1.1 The watch-list seeks to heighten transparency of an issuer's financial and share price performance. The 2 main purposes of the watch-list are to:

1.2 The inclusion criteria for the watch-list are categorized as follow:

1.3 This Practice Note sets out the guidelines for inclusion of issuers on the watch-list and removal of issuers from the watch-list.

2.1 Rule 1311 states that an issuer will be placed on the watch-list under either of the following:

2.2 The Exchange will conduct half-yearly reviews to identify issuers to be included on the watch-list. The half-yearly review will take place on the first market day of June 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.

2.3 The table below shows how the inclusion criteria are applied at each of the review dates.

2.4 VWAP is computed based on total value of securities traded for the 6 months under review divided by the total volume traded for the 6 months adjusted for any corporate actions. This formula applies regardless of the number of trading days during the 6-month review period (i.e. where the securities are thinly traded or trading is halted / suspended for a period of time).

2.5 The 6-month VWAP of the issuers are made available on the Exchange's website. Daily updated market capitalisation figures are also made available on the Exchange's website. Audited financial results of issuers can be found in annual reports which are available on the Exchange's website.

2.6 Issuers are expected to take proactive steps to exit the watch-list. Issuers seeking to exit the watch-list via a share consolidation exercise should consolidate its shares to achieve a theoretical share price of at least S$0.25 to cater for price fluctuations.

2.7 For issuers who are traded in dual currencies on SGX-ST, the issuer will be placed on the watch-list based on the MTP Entry Criteria only if the VWAP is less than S$0.20 over the last 6 months for both counters. For issuers who are not quoted in Singapore dollars, the conversion will be based on the Reuters exchange rate as of the market day preceding the review date.

2.8 For issuers with dual primary listing, only the trades conducted for its listing on SGX-ST will be taken into account for calculating the 6-month VWAP.

3.1 An issuer which enters into the watch-list based on the Financial Entry Criteria will be removed if it meets the Financial Exit Criteria. Likewise, an issuer placed under the MTP Entry Criteria of the watch-list will be removed based on the MTP Exit Criteria. An issuer which entered into the watch-list based on the Financial Entry Criteria cannot exit from the watch-list by a transfer to Catalist. An issuer which entered into the watch-list based only on the MTP Entry Criteria can exit from the watch-list by a transfer to Catalist.

3.2 If the issuer is placed on the watch-list based on the Financial Entry Criteria, it will have to submit an application to the Exchange within the cure period for removal from the watch-list.

3.3 Review for removal from watch-list based on MTP Exit Criteria takes place on a half-yearly basis on the review dates (i.e. first market day of June and December of each year). The issuer is not required to apply for removal. The Exchange will notify the issuer of the removal from the watch-list. Issuers are required to announce the removal via SGXNET upon receipt of the notification.

3.4 Issuers placed on the watch-list under the MTP Entry Criteria may apply, on the first market day of March and September each year, to the Exchange for a review of their eligibility to exit the watch-list under the MTP Exit Criteria. This may include actions taken by the issuer which have enabled it to comply with the MTP Exit Criteria. If the application is approved by the Exchange, the issuer must immediately announce the effective date of its exit from the watch-list under the MTP Exit Criteria and the conditions imposed by the Exchange, if any, upon which the approval is granted. The Exchange will consider each application on its merits, taking into account the circumstances of each case.

4.1 Pursuant to Rule 1315, if the issuer fails to comply with the relevant exit criteria within the 36-month cure period, 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.

4.2 An issuer may apply to the Exchange for an extension to the 36-month cure period and the Exchange may, if the circumstances warrant it, grant an extension:

4.3 An issuer's application to extend the cure period for meeting the MTP Exit Criteria must be made in blocks of 6 months so that it will correspond with subsequent review dates.

4.4 Any application for extension of time must be submitted to the Exchange at least 1 month before expiry of the cure period.

4.5 The Exchange may reject an application for exit from the watch-list if the Exchange is of the opinion that there are other factors that justify the continued inclusion of the issuer in the watch-list.

5.1 The illustrations below, though not exhaustive, seek to provide issuers with guidance on how the Exchange administers the watch-list.

Illustration 1
Where an issuer's shares are not traded for a single day during the 6-month review period, review of the issuer's 6-month VWAP for entry into the watch-list will be deferred till the next half-yearly review where trades are available. The deferment also applies where an issuer with 3 consecutive years' losses, resumes trading for less than 6 months after prolonged suspension (i.e. the issuer has been suspended for more than 6 months)

Illustration 2
Where an issuer's shares are traded for less than 6 months, review of the issuer for entry into the watch-list based on the MTP Entry Criteria will be based on the trades done over the 6-month period. For example, if the issuer has only 2 months of trades over the 6-month review period, it will be reviewed based on the 2 months of trades over the 6-month period.

Illustration 3
An issuer can trigger both the Financial Entry Criteria and the MTP Entry Criteria concurrently. The issuer must comply with the respective exit criteria in order to exit from the watch-list. An issuer can be in a situation where it satisfies the Financial Exit Criteria but does not satisfy the MTP Exit Criteria (and vice versa). In this regard, it will continue to remain on the watch-list.

Illustration 4
An issuer can trigger the Financial Entry Criteria and the MTP Entry Criteria at different times. An issuer's compliance with the Financial Exit Criteria and the MTP Exit Criteria is assessed independently. Accordingly, the cure period for satisfying the Financial Exit Criteria and the MTP Exit Criteria will be applied separately.

For example, an issuer is placed on the watch-list after triggering the Financial Entry Criteria on 1 June 2016. At the review 12 months later on 1 June 2017, it also triggers the MTP Entry Criteria.

6.1 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).

6.2 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.