minimum bid size, forced order range and trading hours for the securities market. The consultation suggested the following changes:
- Increasing the minimum bid size for stocks and relevant securities trading in the S$1.00 to S$1.99 range from the current $0.005 to $0.01;
- Widening of the forced order range for stocks and relevant securities from the current +/- 20 bids to +/- 30 bids; and
- Changing trading hours via a mid-day break from 12.00pm to 1.00pm.