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Introduction

The Singapore Exchange Securities Trading Limited (SGX-ST) is currently the only approved securities exchange in Singapore.

In 2021, there were eight initial public offerings (IPOs) in Singapore, which raised approximately S$1.7 billion. Three were Mainboard listings: two were real estate investment trusts (REITs), which have portfolios mainly comprising assets located in the United States, Canada and Asia, and the other Mainboard listing was from the electronics and data communication sector. Five IPOs were Catalist listings, from sectors such as healthcare, food and beverages, consumer publishing, automotive, and oil and gas services.

In 2022, there have been nine IPOs in Singapore as at the end of May 2022, which raised approximately S$570 million. The three Mainboard listings comprised the SGX-ST's first special purpose acquisition company (SPAC) listings. The other six IPOs were Catalist listings, from sectors such as renewable energy, waste management, building and construction, environmental services, technology and logistics.

Governing rules

i Main stock exchanges

An issuer can opt to list on the Mainboard or Catalist of the SGX-ST. The Mainboard caters to the needs of more established issuers, with higher entry and listing requirements (such as minimum profit and market capitalisation levels). A Mainboard listing can be a primary or secondary listing.

Catalist caters to the needs of smaller or fast-growing issuers. It has a different model, where approved sponsors assess whether an issuer is suitable for listing. A Catalist listing must be a primary listing, and there are no minimum quantitative entry criteria.

Securities that can be listed on the SGX-ST include shares of a company and, in the case of Mainboard listings, units of a business trust (BT), shares and units of an investment fund, units of a REIT and, more recently, shares and units of a SPAC.

REITs and BTs account for the majority of IPO funds raised over the past six years. Since 2015, IPOs of REITs and BTs on the SGX-ST raised a total of approximately S$11.8 billion in gross proceeds. As at 31 May 2022, there were 48 REITs and BTs listed on the SGX-ST.

ii Overview of listing requirements

The general listing requirements for an issuer to list on the Mainboard or Catalist are set out below.

Issue manager or sponsor

An issuer seeking a Mainboard listing must appoint an accredited issue manager, and an issuer seeking a Catalist listing must appoint an approved full sponsor, who is responsible for preparing the issuer for listing.

Quantitative requirementsMainboard

An issuer seeking a Mainboard listing must satisfy either one of the profit tests or the market capitalisation test.

To satisfy the profit tests, the issuer must either:

  1. have a minimum consolidated pre-tax profit (based on full-year consolidated audited accounts) of at least S$30 million for the latest financial year and an operating track record of at least three years; or
  2. be profitable in the latest financial year (pre-tax profit based on the latest full-year consolidated audited accounts), have an operating track record of at least three years and a market capitalisation of not less than S$150 million based on the issue price and post-invitation issued share capital.

Under the profit tests, the issuer must also have been engaged in substantially the same business, and have been under substantially the same management, throughout the three-year operating track record period.

To satisfy the market capitalisation test, the issuer must have an operating revenue (actual or pro forma) in the latest completed financial year and a market capitalisation of not less than S$300 million based on the issue price and post-invitation issued share capital. REITs and BTs that meet the S$300 million market capitalisation test but do not have historical financial information can apply under this test if they can demonstrate that they will generate operating revenue immediately upon listing.

In addition, the issuer and its subsidiaries (the Group) must be in a healthy financial position having regard to whether the Group has a positive cash flow from operating activities.

Catalist

An issuer seeking a Catalist listing is not required to satisfy any minimum operating track record, profit or share capital requirement. Instead, an approved full sponsor must be appointed who is responsible for assessing whether the issuer is suitable to be listed on Catalist and who will for at least three years after listing continue to supervise the issuer's compliance with the continuing listing requirements under the listing rules applicable to Catalist listings (the Catalist Listing Rules). When the sponsor ceases to act as such, the issuer must appoint a new sponsor.

Shareholding spread and distribution requirementsMainboard

For a Mainboard listing, at the time of listing, a minimum of 12 to 25 per cent of the issuer's shares or units must be in public hands (i.e., persons other than the directors; chief executive officer; substantial or controlling shareholders; unitholders of the issuer or its subsidiaries; or their respective associates), depending on the market capitalisation of the issuer. In addition, issuers are required to have a minimum of 500 shareholders or unitholders on listing.

Market capitalisationPost-listing share capital in public hands
Less than S$300 million25 per cent
S$300 million or more but less than S$400 million20 per cent
S$400 million or more but less than S$1 billion15 per cent
S$1 billion or more12 per cent

The listing rules applicable to Mainboard listings (the Mainboard Listing Rules) also prescribe the following distribution requirements.

Offer sizeDistribution
Less than S$75 millionAt least 40 per cent or S$15 million in value of the shares or units offered under the IPO (whichever is lower) must be distributed to investors, each allotted not more than 0.8 per cent or S$300,000 in value of the shares or units offered under the IPO, whichever is lower.
S$75 million or more but less than S$120 millionAt least 20 per cent of the shares or units offered under the IPO must be distributed to investors, each allocated not more than 0.4 per cent of the shares or units offered under the IPO.
S$120 million or moreNo requirement.

See 'Listing framework for SPACs' below for the shareholding spread and distribution requirements applicable to a SPAC listing.

Catalist

For a Catalist listing, at least 15 per cent of the post-IPO issued share capital of the applicant must be held by the public at the time of listing, and there must be at least 200 public shareholders. There are no quantitative distribution requirements.

Minimum IPO price and subscription

The minimum IPO price of shares or units listed on the Mainboard or Catalist is 50 or 20 cents per share or unit, respectively. The standard board lot size of shares or units listed on the SGX-ST is 100. Accordingly, the subscription and allocation value of shares or units at IPO on the Mainboard or Catalist for each investor must be at least S$500 or S$200, respectively, and must be based on an integral multiple of a board lot.

See 'Listing framework for SPACs' below for the minimum IPO price applicable to a SPAC listing.

iii Overview of law and regulationsThe SGX-ST and the Listing Rules

The requirements for a company seeking a listing on the SGX-ST are set out in the Mainboard Listing Rules or the Catalist Listing Rules (together, the Listing Rules). The SGX-ST interprets, administers and enforces the Listing Rules and reviews applications for admission to its official list. The SGX-ST will consider whether a listing application satisfies the listing requirements set out in the Listing Rules and will decide whether to issue an eligibility-to-list (ETL) letter, with or without conditions.

The Monetary Authority of Singapore and the Securities and Futures Act

An issuer seeking listing on the SGX-ST will normally do so in conjunction with an IPO of its shares or units.

The offering of shares of a company or units of a BT is primarily regulated by the Securities and Futures Act 2001 (SFA) and the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 made thereunder.

The offering of units of a REIT is primarily regulated by the SFA and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 made thereunder.

The Monetary Authority of Singapore (MAS) administers the SFA and subsidiary legislation thereunder, and is the primary regulatory authority in connection with the offering of shares or units in Singapore.

DCS structure

A company may be listed on the Mainboard by way of a primary listing with a dual-class share (DCS) structure if it can establish that it is suitable for listing with a DCS structure. Companies with DCS structures that are to be listed on the Mainboard are subject to various requirements under the Mainboard Listing Rules, including safeguards against entrenchment and expropriation risks, to help protect the interests of minority shareholders. The SGX-ST will undertake a holistic assessment of the suitability for listing of an issuer with a DCS structure.

Listing framework for SPACs

With effect from September 2021, the Mainboard Listing Rules permit the listing on the Mainboard of SPACs, being a company with no prior operating history, operating and revenue-generating business or assets at the point of the IPO, and which raises proceeds for the sole purpose of undertaking a business combination in accordance with the business strategy and acquisition mandate disclosed in the prospectus issued in relation to the SPAC's IPO. An issuer that intends to list as a SPAC must be suitable for listing, must comply with various requirements under the Mainboard Listing Rules and is not permitted to adopt a DCS structure at IPO. In assessing the suitability of the SPAC, the SGX-ST may take into account any factor it considers relevant, including, but not limited to, the factors set out in the Mainboard Listing Rules.

A SPAC listing on the SGX-ST is required to have the following key features:

  1. minimum market capitalisation of S$150 million;
  2. issue price of the IPO securities, which may consist of a share and warrant (or other convertible securities), must be at least S$5 each;
  3. the de-SPAC must take place within 24 months of IPO, with an extension of up to 12 months subject to the fulfilment of prescribed conditions;
  4. sponsors must subscribe to a minimum of between 2.5 per cent to 3.5 per cent of the IPO shares, units or warrants, depending on the market capitalisation of the SPAC;
  5. the de-SPAC can proceed if more than 50 per cent of independent directors approve the transaction and more than 50 per cent of shareholders vote in support of the transaction;
  6. warrants issued to shareholders will be detachable and maximum percentage dilution to shareholders arising from the conversion of warrants issued at IPO is capped at 50 per cent;
  7. all independent shareholders are entitled to redemption rights;
  8. sponsor's promote limit of up to 20 per cent of issued share capital at IPO; and
  9. at least 25 per cent of the total number of issued shares must be held by at least 300 public shareholders on listing.

At the time of de-SPAC, the resulting issuer, pursuant to the completion of the business combination, must also satisfy the admission requirements under the Mainboard Listing Rules.