Rulebooks: Contents

Rulebooks
Mainboard Rules
Catalist Rules
Definitions and Interpretation
Chapter 1 Introduction
Chapter 2 Sponsors
Chapter 3 Disciplinary and Appeals Procedures, and Enforcement Powers of the Exchange
Chapter 4 Equity Securities
Chapter 5 Reserved
Chapter 6 Reserved
Chapter 7 Continuing Obligation
Chapter 8 Changes in Capital
Chapter 9 Interested Person Transactions
Chapter 10 Acquisitions and Realisations
Chapter 11 Takeovers
Chapter 12 Circulars, Annual Reports and Electronic Communications
Chapter 13 Trading Halt, Suspension and Delisting
Chapter 14 Transition Rules
Appendices
Practice Notes
Code of Corporate Governance 2012
Code of Corporate Governance 2018
SGX-ST Rules
CDP Clearing Rules
CDP Settlement Rules
DVP Rules [Entire Rulebook has been deleted]
CDP Depository Rules
Futures Trading Rules
SGX-DC Clearing Rules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Archive
Rule Amendments

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  • Part V Rights and Obligations of Sponsors and Registered Professionals

    • 223

      A sponsor is authorised to undertake the following activities:

      (1) full sponsor: introducing activities and continuing activities;
      (2) continuing sponsor: continuing activities.

    • 224

      A sponsor must comply with the following general obligations:

      (1) Maintain eligibility, including the following:
      (a) ensure that it continues to fulfil the eligibility criteria in Rules 204 or 205, and such conditions imposed by the Exchange;
      (b) notify the Exchange immediately if it ceases to fulfil any of the eligibility criteria or conditions imposed by the Exchange, or has reason to believe that it will cease to do so; and
      (c) keep up to date with the requirements of the Rules and the law, and professional standards relevant to the fulfilment of its responsibilities, including a sound understanding of the legal and regulatory framework for the Singapore corporate finance market and Catalist in particular.
      (2) Liaise with the Exchange on matters which should be brought to its attention, including the following:
      (a) appoint a sufficiently senior registered professional (and an alternate) to liaise with the Exchange on matters concerning the sponsor's responsibilities. The sponsor must provide the Exchange with the contact details of such liaison persons and inform the Exchange immediately of any change to the details;
      (b) notify the Exchange when it accepts sponsorship of an issuer, in the form contained in Appendix 2C;

      Refer to Appendix 2C — Change of Sponsor Confirmation.
      (c) notify the Exchange when an issuer refuses to heed its advice on matters which may involve or lead to a breach of the Rules;
      (d) notify the Exchange when it forms the opinion that the trading of the issuer's securities should be halted or suspended, or that the issuer should be delisted;
      (e) provide any information required by the Exchange as soon as practicable, ensuring reasonably, that such information is correct, complete and not misleading. If subsequently it reasonably believes that the information provided does not meet this standard, notify the Exchange as soon as practicable, and correct the information;
      (f) seek the Exchange's advice if it is unsure about the application or interpretation of the Rules or if a situation may adversely affect the reputation of the Exchange or integrity of the market. The Exchange will generally not accept enquiries from a sponsor on an anonymous basis;
      (g) notify the Exchange promptly on employing a new registered professional;
      (h) notify the Exchange if a registered professional leaves its employment. If possible, the Sponsor must give at least one month's notice; and
      (i) notify the Exchange if any change in its board of directors or auditors occurs or is proposed.
      (3) Have adequate systems and resources to discharge its obligations under the Rules, including the following:
      (a) sufficient number of registered professionals, including ensuring that any employee:
      (i) whose experience falls within any of the categories in Rule 204(7) or Rule 205(7); and
      (ii) who undertakes sponsor activities,
      applies for registration as a registered professional;
      (b) adequate systems and processes to ensure that registered professionals continue to meet the criteria for registration and any conditions or restrictions imposed by the Exchange, at all times;
      (c) sufficient and appropriately qualified and experienced corporate finance, compliance and other employees, having regard to Practice Note 2A paragraph 6;
      (d) appropriate internal processes and operating procedures, including those required for the supervision of employees and the quality of their work;
      (e) adequate and up-to-date documentation, including its compliance, policy and procedural manuals, to support its work processes and supervision of employees;
      (f) record-keeping that ensures records pertaining to its business are kept for at least 6 years, including a complete audit trail of key discussions, advice and decision-making processes in relation to listing applicants and issuers and the basis for the advice and decisions; and
      (g) controls, procedures and other safeguards to maintain its independence and avoid conflicts of interest, including complying with the requirements set out in Appendix 2D.

      Refer to Appendix 2D — Sponsor Independence.

      Refer to Practice Note 2A — Eligibility Criteria for Sponsors.
      (4) Act properly at all times in dealings with listing applicants or issuers, including the following:
      (a) use due care and skill;
      (b) maintain regular contact with listing applicants and issuers;
      (c) seek assistance of other appropriately qualified and suitable professionals as needed, while retaining overall management and responsibility for the activity;
      (d) be independent of the listing applicant or issuer and avoid conflicts of interest, including complying with the requirements set out in Appendix 2D; and

      Refer to Appendix 2D — Sponsor Independence.
      (e) only accept sponsorship of listing applicants and issuers that allow the sponsor to discharge its obligations under the Rules.
      (5) Be responsible for the acts and omissions of its directors, officers, registered professionals, employees and agents.
      (6) Comply with the Rules and notify the Exchange when it fails to do so, or when it becomes aware that it is likely to fail to do so.
      (7) Ensure that communications with the Exchange are kept confidential, except as required to be disclosed:
      (a) to the listing applicant or issuer;
      (b) to the sponsor's employees, advisers, consultants or agents on a need-to-know basis;
      (c) by the Authority; or
      (d) by any law.

    • 225

      (1) A full sponsor, in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, must be satisfied that, having made reasonable due diligence enquiries and having considered all relevant matters, the listing applicant, or in the case of a very substantial acquisition or reverse takeover, the enlarged group, is suitable to be listed. This includes doing each of the following, having regard to the guidance in Practice Notes 2B and 4A:
      (a) achieve a thorough understanding of the listing applicant or enlarged group and its business, including recent major developments relating to it, and gain an understanding of the industry it operates in;
      (b) investigate and consider the suitability of each executive officer, director and the board as a whole in relation to the listing applicant's or enlarged group's needs;
      (c) conduct the due diligence process for the offer document or shareholders' circular, including at a minimum, complying with the SIBA Due Diligence Guidelines where applicable or such other satisfactory and no less strict due diligence guidelines or processes;
      (d) oversee, and be actively involved in, the preparation of the offer document or shareholders' circular and ensure compliance with any rule requirements or legal requirements;
      (e) satisfy itself that the listing applicant or enlarged group has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the securities of the issuer remain listed on Catalist;
      (f) consider and advise on the suitability and competence of other professionals and consultants involved in the admission, very substantial acquisition or reverse takeover process;
      (g) undertake independent verification directly or by a reputable agent, of the listing applicant or enlarged group, its management and controlling shareholders, including:
      (i) key persons' personal and business backgrounds and integrity, role in the listing applicant's or enlarged group's business, interests in other companies, and any criminal or other records or links to money laundering or organized crime; and
      (ii) the listing applicant's or enlarged group's history, structure, accounts, business reputation and development, its related companies, its other businesses, and the influence of key persons; and
      (h) ensure that its declaration regarding the listing applicant or the enlarged group (Appendix 4B) is submitted to the Exchange.
      (i) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must ensure that it will obtain appropriate technical expertise relevant to the business and products of the listing applicant or enlarged group to enable it to properly discharge its obligations as a sponsor. Such expertise can be from a third-party expert or an internal resource of equivalent standards within the full sponsor, but must be independent of, and have no conflict of interests with, the listing applicant; and
      (j) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must:
      (i) submit a confirmation to the Exchange that after conducting due diligence, the Sponsor is not aware of any matter that has caused it to believe that the listing applicant:
      (a) has not obtained all material licences, permits or certificates necessary to conduct its operations from the relevant government bodies in the jurisdictions where the Group operates;
      (b) is not in compliance with all the relevant laws, rules and regulations in all jurisdictions in which the Group operates, including but not limited to, the proper incorporation and good standing of any incorporated subsidiary or interest, except where such non-compliance is not material to the Group's business operations; and
      (c) does not possess title to or validity and enforceability of the rights to any assets (including licences and agreements) as is appropriate to the listing applicant or the Group, except where such lack of, or defect in, such title or rights is not material to the Group's business operations.

      The Sponsor should consider and advise on the suitability of the legal adviser involved in providing the legal opinion. In relying on the opinion from a legal adviser in providing the confirmation to the Exchange, the Sponsor should make due enquiries including:
      (a) assessing the suitability of the legal adviser having regard to whether the legal adviser has the relevant experience and is authorized to practice and advise in the relevant jurisdiction; and
      (b) reviewing the terms and scope of engagement.
      (ii) be satisfied that the qualified person producing the qualified person's report required under Rule 441 has the relevant and appropriate qualifications, experience and technical knowledge to professionally and independently appraise the assets and liabilities being reported upon;
      (iii) be satisfied that the scope of the qualified person's report required under Rule 441 is appropriate with regards to the listing applicant's or enlarged group's assets and liabilities; and
      (iv) be satisfied that the work performed by the qualified person is in accordance with the relevant Standard
      (2) When asked by the Exchange, demonstrate that it has complied with Practice Note 2B or how it has met the objectives in that Practice Note in another way.
      (3) A full sponsor conducting introducing activities for an issuer must act as the continuing sponsor for the issuer for at least 3 years after admission of the issuer or the enlarged group. If the sponsor intends to end the sponsorship within 3 years of the issuer's listing, it must obtain the Exchange's approval. The Exchange may, in exceptional circumstances, give such approval.

      Refer to Practice Note 2B — Guidelines for Preparing a Listing Applicant for Admission or Advising an Issuer in a Very Substantial Acquisition or Reverse Takeover.

      Amended on 1 February 2011, 27 September 2013 and 23 August 2018.

    • 226

      (1) A sponsor taking on sponsorship of an existing issuer must comply with the following obligations:
      (a) achieve a thorough understanding of the issuer and its business, including recent major developments relating to it, and gain an understanding of the industry it operates in, having regard to the guidance in paragraph 2 of Practice Note 2B where applicable;
      (b) investigate and consider the suitability of each director and proposed director of the issuer and consider the efficacy of the board as a whole for the company's needs, having regard to the guidance in paragraph 3 of Practice Note 2B where applicable; and
      (c) satisfy itself that the issuer has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the issuer is listed on the Exchange, having regard to the guidance in paragraph 6 of Practice Note 2B.

      Refer to Practice Note 2B — Guidelines for Preparing a Listing Applicant for Admission or Advising an Issuer in a Very Substantial Acquisition or Reverse Takeover.
      (2) A sponsor, in undertaking continuing activities for an issuer, must comply with the following obligations, having regard to the guidance in Practice Note 2C, where applicable:
      (a) maintain regular contact with its issuer, including being available to advise on:
      (i) all Rule matters; and
      (ii) corporate governance matters (including board governance matters) or arrange for an appropriate adviser to do so;
      (b) review all documents to be released by the issuer to shareholders or to the market (including announcements, resolutions contained in notices of meetings, circulars and corporate actions) before release, to ensure that the issuer is in compliance with the Rules and makes proper disclosure. The document must display prominently the following on the front cover:

      This document has been reviewed by the Company's sponsor, [full name of sponsor]. It has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.

      The contact person for the sponsor is [full name], [contact details].
      (c) monitor the trading of the listed securities of its issuer and seek and review reasons for any unusual fluctuations in the price and volume of the listed securities;
      (d) advise its issuer on the suitability of directors arising from proposed changes in the issuer's board of directors;
      (e) advise its issuer on the appointment of a suitable accounting firm to meet the issuer's audit obligations; and
      (f) advise its issuer if the trading of the issuer's securities should be halted or suspended.

      Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
      (3) When asked by the Exchange, demonstrate that it has complied with Practice Note 2C or how it has met the objectives in the Practice Note in another way.

      Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
      (4) A sponsor undertaking continuing activities for an issuer that is executing a corporate action must be satisfied, having made reasonable due diligence enquiries (including, at a minimum, complying with the SIBA Due Diligence Guidelines where applicable or such other satisfactory and no less strict due diligence guidelines or processes) and having considered all relevant matters, of the following:
      (a) the suitability and competence of other professionals and consultants involved in the corporate action;
      (b) compliance with any rule requirements or legal requirements; and
      (c) that any difference in effect of the corporate action on minority shareholders compared to other shareholders, is clearly disclosed.
      (5) A sponsor taking on sponsorship of, or undertaking continuing activities for, an existing issuer which is a mineral, oil and gas company must comply with the following obligations:
      (a) ensure that it will obtain appropriate technical expertise relevant to the business and products of the issuer as necessary to enable it to properly discharge its obligations as a sponsor. Such expertise can be from a third-party expert or an internal resource of equivalent standards within the sponsor, but must be independent of, and have no conflict of interest with the issuer;
      (b) maintain access to such technical expertise for as long as it remains as the sponsor for such issuer; and
      (c) disclose in the relevant announcement, document or circular, whether it had relied on such technical expertise in the discharge of its obligations as a sponsor and if so, whether such expertise is from a third-party expert or an internal resource within the sponsor.

      Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.

      Amended on 1 February 2011 and 23 August 2018.

    • 227

      When making an assessment of whether a sponsor has complied with its obligations in Rules 224, 225 and 226, the Exchange will take into account any Rules, procedures or guidelines set out in supplementary documentation issued by the Exchange.

    • 228

      If a sponsor or an issuer intends to end the sponsorship, the out-going sponsor must do the following:

      (1) Notify the Exchange as follows:
      (a) if the sponsor is ending the sponsorship, it must give no less than 3 months' notice; or
      (b) if the issuer is ending the sponsorship, the sponsor must inform the Exchange as soon as the issuer has indicated its intention to end the sponsorship.
      The notification must include the reasons for ending the sponsorship.
      (2) Continue its sponsorship of the issuer during the notice period, unless a new sponsor agrees to take over before the expiry of the period.
      (3) Be available to discuss in a constructive and forthcoming manner with a new sponsor, its experiences with the issuer and the reasons for ending the sponsorship.
      (4) Provide any documents or information that the Exchange requires.
      (5) Provide to the issuer, in a form suitable for release to the market, confirmation that it is not aware of any non-compliance with the Rules by the issuer that has not been brought to the attention of the new sponsor, or if there is no new sponsor, the Exchange. The issuer must release the confirmation via SGXNET.

      Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.

    • 229

      A registered professional must comply with the following obligations:

      (1) Maintain eligibility, including the following:
      (a) ensure that he continues to fulfil the eligibility criteria in Rule 212, and such conditions imposed by the Exchange;
      (b) notify the Exchange immediately if he ceases to fulfil any of the eligibility criteria or conditions imposed by the Exchange, or has reason to believe that he will cease to do so; and
      (2) Exercise skill, care and diligence and comply with the applicable Rules when carrying out the duties and obligations of the sponsor.