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.