Practice Note 1.1 Use of Discretionary Authority
Cross-referenced from Rule 103
1.1 This Practice Note provides a non-exclusive description of the circumstances in which Rule 103 is generally invoked. While the Exchange may deny initial or continued listing to an issuer if it is of the opinion that the listing is not in the public interest, this authority will only be exercised in exceptional circumstances, such as where the integrity of the market may be adversely affected or for the protection of investors.
1.2 The Exchange may use its authority under Rule 103 to deny initial or continued listing to an issuer when an individual with a history of regulatory misconduct is associated with the issuer. Such individuals are typically a director, executive officer, substantial shareholder, or consultant to the issuer. In making this determination, the Exchange will consider a variety of factors, including:
(a) the nature and severity of the conduct, taken in conjunction with the length of time since the conduct occurred;
(b) whether the conduct involved fraud or dishonesty;
(c) whether the conduct was securities-related;
(d) whether the investing public was involved;
(e) how the individual has been employed since the violative conduct;
(f) whether there are continuing sanctions (either criminal or civil) against the individual;
(g) whether the individual made restitution;
(h) whether the issuer has taken effective remedial action; and
(i) the totality of the individual's relationship to the issuer, giving consideration to:
(i) the individual's current or proposed position;
(ii) the individual's current or proposed scope of authority;
(iii) the extent to which the individual has responsibility for financial accounting or reporting; and
(iv) the individual's equity interest.
1.3 Based on this review, the Exchange may determine that the regulatory history rises to the level of a public interest concern, but may also consider whether remedial measures proposed by the issuer, if taken, would allay that concern. Examples of such remedial measures could include any or all of the following, as appropriate:
(a) the individual's resignation from director and executive officer positions, and/or other employment with the issuer;
(b) divestiture of shareholdings;
(c) terminations of contractual arrangements between the issuer and the individual; or
(d) the establishment of a voting trust surrounding the individual's shares.
1.4 An example of a public interest concern is if the issuer group, or any of their directors or executive officers are sanctioned subjects identified on global sanction lists. Such global sanctions lists may be imposed or established by jurisdictions or governmental, global or regional bodies such as the Office of Foreign Assets Control of the U.S. Department of the Treasury, Singapore, the European Union and the United Nations Security Council. The Exchange is willing to discuss with issuers, on a case-by-case basis, what remedial measures may be appropriate to address public interest concerns, and for how long such remedial measures would be required. Alternatively, the Exchange may conclude that a public interest concern is so serious that no remedial measure would be sufficient to alleviate it.
1.5 The Exchange may also use its discretionary authority, for example, when an issuer files for protection under any provision of insolvency laws, when an issuer’s independent auditors issue a disclaimer opinion on financial statements required to be audited, or when financial statements do not contain a required certification.
1.6 In addition, pursuant to its discretionary authority, the Exchange will review the issuer's past corporate governance activities. This review may include activities taking place while the issuer is listed on the Exchange or an exchange that imposes corporate governance requirements, as well as activities taking place after a formerly listed issuer is no longer listed on the Exchange or such an exchange. Based on such review, the Exchange may take any appropriate action, including placing restrictions on or additional requirements for listing, or denying listing of a security, if the Exchange determines that there have been violations or evasions of such corporate governance standards. Such determinations will be made on a case-by-case basis as necessary to protect investors and the public interest.
1.7 In determining whether to initially list an issuer or continue an issuer's listing when it changes its business activities, the Exchange does not make subjective or value judgements about the business the issuer operates. However, the Exchange cannot initially list or continue the listing of an issuer whose current or planned activities are in violation of Singapore law or the law in a jurisdiction where the issuer operates.
Practice Note 2.1 Definitions and Computations for Quantitative Requirements
Cross-referenced from Rule 204(2)
1. Introduction
1.1 This Practice Note sets out the considerations to apply in computing the quantitative standards in Rule 204(2).
2. Definitions and Computations
2.1 In computing income from continuing operations before income taxes, the Exchange will rely on the issuer’s financial information as submitted to the Exchange in the issuer's most recent periodic financial statements and/or prospectus.
2.2 If an issuer has less than three years of publicly reported financial data, it may qualify under Rule 204(2)(b)(ii)) if it has:
(a) aggregate income from continuing operations before income taxes of at least US$11 million; and
(b) positive income from continuing operations before income taxes in each of the reported financial years.
2.3 In computing total assets and shareholders' equity for purposes of Rule 204(2)(b)(iii), the Exchange will rely on an issuer's most recent publicly reported financial statements subject to the adjustments described below:
(a) application of use of proceeds - If the issuer is in the process of an equity offering, adjustments should be made to reflect the net proceeds of that offering, and the specified intended application(s) of such proceeds to:
(i) pay off existing debt or other financial instruments: The adjustment will include elimination of the actual historical interest expense on debt or other financial instruments classified as liabilities under generally accepted accounting principles being retired with offering proceeds of all relevant periods or by conversion into common stock at the time of an initial public offering occurring in conjunction with the issuer's listing. If the event giving rise to the adjustment occurred during a time-period such that pro forma amounts are not set forth in the prospectus (typically, the pro forma effect of repayment of debt will be provided in the prospectus only with respect to the last financial year plus any interim period in accordance with SEC rules), the issuer must prepare the relevant adjusted financial data to reflect the adjustment to its historical financial data, and its outside audit firm must provide a report of having applied agreed-upon procedures with respect to such adjustments. Such report must be prepared in accordance with the standards established by the American Institute of Certified Public Accountants.
(ii) fund an acquisition:
(A) the adjustments will include those applicable with respect to acquisition(s) to be funded with the proceeds. Adjustments will be made that are disclosed as such in accordance with rule 3-05 "Financial Statements of Business Acquired or to be Acquired" and article 11 of the SEC Regulation S-X. Adjustments will be made for all the relevant periods for those acquisitions for which historical financial information of the acquiree is required to be disclosed in the prospectus; and
(B) adjustments applicable to any period for which pro forma numbers are not set forth in the prospectus shall be accompanied by the relevant adjusted financial data to combine the historical results of the acquiree (or relevant portion thereof) and acquiror. Under SEC rules, the number of periods disclosed depends upon the significance level of the acquiree to the acquiror. The adjustments will include those necessary to reflect (I) the allocation of the purchase price, including adjusting assets and liabilities of the acquiree to fair value recognizing any intangibles (and associated amortization and depreciation), and (II) the effects of additional financing to complete the acquisition. The issuer must prepare the relevant adjusted financial data to reflect the adjustment to its historical financial data, and its outside audit firm must provide a report of having applied agreed-upon procedures with respect to such adjustments. Such report must be prepared in accordance with the standards established by the American Institute of Certified Public Accountants
(b) acquisitions and Dispositions - In instances other than acquisitions (and related dispositions of part of the acquiree) funded with the use of proceeds, adjustments will be made for those acquisitions and dispositions that are disclosed as such in the issuer's financial statements in accordance with rule 3-05 "Financial Statements of Business Acquired or to be Acquired" and article 11 of the SEC Regulation S-X. If the disclosure does not specify pre-tax earnings from continuing operations, minority interest, and equity in the earnings or losses of investees, then such data must be prepared by the issuer's outside audit firm for the Exchange's consideration. In this regard, the audit firm would have to issue an independent accountant's report on applying agreed-upon procedures in accordance with the standards established by the American Institute of Certified Public Accountants.
Practice Note 2.2 Equity Securities Listing Procedure
Cross-referenced from Chapter 2 and Rule 406
1. Introduction
1.1 This Practice Note explains:
(a) the Exchange's procedure in granting listing;
(b) the circumstances under which the Exchange may withdraw the eligibility-to-list letter and the typical listing process;
(c) the principles in dealing with comments the Exchange occasionally receives from the public on listing applications;
(d) general duties regarding due diligence by issue managers; and
(e) issuers’ connection to Singapore.
2. Exchange's Procedure
2.1 Based solely on the information provided, including representations made at the time of application and in response to any queries from the Exchange, a conditional eligibility-to-list ("ETL") letter will be issued when it appears to the Exchange that the application satisfies the listing requirements. Listing will not be permitted until all conditions set out in the ETL letter have been satisfied.
2.2 Where necessary, prior to the issuance of the ETL letter, the Exchange may issue a no-objection letter as a procedural indication that, based on information available at that time, the Exchange has not identified any matters that would preclude the issuer from proceeding with the lodgement of a prospectus.
2.3 The Exchange may withdraw the ETL letter at any time and in its absolute discretion before the listing, if:
(a) it subsequently becomes aware of any information that is likely to materially affect the issuer's eligibility for a listing;
(b) information submitted at the time of application was false or misleading or there is a material omission whether or not such omission was intentional; or
(c) any subsequent material adverse event occurs that renders the issuer not meeting the listing requirements.
3. Listing Process
3.1 indicative listing timeline and steps are set out below. Issuers that are interested in applying for a listing on the GLB are encouraged to engage SGX RegCo at an early stage through their issue managers. This is to allow for any expectations in terms of approval timelines to be aligned.
| Stage | Action and Requirement |
| Submission of listing application | 1. The issue manager submits the listing application to the Exchange at or on around the same time as its pre-lodgment prospectus submission to the Authority or, if applicable, its assistant, and its listing application to Nasdaq. The Exchange expects the listing application to be submitted no later than the second confidential filing with the SEC (if any). 2. The issue manager must submit a notification to the Exchange on the issuer’s intention to lodge the preliminary prospectus with the Authority or, if applicable, its assistant, at least five market days in advance of the proposed prospectus lodgement date. 3. Where necessary, the Exchange issues a no-objection letter for the issuer to proceed with lodgement of the preliminary prospectus with the Authority or, if applicable, its assistant. |
| Lodgement of prospectus | 1. The issuer is expected to lodge the preliminary prospectus with the Authority or, if applicable, its assistant, contemporaneously with the first public filing of the registration statement with the SEC. 2. The issuer and issue manager should engage CDP on the relevant information and documents to be submitted to CDP. 3. If the first SEC public filing did not contain any offering price range information, the next public filing containing the information should be lodged with the Authority or, if applicable, its assistant. Where subsequent SEC public filings revise the price range, amended prospectuses should also be lodged with the Authority or, if applicable, its assistant. 4. The Exchange issues the ETL letter shortly after the Exchange receives confirmation that the issuer has received Nasdaq’s approval, where practicable. 5. The issue manager must submit a notification to the Exchange on the issuer’s intention to register its prospectus with the Authority or if applicable, its assistant, at least two market days in advance of the proposed prospectus registration date. |
| Registration of prospectus | The issuer is expected to lodge the final prospectus for registration with the Authority or, if applicable, its assistant, contemporaneously with the SEC declaring the registration statement effective. |
| Prior to listing | 1. An announcement must be made via SGXNET on the final offer price and number of securities offered, unless such information has been disclosed in a final prospectus filed with the SEC and announced via SGXNET. 2. The issuer must comply with all conditions set out in the ETL letter. |
| Securities allocation and crediting | Prior to listing, the issuer must provide any information and documents, and put in place such other arrangements as may be required by the CDP, in connection with the crediting and deposit of the issuer’s equity securities with CDP. |
| Listing | Trading begins one market day after listing and trading commences in the U.S. |
| Post-listing | Where applicable, an announcement must be made via SGXNET on the final prospectus filed with the SEC, at or around the same time as such filing is made with the SEC. |
4. Comments Received
4.1 Any comment received on the listing application or prospectus from the public (whether anonymous or not) after the prospectus is lodged in Singapore will be provided to the Authority, who may provide it to the other regulatory authorities as appropriate.
5. Due Diligence
5.1 Rule 109 provides that an issue manager must:
(a) discharge its obligations with due care, diligence and skill;
(b) in preparing an issuer for a new listing, be satisfied of the various matters set out in Rule 109(2)(a), and conduct adequate due diligence on the issuer; and
(c) inform the Exchange of all matters relevant to the listing application that should be brought to the Exchange's attention, including any further information that becomes available after the listing application is submitted and before listing, in a timely manner.
5.2 Issue managers must exercise their own judgment on the nature and extent of due diligence work needed to satisfy themselves and the Exchange (including sanctions-related risks). An issue manager must have knowledge of all relevant facts and circumstances concerning an issuer's ability to meet the Exchange's listing requirements. This means that the issue manager will have taken all reasonable steps to verify the facts and, if requested, will readily be able to confirm them to the Exchange. It also means that the issue manager must be in a position to appropriately confirm and substantiate its opinions.
Sanctions-related Risks
5.3 An issuer may be exposed to sanctions-related risks where the issuer group, or its directors or executive officers, is a sanctioned subject on global sanction lists. Such global sanctions lists may be imposed or established by jurisdictions or governmental, global or regional bodies such as the Office of Foreign Assets Control of the U.S. Department of the Treasury, Singapore, the European Union and the United Nations Security Council. The imposition of sanctions may result in material adverse implications for the issuer, including financial, reputational and operational impact. Issue managers should therefore satisfy themselves that sanctions-related risks with such impact have been adequately identified and addressed by the issuer, including by relevant disclosures where appropriate.
6. Issuers' Connection to Singapore and Compliance Adviser
6.1 The Exchange looks at the connection to Singapore of every issuer. This is to ensure sufficient local representation and the ability to take steps in the event of a problem. Rules 208 and 406 requires an issuer to have a Singapore resident independent director or a Singapore-based compliance adviser. The compliance adviser is expected to advise the board on the applicable rules and regulations. The Exchange would normally accept a lawyer, a corporate finance adviser, a corporate secretarial firm or other professional parties, who are familiar with the rules and regulations applicable to a listed issuer, to be a compliance adviser. In respect of a Singapore resident independent director, to meet the objective of sufficient connection, residence generally means either citizenship or permanent residence status.
6.2 The assessment of an issuer's connection to Singapore is made on a case-by-case basis, and depends on all the circumstances. In exceptional cases, such as if an issuer has an established business presence in Singapore, the Exchange may, in its absolute discretion, accept a suitable alternative to that of a Singapore resident independent director or Singapore-based compliance advisor.
6.3 The Exchange may also require an issuer to appoint a compliance adviser for a specified period of time after listing or if it breaches the Rules, particularly if the breaches are repeated or give rise to concerns about the issuer's compliance arrangements.
Practice Note 4.1 Monitoring and Reviewing of Unusual Trading Activity
Cross-referenced from Rules 101, 103 and Chapter 4
1. Introduction
1.1 This Practice Note provides information on the procedures that issuers may undertake when unusual trading activity in their securities is observed. However, there may be instances when a different approach is warranted.
2. Role of SGX RegCo
2.1 SGX RegCo will review trading activity in the issuer’s securities. If SGX RegCo considers that there is unusual trading activity that is not directly attributable to public information relating to the issuer, industry trends or market sentiment, SGX RegCo may highlight such unusual trading activity to the issuer. The issuer should consider whether it is aware of any undisclosed material information. If so, it should be disclosed via SGXNET.
3. Reviewing of Unusual Trading Activity
3.1 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.
3.2 Issuers must comply with all applicable disclosure requirements in both Singapore and the U.S. As the securities are being traded on the Exchange, the Exchange must ensure that there is a fair, orderly and transparent market in these securities. Issuers may therefore be required to undertake a review regarding the trading of their securities on the Exchange. If required by the Exchange, the issuer must, upon being made aware of the unusual trading activity, immediately undertake an enquiry to ascertain the cause of the unusual trading activity, so that the issuer is able to disseminate all material information as soon as possible.
3.3 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 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 suspension of its securities or trading halt is expected to be lifted.
4. Privy Persons List
4.1 Issuers and persons who come into possession of confidential material information should be fully aware of the provisions in any applicable laws, regulations and rules on insider trading.
4.2 Unusual trading activity observed in an issuer's securities could indicate possible "leaks" of confidential material information. In this circumstance, the Exchange may request the issuer to submit a list of persons who have access to the information ("privy persons list"). The privy persons list should typically include information on the identity of the privy persons, the circumstances under which these persons gained access to the information (i.e. became aware or involved in the transaction), and the dates on which these persons first gained access to the information. The Exchange may also ask for related information reasonably required for the proper discharge of its regulatory function.
4.3 The issuer must have proper procedures in place to provide the privy persons list expeditiously to the Exchange upon request.
4.4 The Exchange may share information it obtains with the relevant authorities in Singapore and the U.S.
Practice Note 6.1 Trading Halt and Suspension
Cross-referenced from Rules 403, 602 and 603
1. Introduction
1.1 This Practice Note provides guidance in connection with trading halts and suspensions.
1.2 A trading halt is a short term trading stoppage to disclose material information. It is generally requested for a minimum of 30 minutes to a maximum of three market days. When a trading halt is being lifted, a stock will enter into the phase that the market is then in.
1.3 A suspension is generally a longer term trading stoppage that can be requested either by an issuer or imposed by the Exchange. When a suspension is being lifted, a stock will enter into an adjust phase for a minimum duration of 15 minutes before normal trading commences.
1.4 In a trading halt, orders in the system are not purged until the end of the market day while for a suspension, all orders are purged at the time of the suspension.
2. Trading Hours
2.1 For normal day trading, our trading hours are from 9.00am to 12.00pm and 1.00pm to 5.00pm. There is a mid-day break from 12.00pm to 1.00pm. Opening Routine is a 30-minute session before trading commences at 9.00am, i.e. 8.30am to 9.00am. Closing Routine will run for 6 minutes after 5.00pm, i.e. 5.00pm to 5.06pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 5.06pm, i.e. 5.06pm to 5.16pm.
2.2 For half day trading, our trading hours are from 9.00am to 12.00pm. Opening Routine is a 30-minute session before trading commences at 9.00am, i.e. 8.30am to 9.00am. Closing Routine will run for 6 minutes after 12.00pm, i.e. 12.00pm to 12.00pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 12.06pm, i.e. 12.06pm to 12.16pm.
3. Procedures for Trading Halt and Suspension
3.1 Trading halt or suspension can be applied at any time. When an issuer wishes to request for a trading halt or suspension in its securities during trading hours and the mid-day break, it must first contact the officers in Market Control. After alerting the Market Control officer, the issuer can then send the SGXNET announcement to request for trading halt or suspension.
3.2 In the SGXNET announcement, issuers should state the reason for requesting the trading halt or suspension.
3.3 Issuers are to observe the following guidelines when requesting for a trading halt or suspension:
(a) During trading hours and mid-day break
Please call and alert Market Control before releasing the request via SGXNET.
(b) Before or after trading hours
Please call and alert Market Control between 7.30am and 8.30am although the SGXNET request can be released anytime after the close of the previous market day and before 8.30am on the day of the trading halt or suspension.
Where the listed securities of an issuer remain halted or suspended on Nasdaq after U.S. market close on a particular day (e.g. 1 February (U.S. time)), such issuer must also request for a trading halt or suspension of its listed securities on the Exchange on the Singapore market day (e.g. 2 February (Singapore time)) immediately after such day. Such issuer must call and alert Market Control between 7.30am and 8.30am (Singapore time) on the Singapore market day (e.g. 2 February (Singapore time)) immediately after such day.
4. Procedures for Lifting of Trading Halt and Resumption of Trading from Suspension
4.1 For both trading halt and suspension, trading can resume only on the quarter-hour between 8.30am to 4.45pm for lifting of trading halt and between 9.00am to 4.45pm for resumption of trading from suspension.
4.2 Issuers must allow at least 30 minutes of dissemination time after a material announcement is made and before trading resumes.
4.3 For trading halt, issuers must allow at least 15 minutes of dissemination time for an announcement on the request for the lifting of trading halt, before trading resumes. By way of example, if an issuer makes a request for trading halt announcement at 10.00am and releases the material information at 10.16am, if there is no further release of material information, the issuer may also make a request for lifting of trading halt announcement at 10.16am. However, trading may only resume at 11.00am. If an issuer wishes to resume trading at 11.00am, the latest time which the issuer is required to make the request for lifting of trading halt announcement is 10.45am.
4.4 For suspension, issuers must allow at least 30 minutes of dissemination time for an announcement on the request for the resumption of trading from suspension, before trading resumes. By way of example, if an issuer makes a request for suspension announcement at 3.00pm and releases the material information at 3.14pm, if there is no further release of material information, the issuer may also make a request for the resumption of trading from suspension announcement at 3.14pm. However, trading may only resume at 3.45pm. If an issuer wishes to resume trading at 3.45pm, the latest time which the issuer is required to make the request for the resumption of trading from suspension announcement is 3.15pm.
4.5 Issuers are to observe the following guidelines when requesting for a lifting of trading halt or resumption of trading from suspension:
(a) During trading hours and mid-day break
Please call and alert Market Control before releasing the request via SGXNET.
(b) Before or after trading hours
Please call and alert Market Control between 7.30am and 8.30am although the SGXNET request can be released anytime after the close of the previous market day and before 8.30am on the day of the lifting of trading halt or resumption of trading from suspension.
Where the trading halt is lifted or the listed securities of an issuer resumes trading on Nasdaq on a particular day (e.g. 1 February (U.S. time)), such issuer must also request for the lifting of the trading halt or the resumption of trading in the listed securities on the Exchange on the Singapore market day (e.g. 2 February (Singapore time)) immediately after such day. Such issuer must call and alert Market Control between 7.30am and 8.30am (Singapore time) on the Singapore market day (e.g. 2 February (Singapore time)) immediately after such day.
4.6 If an issuer wishes to announce material information during trading hours, the issuer must request for a trading halt or suspension. The issuer must allow for at least 30 minutes dissemination time for such announcements before trading resumes. This should be taken into account before making any request for lifting of a trading halt or resumption of trading from suspension.
5. SGXNET Templates
5.1 Issuers must use the correct template when sending in the above requests. Issuers can choose from the following four templates:
(a) request for Trading Halt;
(b) request for Suspension;
(c) request for Lifting of Trading Halt; and
(d) request for Resumption of Trading from Suspension.