1.1 This Practice Note provides information on the role of SGX Surveillance ("Surveillance") and the procedures normally employed when an issuer is queried regarding trading in its securities.

2.1 As set out under Paragraph 18 of Appendix 7.1, unusual trading activity in an issuer's securities, without it being apparent that publicly available information could account for the activity, may signify trading by persons who are acting on unannounced material information or on a rumour or report, whether true or false.

2.2 The unusual market activity may not be traceable directly to unannounced information or to a rumour or report. Nevertheless, the market activity itself may be misleading to investors, who may assume that a sudden and appreciable change in the price of, or volume traded in, the issuer's securities reflects a corresponding change in its business or prospects.

3.1 Surveillance utilizes a real-time market surveillance system which employs the latest technology to automatically alert the Surveillance officers to market behaviour such as unusual price and volume movements of an issuer's securities. The Surveillance officer then examines whether public information, company specific news, counter-specific trends, industry trends, economic factors or prevailing market sentiment, can explain the market activity. If no explanation is apparent, the Exchange requires the issuer to inform the public whether it is aware of any material information that might reasonably be expected to have a significant effect on the trading volume or price of its securities.

3.2 Surveillance will issue a query, depending on the extent of the unusual trading activity, measured against pre-determined thresholds set by the Exchange from time to time.

3.3 Query by Surveillance

4.1 An issuer is expected to respond to a query as soon as possible. Issuers should, therefore, ensure that they are operationally ready to respond promptly. In view of the importance of maintaining a fair and efficient market, issuers must, upon receiving a query from the Exchange, immediately undertake an enquiry to ascertain the cause of the unusual trading activity. Issuers should have in place, procedures to ensure that the enquiry or information gathering is carried out efficiently, systematically and promptly, so that the issuer is able to disseminate all material information as soon as possible.

4.2 Paragraph 20 of Appendix 7.1 sets out some possible causes for unusual trading and how issuers should respond to the queries based on different causes.

4.3 An issuer may wish to, where appropriate, request for suspension of trading in its securities or a trading halt. If so, the issuer should contact Securities Market Control and provide a SGXNET announcement requesting for suspension or a trading halt, stating the reason for the suspension or trading halt. Where possible, it would be useful for issuers to inform investors when the issuer can respond to the Exchange's query and when the suspension of its securities or trading halt is expected to be lifted.

4.4 The person providing the reply to the Exchange must be authorised by the Board to do so. The directors of the issuer must collectively and individually take responsibility for the accuracy of the replies provided to the Exchange with regards to the query raised by Surveillance.

5.1 Issuers with a secondary listing on the Exchange and issuers that are exempted from the continuing listing obligations under Chapter 7 must comply with the home exchanges' disclosure requirements. Nevertheless, as the securities of such issuers are being traded on the Exchange, the Exchange must ensure that there is a fair and orderly market in these securities. Issuers may therefore be required to respond to queries regarding the trading of their securities on the Exchange.

6.1 Unusual trading activity could indicate possible leakage of material, price sensitive information. To facilitate closer monitoring of trading activities, where the Board of an issuer is:

6.2 Where the discussions or negotiations are carried out by a controlling shareholder of the issuer and without the knowledge of the issuer, that controlling shareholder shall (through their advisers or otherwise) notify the Exchange directly if the discussions or negotiations are likely to result in the above transactions.

6.3 The Exchange requires the notifications to be provided using the prescribed formatprescribed format. Each notification shall cover the following:

6.4 The issuer and/or the controlling shareholder shall notify the Exchange if such discussions or negotiations cease.

6.5 The issuer and/or the controlling shareholder shall concurrently commence the maintenance of a list of persons privy to the transaction ("privy list") in the prescribed formatprescribed format.

6.6. The Exchange reserves the right to request for the submission of a privy list as and when it deems necessary.

6.7. The privy list and notifications to the Exchange under paragraph 6.1 and 6.2 be emailed to privylist@sgx.com and will be kept confidential.

7.1 This Practice Note sets out the normal procedures which Surveillance undertakes when querying issuers on unusual trading activities. However, there may be instances when a different approach is warranted.

7.2 Issuers should also familiarize themselves with the Exchange's Continuing Obligations, Corporate Disclosure Policy and any other relevant Practice Notes.

7.3 Issuers may consult their account manager in Issuer Regulation if they have queries on this matter.