Practice Note 13.2 Watch-List
Issue date: 6 December 2007
Effective date: 1 March 2007
Chapter 13 Part V
Please contact Issuer Regulation Department:—
6236-8872 Richard Teng
6236-8887 June Sim
6236-8895 Siew Wun Mui
6236-8264 Lorraine Chay
6236-8880 Tang Yeng Yuen
6236-8892 Ashley Seow
1.1 This Practice Note sets out the guidelines for inclusion of issuers on the watch-list.
2. Quarterly Reviews
2.1 The Exchange will conduct quarterly reviews to identify issuers to be included on the watch-list. The quarterly review will take place on the first market day of March, June, September and December of each year. Upon identifying an issuer for inclusion on the watch-list, the Exchange will promptly notify the issuer of its status.
3. Extension to the 24-Month Period
3.1 Pursuant to Rule 1315, if the issuer fails to submit an application for removal from the watch-list within 24 months of the date on which it was placed on the watch-list, the Exchange may either remove the issuer from the Official List, or suspend trading of the listed securities of the issuer (without the agreement of the issuer) with a view to removing the issuer from the Official List.
3.2 An issuer may apply to the Exchange for an extension to the 24-month period and the Exchange may, if the circumstances warrant it, grant an extension:
(1) of up to 12 months if the issuer satisfies at least one of the requirements under Rule 1314(1) and has achieved healthy cash flow from its operating activities (based on its latest consolidated audited financial statements);
(2) of up to 3 months if the issuer has entered into a legally binding agreement to acquire asset(s) that enable the enlarged group to comply with the requirements in Rule 210(2)(a) or (b) and the transaction is expected to be completed within 3 months; or
(3) if trading of its securities was suspended pursuant to Rule 1303(3) during a period preceding the end of the 24-month period. The period of extension granted by the Exchange, if any, shall not exceed that which is required to compute the issuer's average daily market capitalisation over a period of 120 market days on which trading is not suspended or halted. (Trading is deemed to be suspended or halted if trading is ceased for a full market day.)
4. Cash Companies and Companies Suspended Pursuant to Rule 1303(3)
4.1 For avoidance of doubt, an issuer that has been suspended pursuant to Rule 1303(2) or 1303(3) or has been allowed to trade pursuant to the requirements of Rule 1018(1) will not be included on the watch-list and will not be required to provide the notification pursuant to Rule 1312. Rules 1311 will be applicable from the date the issuer satisfies the requirements of Rules 1304 or 1018(2).
4.2 Where an issuer has been placed on a watch-list pursuant to Rule 1311 and is subsequently suspended under Rules 1303(2) or 1303(3) or is allowed to trade subject to the requirements of Rule 1018(1), it will remain on the watch-list.
(1) For the purposes of Rule 1314(1), the average daily market capitalisation will be computed based on the period commencing from the date the issuer satisfies the requirements of Rule 1304.
(2) The Exchange will remove the issuer from the Official List:
(a) at the end of the 24-month period which commences from the time it was placed on the watch-list (subject to any extension granted); or