Definitions and Interpretation
The following terms, unless the context requires otherwise, have the following meanings:
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| Term | Meaning |
| A | |
| "Accountants Act" | the Accountants Act (Chapter 2) of Singapore and any statutory modification or re-enactment thereof |
| "admission" | admission of securities to the Official List of the Exchange |
| "annual accounts" | the financial statements for the financial year in question, including the balance sheet, the profit and loss accounts, and the notes to the accounts |
| "Appeals Committee" | the Appeals Committee referred to in Chapter 3 |
| "associate" | (a) in relation to any individual, including a director, chief executive officer, substantial shareholder or controlling shareholder (being an individual) means: (i) his immediate family; (ii) the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and (iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more (b) in relation to a substantial shareholder or a controlling shareholder (being a company) means any other company which is its subsidiary or holding company or is a subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more |
| "associated company" | a company in which at least 20% but not more than 50% of its shares are held by the listed company or group |
| "Authority" | the Monetary Authority of Singapore or any other authority named as such under the Securities and Futures Act |
| B | |
| "borrowing company" | means a company that is or will be under a liability (whether or not such liability is present or future) to repay any money received or to be received by it in response to an invitation to the public to subscribe for or purchase debt securities of the company |
| C | |
| "CDP" or "Depository" | The Central Depository (Pte) Limited |
| "capital" | share capital including preference shares |
| "class" | equity securities or debt securities, the rights of which are identical (and in addition, for debt securities, which form a single issue or series). For this purpose a temporary difference, such as for the next dividend payment, is ignored |
| "chief executive officer" | the most senior executive officer who is responsible under the immediate authority of the board of directors for the conduct of the business of the issuer |
| "circular" | a document issued to holders of listed securities in connection with seeking the holders' approval, excluding notices of meeting, annual reports and accounts, interim accounts and proxy forms |
| "Code" | the Code of Corporate Governance, as from time to time amended, modified or supplemented |
| "Companies Act" | the Companies Act (Chapter 50) of Singapore and any statutory modification or re-enactment thereof |
| "company warrants" | equity securities carrying rights to subscribe for or purchase shares from the issuer |
| "conflicts of interest" | situations as described in Rule 417 of this Manual |
| "connected persons" | in relation to a company means a director, chief executive officer or substantial shareholder or controlling shareholder of the company or any of its subsidiaries or an associate of any of them |
| "continuing activities" | the activities set out in Rule 226 which are undertaken by a sponsor in advising an issuer on compliance with the continuing obligations under the Rules |
| "continuing sponsor" | a sponsor who is authorised by the Exchange to conduct continuing activities |
| "control" | the capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of a company |
| "controlling interest" | the interest of the controlling shareholder(s) |
| "controlling shareholder" | a person who: (a) holds directly or indirectly 15% or more of the nominal amount of all voting shares in the company. The Exchange may determine that a person who satisfies this paragraph is not a controlling shareholder; or (b) in fact exercises control over a company |
| "convertible debt securities" | debt securities convertible into or exchangeable for equity securities, and debt securities with non-detachable options, warrants or similar rights to subscribe for or purchase equity securities attached |
| "convertible equity securities" | units of shares including, but not limited to, options, warrants, or other transferable rights to subscribe for or purchase shares |
| "convertible securities" | convertible equity securities or convertible debt securities |
| "corporate finance advisory work" | providing advice: (a) to any person concerning compliance with laws or regulatory requirements (including the listing rules of the Exchange) relating to the raising of funds; or (b) to a person making an offer to: (i) subscribe for or purchase securities; or (ii) to sell or dispose of securities concerning that offer; or (c) concerning the arrangement, reconstruction or takeover of a corporation or any of its assets or liabilities; or (d) concerning the takeover of a business trust or any of its assets or liabilities held by the trustee manager on behalf of the business trust |
| D | |
| "debt securities" | debentures, units of debentures, and securities (other than equity securities) classified by the Exchange as debt securities |
| "Disciplinary Committee" | the Disciplinary Committee referred to in Chapter 3 |
| E | |
| "equity securities" | shares (including preference shares) and convertible equity securities, and securities (other than debt securities) classified by the Exchange as equity securities |
| "Exchange's listing rules", "Rules" or "this Manual" | the provisions of this Manual (excluding the Code and the Practice Notes) as from time to time amended, modified or supplemented |
| "executive officers" | the management team (excluding directors) of an issuer, including its chief executive officer, chief financial officer, chief operating officer and any other individual, regardless of title, who (a) performs or has the capacity to perform any function or responsibility equivalent to that of the foregoing persons or (b) is responsible for ensuring that the issuer complies with its obligations under the Rules |
| "existing issuer" | an issuer on the SGX Sesdaq market at the date of the introduction of the Rules |
| F | |
| "financial assistance" | includes:— (a) the lending of money, the guaranteeing or providing security for a debt incurred or the indemnifying of a guarantor for guaranteeing or providing security; and (b) the forgiving of a debt, the releasing of or neglect in enforcing an obligation of another, or the assuming of the obligations of another |
| "financial year" | in relation to any company, means the period in respect of which any profit and loss accounts of the corporation laid before it in general meeting is made up, whether that period is a year or not |
| "foreign issuer" | an issuer incorporated or otherwise established outside Singapore |
| "Former Sesdaq Rules" | the Main Board Listing Rules applicable to Sesdaq companies immediately before the introduction of the Catalist Rules, as amended from time to time |
| "full sponsor" | a sponsor who is authorised by the Exchange to conduct introducing activities, whether or not it also conducts continuing activities. This includes a financial adviser advising on introducing activities. |
| G | |
| "group" | unless specifically defined elsewhere, the issuer and its subsidiaries, if any (and the guarantor company, if any) |
| "guarantor company" | in relation to a borrowing company, means a company that has guaranteed or has agreed to guarantee the repayment of any money received or to be received by the borrowing company in response to an invitation to the public to subscribe for or purchase debt securities of the borrowing company |
| I | |
| "immediate family" | in relation to a person, means the person's spouse, child, adopted child, step-child, sibling and parent |
| "independent qualified person" | a qualified person that fulfils the following requirements: (i) the qualified person must not be a sole practitioner; (ii) if the qualified person producing the report is not a partner or director of his firm, the report must also be signed off by a partner or director, an authorised representative on behalf of the firm; (iii) the qualified person and his firm's partners, directors, substantial shareholders and their associates must be independent of the issuer, the issuer's directors, the issuer's substantial shareholders, the issuer's advisers and their associates; (iv) the qualified person and his firm's partners, directors, substantial shareholders and their associates must not have any interest, direct or indirect, in the issuer, the issuer's subsidiaries or associated companies, and will not receive benefits (direct or indirect) other than remuneration paid to the qualified person in connection with the qualified person's report; and (v) remuneration paid to the qualified person or the qualified person's firm in connection with the qualified person's report must not be dependent on the findings of the qualified person's report. |
| "introducing activities" | the activities set out in Rule 225 undertaken by a sponsor in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover |
| L | |
| "listed" | admitted to the Official List of the Exchange and not removed |
| "listing applicant" or "issuer" | a company or other legal person or undertaking, some or all of whose securities are the subject of an application for listing, or have been admitted to listing, on Catalist |
| "listing confirmation" | the listing confirmation set out in Appendix 4B |
| "Listing Manual" | the provisions of Sections A and B of this Manual (excluding the Best Practices Guide, the Code and the Practice Notes) as from time to time amended, modified or supplemented |
| M | |
| "Main Board Listing Rules" | the SGX-ST listing rules for the SGX Main Board |
| "managerial position" | means a position equivalent to, or more senior than, the head of a department or division (whether organized by function, product or territory) |
| "market" | refers to a market as contemplated under the SFA that is operated by the Exchange |
| "market day" | a day on which the Exchange is open for securities trading |
| "member company" | an entity that has been approved as a Clearing Member Company or a Non-Clearing Member Company of SGX-ST in accordance with the rules of SGX-ST, as in effect from time to time |
| "mineral, oil and gas company" | a company whose principal activities consist of exploration, development or production of mineral, oil or gas. This excludes companies that purely provide services or equipment to other companies engaged in such activities |
| O | |
| "Offeror Concert Party Group" | the offeror and parties acting in concert with it, where the expression "acting in concert" has the meaning ascribed to it under the Takeover Code |
| "OFR Guide" | Guide for the operating and financial review issued by the Council on Corporate Disclosure and Governance |
| "offer document" | the document referred to in Rule 407 |
| "offer information statement" | an offer information statement as defined in Rule 865 (where lodged with the Exchange), or as defined in the SFA (where lodged with the Authority) |
| "Official List" | the list of issuers maintained by the Exchange in relation to Catalist |
| P | |
| "poll" | method of voting under which shareholders are given one vote for each share held |
| "Practice Notes" | the practice notes issued by the Exchange from time to time under and pursuant to Rule 108, as may be amended, modified or supplemented from time to time |
| "preliminary offer document" | an offer document that does not contain the information set out in the Second Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 |
| "principal subsidiary" | a subsidiary whose latest audited consolidated pre-tax profits (including discontinued operations that have not been disposed and excluding the non-controlling interest relating to that subsidiary) as compared with the latest audited consolidated pre-tax profits of the group (including discontinued operations that have not been disposed and excluding the non-controlling interest relating to that subsidiary) accounts for 20% or more of such pre-tax profits of the group |
| "prominently" | in print, no smaller than the main text of the document, and positioned on the front cover |
| "promoters" | (a) controlling shareholders and their associates; and (b) executive directors with an interest in 5% or more of the issued share capital excluding subsidiary holdings at the time of listing. |
| "property valuation report" | a report that meets the following minimum requirements: (a) is prepared by a property valuer in accordance with the property valuation standards; and (b) states the name, professional qualifications and the relevant licence registration number of the property valuer in charge of the valuation, and the standards employed by the property valuer |
| "property valuation standards" | (a) for real properties located in Singapore, the standards set by the Singapore Institute of Surveyors and Valuers; or (b) for real properties located outside of Singapore, the International Valuation Standards or the relevant local standards for real property prescribed by a recognised professional body or relevant authority in the country where the real property is located |
| "property valuer" | a person who meets the following minimum requirements: (a) the property valuer must: (i) for valuation to be conducted for real properties located in Singapore, be a holder of an appraiser’s licence issued by the Inland Revenue Authority of Singapore and a member of the Singapore Institute of Surveyors and Valuers; or (ii) for valuation to be conducted for real properties located outside of Singapore, have a licence issued by a relevant authority to perform property valuation in the relevant market. If there is no licensing requirement in the relevant market, such property valuer must be a member of a recognised professional body which has disciplinary powers to suspend or expel the member; (b) the property valuer has at least five years of experience in valuing real properties in a similar industry and area as the real property in which the valuation is to be conducted; (c) the property valuer and his firm must be independent of the issuer. The property valuer, his associates and any of his firm’s partners or directors cannot be a substantial shareholder, director or employee of the issuer or any of the issuer’s subsidiaries. His firm must not be a related corporation or a substantial shareholder of the issuer or any of the issuer’s subsidiaries; (d) the property valuer must not be a sole practitioner; and (e) the property valuer must not have been found to be in breach of any rule or law relevant to real property valuation and is not: (i) denied or disqualified from membership of or licensing from; (ii) subject to any sanction imposed by; (iii) the subject of any disciplinary proceedings by; or (iv) the subject of any investigation which might lead to disciplinary action by, any professional body or authority relevant to real property valuation |
| "public" | persons other than: (a) directors, chief executive officer, substantial shareholders, or controlling shareholders of the issuer or its subsidiary companies; and (b) associates of the persons in paragraph (a) |
| Q | |
| "qualified person" | a person who has the appropriate experience in the type of activity undertaken or to be undertaken by a mineral, oil and gas company, meeting the following minimum requirements: (a) is professionally qualified and a member or licensee in good standing of a relevant Recognised Professional Association; (b) has at least five years of relevant professional experience in the estimation, assessment and evaluation of: (i) the mineral or minerals, oil or gas that is under consideration; and (ii) the activity which the issuer is undertaking; and (c) has not been found to be in breach of any relevant rule or law and is not: (i) denied or disqualified from membership of; (ii) subject to any sanction imposed by; (iii) the subject of any disciplinary proceedings by; or (iv) the subject of any investigation which might lead to disciplinary action by, any relevant regulatory authority or professional association. |
| "qualified person's report" | a report prepared by a qualified person in accordance with paragraph 5 of Practice Note 4C. |
| R | |
| "Recognised Professional Association" | a self-regulatory organisation of professionals recognised by the Exchange in the mineral, oil or gas industries which: (a) admits members on the basis of academic qualifications and experience; (b) requires compliance with organisation's professional standards of competence and ethics established; and (c) has disciplinary powers to suspend or expel a member. |
| "record date" | the date fixed by an issuer for the purpose of determining entitlements to dividends, rights, allotments or other distributions of holders of its securities |
| "registration notice" | the notice issued by the Exchange upon the registration of an offer document under section 240(1)(a)(iii) of the SFA by the Exchange acting as agent of MAS |
| "relative" | (a) a person's immediate family; and (b) in relation to the persons in paragraph (a), means that person's spouse, child, adopted child, step-child, sibling, or parent |
| "reserves" | the following meanings, or their equivalent under the relevant Standard used: (a) with regard to minerals, the economically mineable part of a Measured and/or Indicated resource. It includes diluting materials and allowances for losses which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. Reserves can be further categorised as: (i) "Proved Reserve" is the economically mineable part of a Measured Mineral Resource. A Proved Reserve implies high degree of confidence in the modifying factors; and (ii) "Probable Reserve" is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the modifying factors applying to a Probable Reserve is lower than that applying to a Proved Reserve; (b) with regard to oil and gas, those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves can be further categorised as: (i) "Proved Reserve" is an incremental category of estimated recoverable volumes associated with a defined degree of uncertainty. Proved Reserves are those quantities of petroleum which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate; (ii) "Probable Reserve" is an incremental category of estimated recoverable volumes associated with a defined degree of uncertainty. Probable Reserves are those additional Reserves that are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved Reserves plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate; and (iii) "Possible Reserve" is an incremental category of estimated recoverable volumes associated with a defined degree of uncertainty. Possible Reserves are those additional reserves which analysis of geoscience and engineering data suggests are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved Reserves plus Probable Reserves plus Possible Reserves (3P), which is equivalent to the high estimate scenario. When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will equal or exceed the 3P estimate. |
| "resources" | the following meanings, or their equivalent under the relevant Standard used: (a) with regard to minerals, a concentration or occurrence of solid material of economic interest in or on the earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality), continuity, and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of decreasing geological confidence, into: (i) "Measured Resource" is that part of a Mineral Resource for which quantity, grade (or quality) densities, shape, physical characteristics, are estimated with a confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade (quality) continuity between points of observation where data and samples are gathered; (ii) "Indicated Resource" is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape, physical characteristics are estimated with a sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quanity) continuity between points of observation where data and samples are gathered; and (iii) "Inferred Resource" is that part of a Mineral Resource for which quantity, and grade (or quality) are estimated on a basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verified geological and grade continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. (b) with regard to oil and gas, refers to (i) "Contingent Resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable due to one or more contingencies; and (ii) "Prospective Resources" are those quantities of petroleum which are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations. |
| "Rule" or "the Rules" | any or all of the rules in Section B of the Listing Manual, as the case may be |
| S | |
| "SFA" | the Securities and Futures Act (Chapter 289) of Singapore and any statutory modification or re-enactment thereof |
| "SGX" | Singapore Exchange Limited |
| "SGX-ST" or "the Exchange" | Singapore Exchange Securities Trading Limited |
| "SGX Main Board" | SGX-ST Main Board |
| "SGXNET" | Singapore Exchange Network, a system network used by listed companies in sending information and announcements to the Exchange or any other system networks prescribed by the Exchange for the purpose of the Exchange making that information available to the market |
| "SGX RegCo" | Singapore Exchange Regulation Pte. Ltd. |
| "SGX RegCo Board" | SGX RegCo's board of directors |
| "scripless system" | system under which trading of securities is settled on a book-entry basis |
| "scrip counters" | issuers whose transactions in their securities are settled by physical delivery of the certificates relating to such securities |
| "securities" | debt securities, equity securities and investment funds |
| "securities account" | the securities account maintained by a depositor with CDP |
| "sponsor" | a full sponsor or continuing sponsor |
| "Standard" | the standards:— (a) under one of the following codes or guidelines: with regard to minerals, (i) National Instrument 43-101 Standards of Disclosure for Minerals Projects ("NI43-101"), including Companion Policy 43-101, promulgated by the Canadian Securities Administrators (ii) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves promulgated by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia ("JORC Code"); (iii) Pan European Standard for Reporting of Exploration Results, Mineral Resources and Mineral Reserves ("PERC Standard"); and (iv) Australian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets promulgated by the VALMIN Committee ("VALMIN Code"), with regards to valuations; with regard to oil and gas, (v) Petroleum Resource Management System promulgated by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers ("SPE-PRMS"); (b) as promulgated by one of the following organisations: with regard to minerals, (i) Australasian Joint Ore Reserves Committee ("JORC"); (ii) Pan European Reserves and Resources Reporting Committee ("PERC"); (iii) Canadian Institute of Mining, Metallurgy and Petroleum ("CIM"); (iv) The Canadian Securities Administrators ("CSA") with regard to oil and gas, (v) Society of Petroleum Engineers ("SPE"); (vi) World Petroleum Council ("WPC"); (vii) the American Association of Petroleum Geologists ("AAPG"); and (viii) the Society of Petroleum Evaluation Engineers ("SPEE"); or (c) an equivalent standard that is acceptable to the Exchange. |
| "subsidiary holdings" | shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies Act. |
| "summary property valuation report" | a summary of a property valuation report which is prepared in accordance with Rule 416(3)(c) |
| "summary qualified person's report" | a summary report prepared by a qualified person in accordance with paragraph 6 of Practice Note 4C. |
| T | |
| "Takeover Code" | The Singapore Code on Take-overs and Mergers |
| "treasury shares" | treasury shares as defined in the Companies Act. For the purpose of the Rules, treasury shares will be excluded from references to "issued share capital", and "equity securities", and for the calculation of market capitalisation and public float where referred to in the Rules. |
| "trustee" | (a) a company registered as a trust company under the Trust Companies Act; or (b) a company, other than a trust company referred to in paragraph (a), that is a public company under the Act or under the laws of any other country which has been declared by the Minister to be a trustee for the purposes of the Act |
| W | |
| "weighted average price" | the total value of transactions in a listed security (for each transaction, the price multiplied by volume) for that market day divided by the volume transacted for that market day |
Interpretations
(1) Unless the context requires otherwise, words importing the singular include the plural and vice versa, and words importing the masculine include the feminine and neuter and vice versa.
(2) Where definitions in the Exchange's listing rules are wider than or the obligations and requirements imposed by the Exchange's listing rules are more onerous than the provisions of any ordinance, regulation or other statutory provision from time to time in force in Singapore, issuers shall be required to comply with such broader obligations provided that where any provision of the Exchange's listing rules is in conflict with the provisions of any such ordinance, regulation or other statutory provision, the provisions of such ordinance, regulation or other statutory provision shall prevail.
(3) Unless the context requires otherwise, terms that are not specifically defined in the listing rules will have the same meaning as assigned to them under the Companies Act.
Amended on 31 January 200831 January 2008, 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 1 August 20131 August 2013, 27 September 201327 September 2013, 7 October 20157 October 2015, 31 March 201731 March 2017, 15 September 201715 September 2017, 23 August 201823 August 2018, 11 July 201911 July 2019, 7 February 20207 February 2020 and 12 February 2021.
101
The Exchange operates Catalist in accordance with Section B of the Listing Manual, with a view to promoting a fair, orderly and transparent market.
102
In general:
(1) the roles and obligations of sponsors and their registered professionals are set out in Chapter 2 (Sponsors) and Chapter 3 (Disciplinary and Appeals Procedures); and
(2) the obligations of listing applicants, the manner in which their securities are to be offered and the continuing obligations of the issuers are set out in Chapter 4 (Equity Securities), Chapter 7 (Continuing Obligations), Chapter 8 (Changes in Capital), Chapter 9 (Interested Person Transactions), Chapter 10 (Significant Transactions), Chapter 11 (Takeovers), Chapter 12 (Circulars and Annual Reports) and Chapter 13 (Trading Halt, Suspension and Delisting).
Amended on 7 February 20207 February 2020.
103
The Rules seek to secure and maintain confidence in the market. The underlying principles of the Rules include the following:
(1) a sponsor shall have minimum standards of quality, systems, resources, experience and expertise to comply with the Rules, which includes assessing the suitability of companies for listing on Catalist and advising issuers on compliance with the Rules;
(2) an issuer shall have minimum standards of quality, operations, management experience and expertise;
(3) investors and their professional advisers shall be given all information that they would reasonably require to make an informed assessment of the securities for which listing is sought;
(4) an issuer shall disclose information if a reasonable person would expect that information to have a material effect on the price or value of its listed securities;
(5) all holders of listed securities shall be treated fairly and equitably; and
(6) directors of an issuer shall act in the interests of shareholders as a whole, particularly where a director or substantial shareholder has a material interest in a transaction entered into by the issuer.
(7) The Exchange reserves the right to subject a listed issuer's change in principal business to the Exchange's approval if in the Exchange's opinion:
(a) the integrity of the market may be adversely affected; or
(b) it is in the interests of the public to do so.
Amended on 29 September 201129 September 2011.
104
Subject to the review procedures set out in Chapter 3, the Rules are interpreted, administered and enforced by the Exchange.
(1) An issuer admitted to the Exchange's Official List must comply with the Rules:
(a) In accordance with the spirit, intention and purpose; and
(b) by looking beyond form to substance.
(2) An issuer shall ensure that its directors are responsible for the issuer's compliance with the Rules. The sponsor is responsible for advising the issuer on the interpretation and compliance with the issuer's obligations in the Rules. The decisions and requirements of the Exchange are conclusive and binding on the issuer. The Exchange may at any time vary its decision in any way, or revoke it. It may do so upon the application of the issuer or of its own accord and at its absolute discretion. The variation or revocation will take effect from the date specified by the Exchange.
(3) A sponsor shall ensure that its directors are responsible for the sponsor's compliance with the Rules. Unless referred to the Disciplinary Committee or the Appeals Committee, the decisions and requirements of the Exchange are conclusive and binding on the sponsor. The Exchange may at any time vary its decision in any way, or revoke it. It may do so upon the application of the sponsor or of its own accord and at its absolute discretion. The variation or revocation will take effect from the date specified by the Exchange. Unless referred to the Appeals Committee, the decisions of the Disciplinary Committee are conclusive and binding. If referred to the Appeals Committee, its decisions are conclusive and binding.
Amended on 29 September 201129 September 2011 and 7 October 20157 October 2015.
105
The Exchange may impose additional requirements or make any listing subject to special conditions whenever it considers it appropriate.
106
The Exchange may waive or modify compliance with a Rule (or part of a Rule) either generally or to suit the circumstances of a particular case, unless the Rule specifies that the Exchange will not waive it. The Exchange may grant a waiver subject to such conditions, as it considers appropriate. If the Exchange waives a Rule (or part of a Rule) subject to a condition, the condition must be satisfied for the waiver to be effective. Where a waiver is granted, the issuer must announce the waiver, the reasons for seeking the waiver and the conditions, if any, upon which the waiver is granted as soon as practicable. Applications for waivers should be submitted through the issuer's sponsor.
Amended on 29 September 201129 September 2011.
107
Where the Exchange rejects an admission, or other application made pursuant to Section B of the Listing Manual, it may, if it considers it appropriate, disclose the reasons for its decision but is under no obligation to do so.
108
(1) The Rules may be amended by the Exchange from time to time, subject to such approval as may be required by applicable law. The Exchange may, from time to time, issue Practice Notes or amend existing Practice Notes to provide guidance on the interpretation and application of any Rule or a more detailed prescription of a Rule. The Exchange may from time to time issue a best practices guide relating to corporate governance matters, and may amend such best practices guide.
(2) The Exchange may, from time to time, publish transitional arrangements in relation to any amended or new rule.
109
A listing applicant shall appoint a full sponsor in order to be eligible for listing on Catalist.
110
An issuer shall retain a sponsor at all times and seek advice from its sponsor regarding compliance with the Rules wherever appropriate, giving due consideration to such advice.
111
An issuer shall ensure that its directors accept responsibility, collectively and individually, for the issuer's compliance with the Rules.
112
Directors and proposed directors of an applicant (following admission, the issuer) are responsible for the accuracy of the information submitted to the Exchange. Generally, the Exchange expects information to be submitted through the sponsor. The sponsor shall exercise due care and diligence in respect of all information that is submitted through it. The Exchange must be kept informed of all matters which should be brought to its attention.
113
Applicants, issuers, sponsors and registered professionals must pay such fees and charges as prescribed by the Exchange from time to time. The Exchange may waive any fee or charges.
Amended on 25 September 201525 September 2015.
115
When the Exchange publishes or releases an issuer's announcement on its behalf, the Exchange shall not be responsible to check the accuracy of the facts or any of the contents of such announcement, and shall not be liable for any damages or losses however arising as a result of publishing the announcement or disseminating the information in the announcement. The issuer shall indemnify the Exchange for any such losses or damages or costs, including any arising as a result of legal proceedings brought by any third party.
116
Neither the Exchange nor any servant or agent of the Exchange, nor any member of the advisory panel, Disciplinary Committee or Appeals Committee is liable to any sponsor applicant or sponsor (including any director, officer, registered professional, employee or agent of the sponsor) for performing its functions under the Rules. This limitation of liability extends to any actions whether in contract or tort or otherwise, and applies even in the purported performance of a function in good faith.
202
In authorising sponsors and registered professionals, a major consideration is to maintain the Exchange's operation of markets with high integrity and standards.
203
The Exchange may authorise a sponsor to act as a full sponsor or a continuing sponsor. The Exchange may register an individual to act as a registered professional.
204
To be eligible for authorisation as a full sponsor, an applicant must meet the following eligibility criteria, in addition to any legal and regulatory requirements:
(1) be a corporation with a minimum base capital of $500,000 and sufficient professional indemnity insurance to cover its proposed sponsor activities;
(2) have established and operate out of a physical office in Singapore;
(3) have substantial shareholders, directors and key officers who are, in the Exchange's opinion, fit and proper;
(4) be experienced as a lead issue manager;
(5) have, in the Exchange's opinion, a satisfactory reputation and work record in all places where it has operated;
(6) not be in breach of any relevant rule or law in any place where it operates, including being the subject of any disciplinary proceedings, or any investigation which might lead to disciplinary action by any regulatory authority. The Exchange will normally not accept an applicant if complaints, warning letters, fines, private or public censures or reprimands, or other disciplinary action by any regulatory authority has occurred in the last 2 years;
(7) have sufficient skills and resources to discharge its obligations as a sponsor, including, upon authorisation, employing at least 3 professionals who meet the criteria in Rule 212 for registered professionals, where:
(a) at least 1 has a minimum of 10 years' experience in corporate finance advisory work or related advisory work, and has advised in a managerial or supervisory capacity on at least 5 listings in the 10 years prior to the application; and
(b) at least 2 have a minimum of 5 years' experience each in corporate finance advisory work or related advisory work, and 1 of these professionals has advised on at least 3 listings in the 5 years prior to the application; and
(8) upon authorisation, be independent of, and have no conflicts of interest with, the entities it sponsors.
Refer to Appendix 2D — Sponsor Independence.
Refer to Practice Note 2A — Eligibility Criteria for Sponsors.
205
To be eligible for authorisation as a continuing sponsor, an applicant must meet the following eligibility criteria in addition to any legal and regulatory requirements:
(1) be a corporation with a minimum base capital of $250,000 and sufficient professional indemnity insurance to cover its proposed sponsor activities;
(2) have established and operate out of a physical office in Singapore;
(3) have substantial shareholders, directors and key officers who are, in the Exchange's opinion, fit and proper;
(4) be experienced in corporate finance advisory work or compliance advisory work;
(5) have, in the Exchange's opinion, a satisfactory reputation and work record in all places where it has operated;
(6) not be in breach of any relevant rule or law in any place where it operates, including being the subject of any disciplinary proceedings, or any investigation which might lead to disciplinary action by any regulatory authority. The Exchange will take into consideration any previous breaches by the applicant of any relevant rule or law, and past disciplinary action by any regulatory authority. The Exchange will normally not accept an applicant if complaints, warning letters, fines, private or public censures or reprimands, or other disciplinary action by any regulatory authority has occurred in the last 2 years;
(7) have sufficient skills and resources to discharge its obligations as a sponsor, including upon authorisation, employing at least 2 professionals who meet the criteria in Rule 212 for registered professionals, where:
(a) at least 1 has a minimum of 5 years' managerial or supervisory experience in corporate finance advisory work or related advisory work; and
(b) at least 1 has a minimum of 5 years' experience in:—
(i) corporate finance advisory work; or
(ii) accounting, auditing or finance work;
(8) once authorised, be independent of, and have no conflicts of interest with, the entities it sponsors.
Refer to Appendix 2D — Sponsor Independence.
Refer to Practice Note 2A — Eligibility Criteria for Sponsors.
206
The Exchange has absolute discretion concerning the authorisation of an applicant. It may authorise an applicant unconditionally, or subject to conditions, or reject an applicant as it thinks appropriate. The Exchange is not obliged to give reasons. The Exchange reserves the right to vary any condition or impose additional conditions.
207
Without derogating from Rule 206 and regardless of fulfilment of the eligibility criteria, the Exchange will not authorise an applicant if in the Exchange's opinion:
(1) it is contrary to the interests of the public; or
(2) the reputation of the Exchange or the integrity of the market may be adversely affected.
208
A sponsor must continue to meet the criteria for authorisation and any conditions or restrictions imposed by the Exchange, at all times.
210
(1) The Exchange may revoke the authorisation of a sponsor if:
(a) the sponsor requests;
(b) the sponsor is unable to, evinces an intention or has failed to comply with the Rules; or
(c) in the Exchange's opinion, it is in the interests of the Exchange or markets established or operated by the Exchange.
(2) The Exchange may decide not to act under Rule 210(1) if it has charged, or intends to charge, a sponsor before the Disciplinary Committee.
(3) If the Exchange acts under Rule 210(1), it may disallow the entity from re-applying as a sponsor for a specified period or indefinitely.
211
A former sponsor is bound by the Rules, including remaining subject to disciplinary proceedings, in respect of acts or omissions which occurred while it was authorised.
212
To be eligible for registration as a registered professional, an applicant must meet the following criteria:
(1) be employed full time by a sponsor, unless otherwise agreed by the Exchange;
(2) have a satisfactory reputation and work record in all places where he has worked;
(3) not be in breach of any relevant rule or law in any place where he works, including being the subject of any disciplinary proceedings, or any investigation which might lead to disciplinary action by any regulatory authority. The Exchange will take into consideration any previous breaches by the applicant of any relevant rule or law, and past disciplinary action by any regulatory authority. The Exchange will normally not accept an applicant if complaints, warning letters, fines, private or public censures or reprimands, or other disciplinary action by any regulatory authority occurred in the last 2 years;
(4) hold a degree or appropriate professional qualifications; and
213
The Exchange has absolute discretion concerning the registration of an applicant. It may register an applicant unconditionally, or subject to conditions, or reject an applicant as it thinks appropriate. The Exchange is not obliged to give reasons. The Exchange reserves the right to vary any condition or impose additional conditions.
214
Without derogating from Rule 213 and regardless of fulfilment of the eligibility criteria, the Exchange will not register an applicant if in the Exchange's opinion:
(1) it is contrary to the interests of the public; or
(2) the reputation of the Exchange or the integrity of the market may be adversely affected.
215
A registered professional must continue to meet the criteria for registration and any conditions or restrictions imposed by the Exchange, at all times.
217
(1) The Exchange may cancel the registration of a registered professional or require a sponsor to remove a registered professional from undertaking sponsor activities if:
(a) the sponsor or registered professional requests;
(b) the registered professional is unable to, evinces an intention or has failed in carrying out the duties and obligations of the sponsor or to comply with the criteria for registration; or
(c) in the Exchange's opinion, it is in the interests of the Exchange or markets established or operated by the Exchange.
(2) The Exchange may decide not to act under Rule 217(1) if it has charged, or intends to charge, a registered professional before the Disciplinary Committee.
(3) If the Exchange acts under Rule 217(1), it may disallow the individual from re-applying as a registered professional for a specified period or indefinitely.
218
A former registered professional is bound by the Rules, including remaining subject to disciplinary proceedings, in respect of acts or omissions which occurred while he was registered.
219
If a registered professional leaves the employment of a sponsor, he:
(1) must notify the Exchange as soon as practicable; and
(2) will be de-registered.
220
To apply to be a sponsor or registered professional, an applicant must:
(1) submit to the Exchange the completed form in Appendix 2A (for sponsors), or Appendix 2B (for registered professionals); and
Refer to Appendix 2A — Catalist Sponsor Application Form and Appendix 2B —: Catalist Registered Professional Registration Form.
Refer to Appendix 2A — Catalist Sponsor Application Form and Appendix 2B —: Catalist Registered Professional Registration Form.
(2) pay the required fees.
221
The application will be subject to the following process:
(1) The eligibility criteria will be checked for fulfilment.
(2) An opinion may be obtained from the advisory panel referred to in Rule 237.
(3) The Exchange may visit the office of the applicant.
(4) With regard to sponsor applicants — key officers, proposed registered professionals and employees undertaking sponsor activities, will be screened and may be interviewed.
(5) With regard to registered professional applicants — the applicants will be screened and may be interviewed by the Exchange.
222
(1) The Exchange may require an applicant to provide any additional information or documents it requires for consideration of the application.
(2) The Exchange may make inquiries of other regulatory authorities or third parties in connection with the application.
223
A sponsor is authorised to undertake the following activities:
(1) full sponsor: introducing activities and continuing activities;
(2) continuing sponsor: continuing activities.
224
A sponsor must comply with the following general obligations:
(1) Maintain eligibility, including the following:
(a) ensure that it continues to fulfil the eligibility criteria in Rules 204 or 205, and such conditions imposed by the Exchange;
(b) notify the Exchange immediately if it ceases to fulfil any of the eligibility criteria or conditions imposed by the Exchange, or has reason to believe that it will cease to do so; and
(c) keep up to date with the requirements of the Rules and the law, and professional standards relevant to the fulfilment of its responsibilities, including a sound understanding of the legal and regulatory framework for the Singapore corporate finance market and Catalist in particular.
(2) Liaise with the Exchange on matters which should be brought to its attention, including the following:
(a) appoint a sufficiently senior registered professional (and an alternate) to liaise with the Exchange on matters concerning the sponsor's responsibilities. The sponsor must provide the Exchange with the contact details of such liaison persons and inform the Exchange immediately of any change to the details;
(b) notify the Exchange when it accepts sponsorship of an issuer, in the form contained in Appendix 2C;
Refer to Appendix 2C — Change of Sponsor Confirmation.
Refer to Appendix 2C — Change of Sponsor Confirmation.
(c) notify the Exchange when an issuer refuses to heed its advice on matters which may involve or lead to a breach of the Rules;
(d) notify the Exchange when it forms the opinion that the trading of the issuer's securities should be halted or suspended, or that the issuer should be delisted;
(e) provide any information required by the Exchange as soon as practicable, ensuring reasonably, that such information is correct, complete and not misleading. If subsequently it reasonably believes that the information provided does not meet this standard, notify the Exchange as soon as practicable, and correct the information;
(f) seek the Exchange's advice if it is unsure about the application or interpretation of the Rules or if a situation may adversely affect the reputation of the Exchange or integrity of the market. The Exchange will generally not accept enquiries from a sponsor on an anonymous basis;
(g) notify the Exchange promptly on employing a new registered professional;
(h) notify the Exchange if a registered professional leaves its employment. If possible, the Sponsor must give at least one month's notice; and
(i) notify the Exchange if any change in its board of directors or auditors occurs or is proposed.
(3) Have adequate systems and resources to discharge its obligations under the Rules, including the following:
(a) sufficient number of registered professionals, including ensuring that any employee:
(ii) who undertakes sponsor activities,
applies for registration as a registered professional;
(b) adequate systems and processes to ensure that registered professionals continue to meet the criteria for registration and any conditions or restrictions imposed by the Exchange, at all times;
(c) sufficient and appropriately qualified and experienced corporate finance, compliance and other employees, having regard to Practice Note 2A paragraph 6;
(d) appropriate internal processes and operating procedures, including those required for the supervision of employees and the quality of their work;
(e) adequate and up-to-date documentation, including its compliance, policy and procedural manuals, to support its work processes and supervision of employees;
(f) record-keeping that ensures records pertaining to its business are kept for at least 6 years, including a complete audit trail of key discussions, advice and decision-making processes in relation to listing applicants and issuers and the basis for the advice and decisions; and
(g) controls, procedures and other safeguards to maintain its independence and avoid conflicts of interest, including complying with the requirements set out in Appendix 2D.
Refer to Appendix 2D — Sponsor Independence.
Refer to Practice Note 2A — Eligibility Criteria for Sponsors.
Refer to Appendix 2D — Sponsor Independence.
Refer to Practice Note 2A — Eligibility Criteria for Sponsors.
(4) Act properly at all times in dealings with listing applicants or issuers, including the following:
(a) use due care and skill;
(b) maintain regular contact with listing applicants and issuers;
(c) seek assistance of other appropriately qualified and suitable professionals as needed, while retaining overall management and responsibility for the activity;
(d) be independent of the listing applicant or issuer and avoid conflicts of interest, including complying with the requirements set out in Appendix 2D; and
Refer to Appendix 2D — Sponsor Independence.
Refer to Appendix 2D — Sponsor Independence.
(e) only accept sponsorship of listing applicants and issuers that allow the sponsor to discharge its obligations under the Rules.
(5) Be responsible for the acts and omissions of its directors, officers, registered professionals, employees and agents.
(6) Comply with the Rules and notify the Exchange when it fails to do so, or when it becomes aware that it is likely to fail to do so.
(7) Ensure that communications with the Exchange are kept confidential, except as required to be disclosed:
(a) to the listing applicant or issuer;
(b) to the sponsor's employees, advisers, consultants or agents on a need-to-know basis;
(c) by the Authority; or
(d) by any law.
225
(1) A full sponsor, in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, must be satisfied that, having made reasonable due diligence enquiries and having considered all relevant matters, the listing applicant, or in the case of a very substantial acquisition or reverse takeover, the enlarged group, is suitable to be listed. This includes doing each of the following, having regard to the guidance in Practice Notes 2B and 4A:
(a) achieve a thorough understanding of the listing applicant or enlarged group and its business, including recent major developments relating to it, and gain an understanding of the industry it operates in;
(b) investigate and consider the suitability of each executive officer, director and the board as a whole in relation to the listing applicant's or enlarged group's needs;
(c) conduct the due diligence process for the offer document or shareholders' circular, including at a minimum, complying with the due diligence guidelines issued by The Association of Banks in Singapore where applicable or such other satisfactory and no less strict due diligence guidelines or processes;
(d) oversee, and be actively involved in, the preparation of the offer document or shareholders' circular and ensure compliance with any rule requirements or legal requirements;
(e) satisfy itself that the listing applicant or enlarged group has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the securities of the issuer remain listed on Catalist;
(f) consider and advise on the suitability and competence of other professionals and consultants involved in the admission, very substantial acquisition or reverse takeover process;
(g) undertake independent verification directly or by a reputable agent, of the listing applicant or enlarged group, its management and controlling shareholders, including:
(i) key persons' personal and business backgrounds and integrity, role in the listing applicant's or enlarged group's business, interests in other companies, and any criminal or other records or links to money laundering or organized crime; and
(ii) the listing applicant's or enlarged group's history, structure, accounts, business reputation and development, its related companies, its other businesses, and the influence of key persons;
(h) ensure that its declaration regarding the listing applicant or the enlarged group (Appendix 4B) is submitted to the Exchange;
(i) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must ensure that it will obtain appropriate technical expertise relevant to the business and products of the listing applicant or enlarged group to enable it to properly discharge its obligations as a sponsor. Such expertise can be from a third-party expert or an internal resource of equivalent standards within the full sponsor, but must be independent of, and have no conflict of interests with, the listing applicant; and
(j) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must:
(i) submit a confirmation to the Exchange that after conducting due diligence, the Sponsor is not aware of any matter that has caused it to believe that the listing applicant:
(a) has not obtained all material licences, permits or certificates necessary to conduct its operations from the relevant government bodies in the jurisdictions where the Group operates;
(b) is not in compliance with all the relevant laws, rules and regulations in all jurisdictions in which the Group operates, including but not limited to, the proper incorporation and good standing of any incorporated subsidiary or interest, except where such non-compliance is not material to the Group's business operations; and
(c) does not possess title to or validity and enforceability of the rights to any assets (including licences and agreements) as is appropriate to the listing applicant or the Group, except where such lack of, or defect in, such title or rights is not material to the Group's business operations.
The Sponsor should consider and advise on the suitability of the legal adviser involved in providing the legal opinion. In relying on the opinion from a legal adviser in providing the confirmation to the Exchange, the Sponsor should make due enquiries including:
(a) assessing the suitability of the legal adviser having regard to whether the legal adviser has the relevant experience and is authorized to practice and advise in the relevant jurisdiction; and
(b) reviewing the terms and scope of engagement.
(ii) be satisfied that the qualified person producing the qualified person's report required under Rule 441 has the relevant and appropriate qualifications, experience and technical knowledge to professionally and independently appraise the assets and liabilities being reported upon;
(iii) be satisfied that the scope of the qualified person's report required under Rule 441 is appropriate with regards to the listing applicant's or enlarged group's assets and liabilities; and
(iv) be satisfied that the work performed by the qualified person is in accordance with the relevant Standard
(2) When asked by the Exchange, demonstrate that it has complied with Practice Note 2B or how it has met the objectives in that Practice Note in another way.
(3) A full sponsor conducting introducing activities for an issuer must act as the continuing sponsor for the issuer for at least 3 years after admission of the issuer or the enlarged group. If the sponsor intends to end the sponsorship within 3 years of the issuer's listing, it must obtain the Exchange's approval. The Exchange may, in exceptional circumstances, give such approval.
Amended on 1 February 20111 February 2011, 27 September 201327 September 2013, 23 August 201823 August 2018 and 7 February 20207 February 2020.
226
(1) A sponsor taking on sponsorship of an existing issuer must comply with the following obligations:
(a) achieve a thorough understanding of the issuer and its business, including recent major developments relating to it, and gain an understanding of the industry it operates in, having regard to the guidance in paragraph 2 of Practice Note 2B where applicable;
(b) investigate and consider the suitability of each director and proposed director of the issuer and consider the efficacy of the board as a whole for the company's needs, having regard to the guidance in paragraph 3 of Practice Note 2B where applicable; and
(c) satisfy itself that the issuer has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the issuer is listed on the Exchange, having regard to the guidance in paragraph 6 of Practice Note 2B.
Refer to Practice Note 2B — Guidelines for Preparing a Listing Applicant for Admission or Advising an Issuer in a Very Substantial Acquisition or Reverse Takeover.
Refer to Practice Note 2B — Guidelines for Preparing a Listing Applicant for Admission or Advising an Issuer in a Very Substantial Acquisition or Reverse Takeover.
(2) A sponsor, in undertaking continuing activities for an issuer, must comply with the following obligations, having regard to the guidance in Practice Note 2C, where applicable:
(a) maintain regular contact with its issuer, including being available to advise on:
(i) all Rule matters; and
(ii) corporate governance matters (including board governance matters) or arrange for an appropriate adviser to do so;
(b) review all documents to be released by the issuer to shareholders or to the market (including announcements, resolutions contained in notices of meetings, circulars and corporate actions) before release, to ensure that the issuer is in compliance with the Rules and makes proper disclosure. The document must display prominently the following on the front cover:
This document has been reviewed by the Company's sponsor, [full name of sponsor]. It has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.
The contact person for the sponsor is [full name], [contact details].
This document has been reviewed by the Company's sponsor, [full name of sponsor]. It has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.
The contact person for the sponsor is [full name], [contact details].
(c) monitor the trading of the listed securities of its issuer and seek and review reasons for any unusual fluctuations in the price and volume of the listed securities;
(d) advise its issuer on the suitability of directors arising from proposed changes in the issuer's board of directors;
(e) advise its issuer on the appointment of a suitable accounting firm to meet the issuer's audit obligations; and
(f) advise its issuer if the trading of the issuer's securities should be halted or suspended.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
(3) When asked by the Exchange, demonstrate that it has complied with Practice Note 2C or how it has met the objectives in the Practice Note in another way.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
(4) A sponsor undertaking continuing activities for an issuer that is executing a corporate action must be satisfied, having made reasonable due diligence enquiries (including, at a minimum, complying with the due diligence guidelines issued by The Association of Banks in Singapore where applicable or such other satisfactory and no less strict due diligence guidelines or processes) and having considered all relevant matters, of the following:
(a) the suitability and competence of other professionals and consultants involved in the corporate action;
(b) compliance with any rule requirements or legal requirements; and
(c) that any difference in effect of the corporate action on minority shareholders compared to other shareholders, is clearly disclosed.
(5) A sponsor taking on sponsorship of, or undertaking continuing activities for, an existing issuer which is a mineral, oil and gas company must comply with the following obligations:
(a) ensure that it will obtain appropriate technical expertise relevant to the business and products of the issuer as necessary to enable it to properly discharge its obligations as a sponsor. Such expertise can be from a third-party expert or an internal resource of equivalent standards within the sponsor, but must be independent of, and have no conflict of interest with the issuer;
(b) maintain access to such technical expertise for as long as it remains as the sponsor for such issuer; and
(c) disclose in the relevant announcement, document or circular, whether it had relied on such technical expertise in the discharge of its obligations as a sponsor and if so, whether such expertise is from a third-party expert or an internal resource within the sponsor.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
Amended on 1 February 20111 February 2011, 23 August 201823 August 2018 and 7 February 20207 February 2020.
228
If a sponsor or an issuer intends to end the sponsorship, the out-going sponsor must do the following:
(1) Notify the Exchange as follows:
(a) if the sponsor is ending the sponsorship, it must give no less than 3 months' notice; or
(b) if the issuer is ending the sponsorship, the sponsor must inform the Exchange as soon as the issuer has indicated its intention to end the sponsorship.
The notification must include the reasons for ending the sponsorship.
(2) Continue its sponsorship of the issuer during the notice period, unless a new sponsor agrees to take over before the expiry of the period.
(3) Be available to discuss in a constructive and forthcoming manner with a new sponsor, its experiences with the issuer and the reasons for ending the sponsorship.
(4) Provide any documents or information that the Exchange requires.
(5) Provide to the issuer, in a form suitable for release to the market, confirmation that it is not aware of any non-compliance with the Rules by the issuer that has not been brought to the attention of the new sponsor, or if there is no new sponsor, the Exchange. The issuer must release the confirmation via SGXNET.
Refer to Practice Note 2C — Guidelines for Continuing Sponsorship.
229
A registered professional must comply with the following obligations:
(1) Maintain eligibility, including the following:
(a) ensure that he continues to fulfil the eligibility criteria in Rule 212, and such conditions imposed by the Exchange;
(b) notify the Exchange immediately if he ceases to fulfil any of the eligibility criteria or conditions imposed by the Exchange, or has reason to believe that he will cease to do so; and
(2) Exercise skill, care and diligence and comply with the applicable Rules when carrying out the duties and obligations of the sponsor.
230
(1) The Exchange will review the performance and procedures of sponsors to ascertain:
(a) the quality of the due diligence and standards applied in assessing the suitability of companies for listing on Catalist;
(b) the quality of continuing activities; and
(c) whether the sponsor's activities are being conducted in accordance with the Rules.
(2) In carrying out the review, the Exchange may:
(a) appoint any person(s) to assist in the review and delegate any of its powers to such person(s); or
(b) require a sponsor to appoint, at its cost, a special auditor to review or investigate the sponsor's affairs, and report its findings to the Exchange, the sponsor or such other party as the Exchange may direct. The Exchange must agree with the special auditor appointed and the scope of the audit.
(3) The review may take one or more of the following forms:
(a) review of documents submitted by the sponsor;
(b) interviews with the sponsor's directors, officers, registered professionals, employees, agents or other relevant third parties;
(c) audit of the sponsor's documents, records and procedures;
(d) inspection; and
(e) investigation.
231
The following applies to a review by the Exchange, its appointed persons and the special auditor.
(1) The sponsor must provide reasonable assistance, including:
(a) allowing access to all information, books and records which, in the Exchange's opinion, may be relevant to the review;
(b) allowing access to its premises;
(c) requiring its directors, officers, registered professionals, employees and agents to provide reasonable assistance;
(d) attendance at the Exchange or at such other venue the Exchange requires;
(e) ensuring that neither the sponsor nor any director, officer, registered professional, employee or agent wilfully makes or furnishes, or permits the making or furnishing, of any false or misleading information, statement or report to the Exchange; and
(f) immediately correcting any information, statement or report to the Exchange when it becomes aware that such information, statement or report is false or misleading.
(2) The Exchange may give a copy of its review report to the sponsor, but is not obliged to do so.
(3) The Exchange may charge a fee for the review, which must be paid immediately by the sponsor.
232
The Exchange may require a sponsor to submit any records, documents or communication to establish whether the sponsor continues to be eligible.
233
A sponsor must lodge an annual return with the Exchange in the form of Appendix 2E. It must do so within 90 calendar days after its financial year-end.
Refer to Appendix 2E — Sponsor's Annual Return.
234
(1) The Exchange may take one or more of the actions in Rule 234(2) if:
(a) in the Exchange's opinion, a sponsor or registered professional is unable to or evinces an intention or has failed to comply with the Rules;
(b) a sponsor or registered professional is in, or may get into, financial difficulty or a sponsor has insufficient capital;
(c) a sponsor or registered professional is in breach of any relevant rule or law in any place where it or he operates, including being the subject of any disciplinary proceedings, or any investigation which might lead to disciplinary action by any regulatory authority; or
(d) it is otherwise in the interests of the Exchange or markets established or operated by the Exchange.
(2) Subject to Rule 234(1), the Exchange may take one or more of the following actions against a sponsor or registered professional:
(a) reprimand the sponsor or registered professional privately or publicly;
(b) require an education program to be undertaken;
(c) require rectification measures to be taken by the sponsor or registered professional;
(d) require the sponsor to operate its business, or a registered professional to undertake sponsor activities, subject to such restrictions or conditions as the Exchange decides; or
(e) suspend the sponsor or registered professional from specified or all activities as a sponsor or registered professional, for a period that the Exchange decides. The suspension may be announced to the market.
(3) A suspension or restriction imposed pursuant to Rule 234(1)(c) ends if the sponsor or registered professional is acquitted or if the regulatory authority decides not to proceed with charges against the sponsor or registered professional.
(4) Nothing in this Rule prevents the Exchange from commencing disciplinary proceedings as it deems appropriate.
235
Without limiting Rule 234, the Exchange may restrict a sponsor from taking on additional listing applicants or issuers if, in its opinion, the sponsor is insufficiently resourced to discharge its obligations under the Rules.
237
(1) The Exchange may consult an advisory panel regarding sponsor and registered professional applications and other admission matters.
(2) The panel will comprise industry practitioners as appointed by the Exchange.
(3) The panel will review applications referred to it, and provide its opinion on the following matters as requested:
(a) the suitability of an applicant to be a sponsor or registered professional;
(b) the effect that the granting or refusing of an application may have on the reputation of the Exchange or the integrity of its markets; and
(c) any other matter the Exchange or the panel considers relevant.
(4) The panel has the following powers:
(a) to review the application documents; and
(b) where appropriate, to interview the applicant, directors, officers, registered professionals and employees of the applicant.
(5) The Exchange is not obliged to disclose the opinion of the panel to the relevant applicant.
(6) The Exchange is not bound by the opinion of the panel and the panel will not hear appeals from a decision of the Exchange.
238
Any prospective sponsor or registered professional applying for authorization or registration respectively, agrees that the Exchange may refer to the panel for an opinion under the Rules.
239
(1) A sponsor, and any servant or agent of the sponsor is not liable to:
(a) any listing applicant or issuer it sponsors, or
(b) any director or officer of such listing applicant or sponsor,
for disclosing any information to the Exchange or a potential new sponsor, that is required in the performance of its functions as a sponsor or former sponsor.
(2) This limitation of liability extends to any actions whether in contract or tort or otherwise.
Chapter 3 Disciplinary and Appeals Procedures, and Enforcement Powers of the Exchange
Amended on 7 October 20157 October 2015.
301
(1) This Chapter sets out:
(a) the purpose of the Disciplinary Committee and Appeals Committee;
(b) the administrative and enforcement powers of the Exchange;
(c) the process for disciplinary proceedings and appeals proceedings; and
(d) the powers of the Disciplinary Committee and Appeals Committee.
(2) For the purposes of this Chapter, the following terms, unless the context requires otherwise, have the following meanings:
| Term | Meaning |
| "Relevant Person" | means an issuer, its directors, executive officers, a sponsor or registered professional. |
| "Relevant Rule" | means the relevant provision(s) in the rules of Catalist. |
Amended on 7 October 20157 October 2015.
302
For the purposes of this Chapter, a Relevant Person is deemed to have contravened a Relevant Rule when a Relevant Person has:
(1) committed an act in breach of a Relevant Rule;
(2) omitted to do an act which resulted in a breach of a Relevant Rule;
(3) failed to comply with a requirement imposed by the Exchange;
(4) failed to comply with a requirement imposed or an order issued by the Disciplinary Committee or Appeals Committee;
(5) caused another Relevant Person to commit an act in breach of a Relevant Rule;
(6) caused another Relevant Person to omit to do an act which resulted in a breach of a Relevant Rule;
(7) caused another Relevant Person to fail to comply with a requirement imposed by the Exchange; or
(8) caused another Relevant Person to fail to comply with a requirement imposed or order issued by the Disciplinary Committee or the Appeals Committee.
Amended on 7 October 20157 October 2015.
303
(1) The Disciplinary Committee shall, as a tribunal of first instance, hear and determine charges brought by the Exchange against a Relevant Person for contravention of any Relevant Rule.
(2) The Disciplinary Committee shall comprise persons appointed by the SGX RegCo Board in consultation with the Authority, and shall not have a member who is, or who within 3 years of the proposed appointment date was, a director, officer or employee of:
(a) SGX; or
(b) a related corporation of SGX.
(3) The Disciplinary Committee shall hear and determine charges by convening a Disciplinary Committee hearing, subject to the following conditions:
(a) a Disciplinary Committee hearing shall have an initial quorum of 5 members, including the chairman or deputy chairman of the Disciplinary Committee, but may be concluded with a quorum of 3 members; and
(b) the quorum of a Disciplinary Committee hearing shall comprise at least 1 member with legal experience and the remaining members with any of the following experience:
(i) corporate finance experience
(ii) directorship experience in an issuer listed on the Exchange; and
(iii) accounting experience.
(4) The Disciplinary Committee may hear and determine charges against a Relevant Person even if the Relevant Person is no longer a Relevant Person at the time of the Disciplinary Committee hearing, so long as the Relevant Person was a Relevant Person at the time of the alleged contravention.
(5) Charges brought before the Disciplinary Committee shall be decided by a simple majority of votes by its members. In the case of an equality of votes, the chairman of the hearing shall be entitled to a casting vote.
(6) The chairman of the Disciplinary Committee has the following powers:
(a) the fixing of the date of the hearing;
(b) fixing the timelines for filing of documents for the hearing;
(c) determining if obtaining legal advice is necessary;
(d) determining if confidential information related to the proceedings may be disclosed to a third party;
(e) establishing procedures for the hearing which are not contrary to the Rules;
(f) determining if the composition of the Disciplinary Committee may be varied after the hearing has commenced; and
(g) determining all administrative and procedural matters relating to a hearing.
(7) In the absence of the chairman of the Disciplinary Committee, the deputy chairman of the Disciplinary Committee shall have all the powers of the chairman of the Disciplinary Committee.
(8) The Disciplinary Committee shall be supported by a secretariat which reports to the chairman of the Disciplinary Committee.
(9) The chairman of the Disciplinary Committee may delegate any of his powers or duties under Rule 303(6), 315(1), 315(2), 315(6) and 316(1) to any member of the Disciplinary Committee or the Disciplinary Committee secretariat.
(10) References to the chairman of the Disciplinary Committee in Rules 303(6), 315(1), 315(2), 315(6) and 316(1) shall refer to the deputy chairman or the member or secretariat who has been delegated the relevant powers of the chairman.
Added on 7 October 20157 October 2015 and amended on 15 September 201715 September 2017.
304
(1) The Appeals Committee shall hear and decide appeals arising from:
(a) decisions of the Disciplinary Committee;
(b) decisions of the Exchange relating to any of the following matters:
(i) rejection of an application for the extension of time to allow an issuer to restore its percentage of securities in public hands to at least 10% under Rule 723;
(ii) removal of an issuer from the Official List under Rule 746(5);
(iii) rejection of a proposal by a cash company to meet requirements for a new listing under Rule 1017(2);
(iv) rejection of an application for extension of time to meet requirements for a new listing under Rule 1017(2);
(v) rejection of a resumption proposal under Rule 1304;
(vi) rejection of an application for extension of time to submit or implement a resumption proposal under Rule 1304;
(vii) removal of an issuer from the Official List under Rule 1305;
(viii) rejection of a proposal by an issuer to voluntarily delist under Rule 1307;
(ix) suspension or restriction of activities undertaken by a sponsor or registered professional under Rule 305(3)(c)(xii); and
(x) revocation of the authorization of a sponsor or cancellation of the registration of a registered professional under Rule 305(3)(c)(xiii); and
(c) the enforcement actions taken by the Exchange under Rules 305(3)(c)(x), (xix) and (xx).
(2) The Appeals Committee shall comprise persons appointed by the SGX RegCo Board in consultation with the Authority, but shall not have a member who is, or who within 3 years of the proposed appointment date was, a director, officer or employee of:
(a) SGX; or
(b) a related corporation of SGX.
(3) The Appeals Committee shall hear and determine appeals by convening an Appeals Committee hearing, subject to the following conditions:
(a) an Appeals Committee hearing shall have an initial quorum of 5 members, including the chairman or deputy chairman of the Appeals Committee, but may conclude with a quorum of 3 members; and
(b) the quorum of an Appeals Committee hearing shall comprise at least 1 member with legal experience and the remaining members with any of the following experience:
(i) corporate finance experience
(ii) directorship experience in an issuer listed on the Exchange; and
(iii) accounting experience.
(4) The Appeals Committee may hear and determine appeals concerning a Relevant Person even if the Relevant Person is no longer a Relevant Person at the time of the Appeals Committee hearing, so long as the Relevant Person was a Relevant Person at the time of the alleged contravention or decision of the Exchange.
(5) Appeals brought before the Appeals Committee shall be decided by a simple majority of votes by its members. In the case of an equality of votes, the chairman of the hearing shall be entitled to a casting vote.
(6) The chairman of the Appeals Committee has the following powers:
(a) the fixing of the date of the hearing;
(b) fixing the timelines for filing of documents for the hearing;
(c) determining if obtaining legal advice is necessary;
(d) determining if confidential information related to the proceedings may be disclosed to a third party;
(e) establishing procedures for the hearing which are not contrary to the Rules;
(f) determining if the composition of the Appeals Committee may be varied after the hearing has commenced;
(g) determining if an appeal has satisfied the bases for appeal required under Rule 319(4), Rule 319(5) or Rule 319(6); and
(h) determining all administrative and procedural matters related to a hearing.
(7) In the absence of the chairman of the Appeals Committee, the deputy chairman of the Appeals Committee shall have all the powers of the chairman of the Appeals Committee.
(8) The Appeals Committee shall be supported by a secretariat which reports to the chairman of the Appeals Committee.
(9) The chairman of the Appeals Committee may delegate any of his powers or duties under Rules 304(6), 320(1), 320(2), 320(6) and 321(1) to any member of the Appeals Committee or the Appeals Committee secretariat.
(10) References to the chairman in Rules 304(6), 320(1), 320(2), 320(6) and 321(1) shall refer to the deputy chairman or the member or secretariat who has been delegated the relevant powers of the chairman.
Added on 7 October 20157 October 2015 and amended on 15 September 201715 September 2017, 7 February 20207 February 2020 and 1 August 2021.
Part III Administrative and Enforcement Powers of the Exchange
Amended on 7 October 20157 October 2015.
305
(1) The Exchange may exercise administrative powers for the purposes of ensuring that the market is fair, orderly and transparent, and that the Exchange does not act contrary to the interests of the investing public, including the powers to:
(a) issue public queries to an issuer;
(b) require an issuer to make specified disclosures;
(ba) require any Relevant Person to provide information, documents or electronic records to the Exchange;
(c) require an issuer to obtain the prior approval of the Exchange under Rule 720(2)(a), for a period not exceeding 3 years, for the appointment or reappointment of a director or an executive officer;
(d) object to the appointments or reappointments of individual directors or executive officers in any issuer for a period not exceeding 3 years;
(e) require an issuer to appoint special auditors, additional auditors, compliance advisers, legal advisers or other independent professionals for specified purposes;
(ea) require the special auditors’ or additional auditors’ findings to be reported to the Exchange, the issuer’s Audit Committee or such other party as the Exchange may direct;
(eb) object to the appointment of an auditor or require an issuer to replace the auditor if the Exchange is of the opinion that it is in the interest of shareholders to do so or that the new auditor does not satisfy the requirement in Rule 712. This rule does not apply to a financial institution licensed or approved by the Monetary Authority of Singapore;
(f) take over supervision (in full or in part) of an issuer;
(g) waive or modify compliance with a listing rule (or part of a rule);
(i) impose conditions on the authorization of a sponsor under Rule 206 or registration of a registered professional under Rule 213;
(j) remove an issuer from the Official List under Rules 724(2), 746(5), 1017(2), 1304, 1305(1)(c) and 1305(1)(e); and
(k) impose any other requirements on Relevant Person which the Exchange considers appropriate.
(2) The circumstances under which the Exchange may exercise its powers under Rule 305(1)(d) include:
(a) where the director or executive officer has refused to extend cooperation to the Exchange or other regulatory agencies on regulatory matters;
(b) where the director or executive officer has contravened any relevant laws, regulations and rules (including those of any professional or regulatory bodies) relating to fraud, dishonesty, the securities or futures industry, corruption or breaches of fiduciary duties, in Singapore or elsewhere; and
(c) where the director or executive officer is being investigated or is the subject of proceedings for breach of any relevant laws, regulations and rules (including those of any professional or regulatory bodies) relating to fraud, dishonesty, the securities or futures industry, corruption or breaches of fiduciary duties, in Singapore or elsewhere.
(3) The Exchange may exercise investigative and enforcement powers for the purposes of enforcing the Rules, including the powers to:
(a) initiate and conduct investigations against a Relevant Person;
(b) initiate disciplinary proceedings against a Relevant Person;
(c) take enforcement action against a Relevant Person including the following:
(i) issuing a private warning to a Relevant Person;
(ii) issuing a public reprimand to a Relevant Person;
(iii) offering a composition sum to an issuer, sponsor or registered professional;
(iv) requiring an issuer to appoint special auditors, compliance advisers, legal advisers or other independent professionals for specified purposes;
(v) requiring an issuer to implement an effective education or compliance programme;
(vi) requiring an issuer to appoint independent advisers to minority shareholders;
(vii) requiring an issuer's directors or executive officers to undertake a mandatory education or training programme;
(viii) requiring an issuer to undertake an independent review of internal controls and processes;
(ix) requiring an issuer to perform other remedial action to rectify the consequences of contraventions;
(x) denying an issuer of facilities of the market, prohibiting an issuer from accessing the facilities of the market for a specified period or until fulfilment of specified conditions;
(xi) requiring an issuer to comply with conditions on the activities undertaken by the issuer;
(xii) halting or suspending trading of listed securities of an issuer;
(xiii) removing an issuer from the Official List;
(xiv) imposing conditions on the authorisation of a sponsor or registration of a registered professional;
(xv) revoking the authorisation of a sponsor or cancelling registration of a registered professional;
(xvi) suspending or restricting the activities of a sponsor or registered professional;
(xvii) requiring an education program to be undertaken by a sponsor or registered professional;
(xviii) requiring an issuer to obtain the prior approval of the Exchange, for a period not exceeding 3 years, for the appointment or reappointment of a director or an executive officer;
(xix) prohibiting any issuer for a period not exceeding 3 years from appointing or reappointing the director or executive officer, as a director or executive officer, or both;
(xx) requiring the resignation of the director or executive officer from an existing position with any issuer listed on the Exchange;
(xxi) objecting to the appointments or reappointments of individual directors or executive officers in any issuer for a period not exceeding 3 years; and
(xxii) imposing any other requirements on a Relevant Person which the Exchange considers appropriate.
(4) Where a Relevant Person does not comply with requirements imposed by the Exchange set out in Part III of this Chapter, the Relevant Person shall be deemed to have contravened the Rules.
(5) The Exchange may charge, and the Disciplinary Committee may exercise its powers against, a sponsor or registered professional who:
(a) breaches any Rule, or any condition or restriction imposed by the Exchange;
(b) breaches any provisions involving fraud or dishonesty, whether in or out of Singapore;
(c) breaches director's duties; or
(d) engages in conduct detrimental to the financial integrity, reputation or interests of the Exchange.
Amended on 7 October 20157 October 2015, 7 February 20207 February 2020, 7 February 20207 February 2020, 12 February 2021 and 1 August 2021.
305A
(1) The Exchange may allow a stay of execution of the sanctions, or an extension of the relevant timelines, which may be subject to conditions imposed by the Exchange in its absolute discretion, when:
(a) a Relevant Person has filed a notice of appeal against an enforcement action by the Exchange referred to under Rule 1404(1)(c);
(b) if a Relevant Person requires more time to comply with the sanctions imposed; or
(c) if the Exchange is of the opinion that the circumstances warrant it.
Added on 1 August 2021.
306
(1) The Exchange may pose queries to an issuer where the Exchange is of the opinion that the queries are in the interests of ensuring the market is fair, orderly and transparent. Circumstances where queries may be raised include the following:
(a) where the Exchange is of the opinion that information provided is either incomplete or unclear;
(b) where the Exchange has reason to believe that an issuer has failed to disclose information as required by the Rules;
(c) where the Exchange has reason to believe that there is a possibility that the Rules has not been complied with; or
(d) where the Exchange is of the opinion that it is appropriate to do so.
(2) Upon receipt of a query from the Exchange, an issuer shall respond to the Exchange as soon as possible unless otherwise specified by the Exchange.
(3) The Exchange may require an issuer to announce the Exchange's query to the issuer, the issuer's response to the query, or both.
Added on 7 October 20157 October 2015.
307
The Exchange may conduct an investigation if:
(1) the Exchange has reason to believe that there is a possibility that any Relevant Rule has been contravened by a Relevant Person;
(2) the Exchange receives a written complaint involving a Relevant Person, or a sponsor's directors, executive officers, employees or agents;
(3) the Authority so directs; or
(4) the Exchange is of the opinion that the circumstances warrant it.
Added on 7 October 20157 October 2015.
308
For the purposes of investigation, the Exchange may require that a Relevant Person, or a sponsor's directors, executive officers, employees or agents comply with one or more the following requests:
(1) to render all reasonable acts of assistance, at the Exchange's premises or elsewhere, including:
(a) requests for information or written explanations; or
(b) requests for meetings to record statements from the Relevant Person, or the sponsor's directors, executive officers, employees or agents;
(2) to provide copies of documents or electronic records in the possession of the Relevant Person, or the sponsor's directors, executive officers, employees or agents by a specified date which shall be no less than 5 business days from the date of the request; or
(3) to obtain copies of documents or electronic records which may be reasonably obtained by the Relevant Person, or the sponsor's directors, executive officers, employees or agents by a specified date which shall be no less than 7 business days from the date of the request. Where such documents or electronic records cannot be obtained, the Relevant Person, or the sponsor's directors, executive officers, employees or agents shall provide a written explanation to:
(a) indicate why the documents or electronic records cannot be obtained; and
(b) indicate what steps have been taken to obtain the documents or electronic records.
Added on 7 October 20157 October 2015.
309
(1) Any Relevant Person, or the sponsor's directors, executive officers, employees or agents complying with a request for information, documents or electronic records from the Exchange shall take due care to ensure that such information, documents or electronic records provided to the Exchange are complete and not false or misleading in any material particular.
(2) Any Relevant Person, or the sponsor's directors, executive officers, employees or agents shall not wilfully make, furnish, authorize, or permit the giving of incomplete, false or misleading information, documents or electronic records to the Exchange.
Added on 7 October 20157 October 2015 and amended on 7 February 20207 February 2020.
310
(1) The Exchange may appoint any person or persons to assist in its investigation ("Exchange Examiner"). The Exchange may delegate all or any of its powers under Rule 308 to the Exchange Examiner. The Exchange Examiner shall report the results of the investigation to the Exchange.
(2) The Exchange may refer any investigations to another relevant investigating authority if the Exchange is of the opinion that the circumstances warrant the referral.
Added on 7 October 20157 October 2015.
311
(1) Upon the conclusion of investigations, the Exchange may provide an offer of composition to an issuer, sponsor or registered professional if the Exchange is of the opinion that the issuer, sponsor or registered professional has contravened a Relevant Rule. The terms of the offer of composition include payment of a specified sum to the Exchange and may include the fulfillment of any accompanying terms that the Exchange may prescribe.
(2) Where the Exchange provides an offer of composition to an issuer, sponsor or registered professional, the written offer shall contain the following details:
(a) the particulars of the issuer, sponsor or registered professional;
(b) the Relevant Rule which allegedly has been contravened;
(c) the brief facts giving rise to the alleged contravention;
(d) the composition sum and the accompanying terms;
(e) the manner by which the issuer, sponsor or registered professional is to respond to the offer; and
(f) the date by which the issuer, sponsor or registered professional is to respond to the offer.
(3) Where there is more than 1 contravention by an issuer, sponsor or registered professional, the offer under Rule 311(1) may be an amalgamated offer which deals with 2 or more similar contraventions. An amalgamated offer shall include all material information required under Rule 311(2).
(4) An offer under Rule 311(1) may deal with 1 or more contraventions. Where a written offer under Rule 311(1) deals with more than 1 contravention, the Exchange may choose to:
(a) proceed on selected contraventions; and
(b) take into consideration the remaining contraventions.
(5) Upon receipt of the written offer, the issuer, sponsor or registered professional shall by a specified date which shall be no less than 7 business days from the date of the offer, provide to the Exchange:
(a) a written acceptance of the offer;
(b) a written rejection of the offer; or
(c) a written request for the Exchange to review its offer.
(6) Upon receipt of a written request under Rule 311(5)(c), the Exchange shall respond within 14 business days.
(7) The Exchange may withdraw or vary a written offer made under Rule 311 at any time before receipt of an acceptance to the offer, by providing written notice to the issuer, sponsor or registered professional.
Added on 7 October 20157 October 2015.
312
(1) An offer of composition payable to the Exchange by an issuer or sponsor shall not exceed $10,000 per contravention, subject to maximum of $100,000 per offer for multiple contraventions. Subject to the decision of the Exchange, composition sums may be paid by instalments which shall not exceed 12 months from the date of acceptance of the written offer.
(2) An offer of composition payable to the Exchange by a registered professional shall not exceed $5,000 per contravention, subject to maximum of $50,000 per offer for multiple contraventions. Subject to the decision of the Exchange, composition sums may be paid by instalments which shall not exceed 12 months from the date of acceptance of the written offer.
Added on 7 October 20157 October 2015.
313
(1) The Exchange may initiate disciplinary proceeding upon confirmation that an offer under Rule 311(1) has been rejected. Where an issuer, sponsor or registered professional does not respond to a written offer under Rule 311(1) within the specified period, the issuer, sponsor or registered professional shall be deemed to have rejected the offer and the Exchange may initiate disciplinary proceedings thereafter.
(2) Upon compliance with all requirements specified in an offer under Rule 311, the Exchange shall not initiate any further enforcement or disciplinary proceeding against the issuer, sponsor or registered professional in respect of the contraventions stated in the offer. The Exchange shall also not take any further action in respect of contraventions which were taken into consideration. Acceptance of the offer of composition by the issuer, sponsor or registered professional amounts to an admission of liability and the issuer, sponsor or registered professional shall be deemed to have committed the conduct described in the charge and deemed to have waived the right to have the matter dealt with before the Disciplinary Committee.
Added on 7 October 20157 October 2015.
314
(1) Upon the conclusion of investigations, the Exchange may initiate disciplinary proceeding against a Relevant Person if the Exchange is of the opinion that the Relevant Person has contravened a Relevant Rule.
(2) Where the Exchange initiates disciplinary proceeding against a Relevant Person, the Exchange shall provide to the Relevant Person and the Disciplinary Committee, a charge which contains the following details:
(a) the particulars of the Relevant Person;
(b) the Relevant Rule which has been contravened;
(c) the brief facts giving rise to the alleged contravention; and
(d) where applicable, a summary of the outcomes of enforcement or disciplinary proceedings taken against other Relevant Persons related to that matter.
(3) Where there is more than 1 charge to be preferred against a Relevant Person, the Exchange may prefer an amalgamated charge which deals with 2 or more similar contraventions. An amalgamated charge shall include all material information required under Rule 314(2).
(4) The Exchange may prefer 1 or more charges. Where a Relevant Person faces more than 1 charge, the Exchange may:
(a) proceed on all charges at a single hearing;
(b) choose to first proceed on only selected charges ("proceeded charges") and proceed with the remaining charges only after the conclusion of the proceeded charges ("stood down charges"); or
(c) choose to proceed on only proceeded charges, but apply to have the remaining charges be taken into consideration as part of the sanctions to be imposed on the Relevant Person ("TIC charges").
Added on 7 October 20157 October 2015.
315
(1) Upon receipt of the charge, the chairman shall determine all pre-hearing administrative issues under Rule 303(6) and may issue relevant directions to parties to facilitate the convening of a hearing.
(2) Upon the resolution of all pre-hearing administrative matters under Rule 303(6), the chairman shall provide a notice of hearing which includes the following details:
(a) the identity of the members of the Disciplinary Committee who will be present at the hearing;
(b) the dates and locations of the hearing;
(c) the time parties will be allocated during the hearing;
(d) the procedural rules to be complied with at the hearing;
(e) the disputed issues to be dealt with at the hearing (where necessary);
(f) the witnesses to be called at the hearing (where necessary); and
(g) the exhibits which may be relied upon at the hearing (where necessary).
(3) Upon the issuance of the notice of hearing under Rule 315(2), parties shall inform the Disciplinary Committee within 14 business days of the following:
(a) whether there is any objection to the matters stated in the notice; and
(b) whether the party wishes to attend the hearing, and if so, the particulars of the persons who would be attending the hearing.
(4) Where a party does not respond to a relevant direction issued under Rule 315(1), the party is deemed to have no objection to the relevant direction, and the Disciplinary Committee may proceed as it deems fit.
(5) Where a party does not indicate that the party is intending to attend the hearing, the party is deemed to have no intention of attending the hearing and the hearing can proceed in the absence of that party.
(6) Where objections are raised in relation to any pre-hearing issues, the chairman shall determine the issue and inform the parties accordingly. The chairman's determination of a pre-hearing issue shall be final.
Added on 7 October 20157 October 2015.
316
(1) The chairman shall determine the manner by which a hearing is to be conducted, having due regard to the notice of hearing issued under Rule 315(2).
(2) No member of the Disciplinary Committee shall participate in a hearing if he has a conflict of interest.
(3) Where the Disciplinary Committee is of the opinion that the charge is defective, the Disciplinary Committee may invite the Exchange to amend the charge, or directly amend the charge.
(4) The Exchange may withdraw charges at any time before the decision of the Disciplinary Committee by providing the Disciplinary Committee and the Relevant Person a notice of discontinuance in relation to the withdrawn charges.
(5) Where the Exchange has preferred more than 1 charge and has applied for the charges to be TIC charges under Rule 314(4)(c), the Disciplinary Committee shall determine from the Relevant Person if there is any objection to the application.
(6) The Exchange and the Relevant Person may be represented by legal counsel at the hearings.
(7) The secretariat of the Disciplinary Committee must be informed in writing of the name of the legal counsel at least 14 business days before the hearing.
Added on 7 October 20157 October 2015.
317
(1) Upon conclusion of the hearing, the Disciplinary Committee shall within a specified period of no more than 6 weeks determine if the proceeded charges are made out and provide a written grounds of decision.
(2) Where the Disciplinary Committee makes a finding that the proceeded charges are made out, the Disciplinary Committee shall also include in the written grounds, the sanctions which are to be imposed against the Relevant Person. The Disciplinary Committee may impose one or more of the following sanctions:
(a) issuing a private warning;
(b) issuing a public reprimand;
(c) in the case of an issuer:
(i) requiring an issuer to appoint special auditors, compliance advisers, legal advisers or other independent professionals for specified purposes;
(ii) requiring an issuer to implement an effective education or compliance programme;
(iii) requiring an issuer to appoint independent advisers to minority shareholders;
(iv) requiring an issuer's directors or executive officers to undertake a mandatory education or training programme;
(v) requiring an issuer to undertake an independent review of internal controls and processes;
(vi) requiring an issuer to perform other remedial action to rectify the consequences of contraventions;
(vii) issuing an order for the denial of facilities of the market, prohibiting an issuer from accessing the facilities of the market for a specified period;
(viii) requiring an issuer to comply with conditions on the activities undertaken by the issuer;
(ix) imposing fines payable to the Exchange, of not more than $250,000 per contravention, subject to a maximum of $1,000,000 per hearing for multiple charges. Fines may be paid by way of instalments which shall not exceed 12 months from the date of the imposition of the fine;
(x) issuing an order for the suspension of the trading of an issuer's securities for a specified period; or
(xi) issuing an order for the removal of an issuer from the Official List;
(d) in the case of a sponsor:
(i) imposing conditions on the authorization of a sponsor;
(ii) imposing fines payable to the Exchange, of not more than $250,000 per contravention, subject to a maximum of $1,000,000 per hearing for multiple charges. Fines may be paid by way of instalments which shall not exceed 12 months from the date of the imposition of the fine;
(iii) issuing an order for the revocation of the authorization of a sponsor;
(iv) suspending or restricting the activities that the sponsor undertakes; or
(v) requiring an education program to be undertaken;
(e) In the case of a director or executive officer of an issuer:
(i) requiring the resignation of the director or executive officer from an existing position with any issuer listed on the Exchange;
(ii) issuing an order prohibiting any issuer for a period not exceeding 3 years, from appointing or reappointing the director or executive officer, as a director or executive officer, or both;
(f) in the case of a registered professional;
(i) imposing conditions on the registration of a registered professional;
(ii) imposing fines payable to the Exchange, of not more than $100,000 per contravention, subject to a maximum of $500,000 per hearing for multiple charges. Fines may be paid by way of instalments which shall not exceed 12 months from the date of the imposition of the fine;
(iii) suspending or restricting activities that the registered professional undertakes;
(iv) issuing an order for the cancellation of the registration of a registered professional; or
(v) requiring an education program to be undertaken;
(g) issuing an order for costs, requiring that the proceedings be paid by a Relevant Person if the Relevant Person's conduct during proceedings was unreasonable; or
(h) issuing any other order which the Disciplinary Committee is of the opinion is appropriate.
(3) Where the Disciplinary Committee finds that proceeded charges are made out, and the Relevant Person did not object under Rule 316(5) to an application for charges to be TIC charges, the Disciplinary Committee shall consider the TIC charges before determining the appropriate sanctions. The Disciplinary Committee shall include in the written grounds of decision, the effect that the TIC charges had on the determination of the sanctions imposed.
(4) Where the Disciplinary Committee considers a TIC charge and has included in the written grounds of decision, the effect that the TIC charge had on the determination of the sanctions imposed, the Exchange may not take any further disciplinary action against the Relevant Person in respect of the TIC charge.
(5) Where a Relevant Person objects to an application for charges to be taken into consideration under Rule 316(5), the charges shall be deemed to be stood down charges. The Disciplinary Committee shall not consider stood down charges when determining sanctions to be imposed.
(6) The Exchange may proceed on the stood down charges by convening a separate Disciplinary Committee hearing.
(7) Failure by a Relevant Person to comply with such requirements or orders issued by the Disciplinary Committee under Rule 317(2) shall be deemed a contravention of the Rules.
Added on 7 October 20157 October 2015 and Amended on 1 August 2021.
318
(1) The Disciplinary Committee's written grounds of decision shall be published by the Exchange, unless the sanction imposed involves the issuance of a private warning. Where a private warning is issued by the Disciplinary Committee, the Disciplinary Committee shall determine whether the written grounds of decision is to be published, and if so, whether the written grounds of decision is to be published in part or in whole.
(2) Where the Exchange has reason to believe that the requirements imposed or orders issued under Rule 317(2) have not been complied with, the Exchange may report the non-compliance to the Disciplinary Committee, and the Disciplinary Committee may provide a supplemental grounds of decision to impose further sanctions.
(3) Where a fine or order for costs of the proceedings has been imposed against a Relevant Person and the Relevant Person does not make payment within the specified period, the outstanding sum shall be a debt payable to Exchange. The Exchange may commence legal action to recover that debt, subject to any subsequent payments made by the Relevant Person. The Exchange shall be entitled to claim reasonable interest, a month after the payment is due, based on the sum outstanding.
(4) If a fine or order for costs imposed against a sponsor or registered professional remains unpaid 7 days after the deadline, the sponsor or registered professional may be suspended. Any suspension ends upon full payment of the fine.
(5) The Exchange may allow a stay of execution of the sanctions, or an extension of the relevant timelines, which may be subject to conditions imposed by the Exchange in its absolute discretion, when:
(a) a Relevant Person has filed a notice of appeal against the decision of the Disciplinary Committee;
(b) if a Relevant Person requires more time to comply with the sanctions imposed; or
(c) if the Exchange is of the opinion that the circumstances warrant it.
Added on 7 October 20157 October 2015 and amended on 1 August 2021.
319
(1) A party may appeal against the decision of the Disciplinary Committee, an enforcement action by the Exchange specified under Rule 304(1)(c), or a decision of the Exchange specified under Rule 1404(1)(b), by filing a notice of appeal with the Appeals Committee within 14 business days of the relevant decision. An appellant other than the Exchange shall pay a non-refundable administrative fee of $1,500 when filing a notice of appeal.
(2) Where a notice of appeal is filed after 14 business days of the relevant decision, the notice of appeal may only be accepted if the delay is accounted for to the satisfaction of the chairman of the Appeals Committee.
(3) A notice of appeal shall be served on all parties involved, and shall contain the following details:
(a) the date and reference details of the decision;
(b) the Relevant Rule of the decision;
(c) the brief facts relevant to the decision;
(d) a summary of the decision;
(e) the sanction imposed by the Disciplinary Committee or the Exchange, or the decision taken by the Exchange; and
(f) a summary of the grounds of appeal which includes:
(i) the specific finding which is subject to appeal; and
(ii) the reasons in support of the appeal against that finding.
(4) An appeal against a decision by the Disciplinary Committee may only be made on the following grounds:
(a) the Disciplinary Committee had acted in bad faith;
(b) there was procedural unfairness in the Disciplinary Committee's determination of the charges;
(c) there is fresh evidence, not previously available, which would likely have affected the decision of the Disciplinary Committee;
(d) the Disciplinary Committee had made a gross error in respect of a finding of fact;
(e) the Disciplinary Committee had made an error in respect of the interpretation of the Rules; or
(f) the sanctions imposed are manifestly excessive or inadequate.
(5) An appeal against a decision by the Exchange referred to under Rule 304(1)(b) may only be made on the following grounds:
(a) the Exchange had acted in bad faith;
(b) there was procedural unfairness in the Exchange's determination of the matter; or
(c) the Exchange had made an error in respect of the interpretation of the Rules.
(6) An appeal against an enforcement action by the Exchange referred to under Rule 304(1)(c) may only be made on the following grounds:
(a) the Exchange had acted in bad faith;
(b) there was procedural unfairness in the Exchange’s determination of the charges;
(c) there is fresh evidence, not previously available, which would likely have affected the decision of the Exchange;
(d) the Exchange had made a gross error in respect of a finding of fact;
(e) the Exchange had made an error in respect of the interpretation of the Exchange's listing rules; or
(f) the sanctions imposed are manifestly excessive.
(7) An appeal under Rule 319 may be heard only if leave is given by the chairman. The chairman’s decision on leave is final and not subject to any appeal.
Added on 7 October 20157 October 2015 and amended on 1 August 2021.
320
(1) Upon receipt of the notice of appeal, the chairman shall determine all pre-hearing administrative issues under Rule 304(6) and may issue relevant directions to parties to facilitate the hearing.
(2) Upon the resolution of all pre-hearing administrative matters under Rule 304(6), the chairman shall provide a notice of hearing which includes the following details:
(a) the identity of the members of the Appeals Committee who will be present at the hearing;
(b) the dates and locations of the hearing;
(c) the time parties will be allocated during the hearing;
(d) the procedural rules to be complied with at the hearing;
(e) the disputed issues to be dealt with at the hearing (where necessary);
(f) the witnesses to be called at the hearing (where necessary); and
(g) the exhibits which may be relied upon at the hearing (where necessary).
(3) Upon provision of the notice of hearing under Rule 320(2), parties shall inform the Appeals Committee within 14 business days of the following:
(a) whether there is any objection to the matters stated in the notice; and
(b) whether the party wishes to attend the hearing, and if so, the particulars of the persons who would be attending the hearing.
(4) Where a party does not respond to a relevant direction issued under Rule 320(1), the party is deemed to have no objection to the relevant direction, and the Appeals Committee may proceed as it deems fit.
(5) Where a party does not indicate that the party is intending to attend the hearing, the party is deemed to have no intention of attending the hearing and the hearing can proceed in the absence of that party.
(6) Where objections are raised in relation to any pre-hearing issues, the chairman shall determine the issue and inform parties accordingly. The chairman's determination of a pre-hearing issue shall be final.
Added on 7 October 20157 October 2015.
321
(1) The chairman of the Appeals Committee shall determine the manner by which a hearing is to be conducted, having due regard to the notice of hearing issued under Rule 320(2). A hearing before the Appeals Committee may be heard as a rehearing and evidence not previously considered by the Disciplinary Committee may be adduced.
(2) No member of the Appeals Committee shall participate in an appeal if he has a conflict of interest.
(3) Where the Appeals Committee is of the opinion that the charge is defective, the Appeals Committee may invite the Exchange to amend the charge, or directly amend the charge.
(4) An appellant may withdraw an appeal at any time before the decision of the Appeals Committee by providing a notice of discontinuance to the Appeals Committee. Where a Relevant Person withdraws an appeal under this sub-rule and the Appeals Committee is of the opinion that the conduct of the Relevant Person was unreasonable, the Appeals Committee may order that the Relevant Person pay reasonable costs incurred by the Exchange.
(5) A Relevant Person may be represented by legal counsel at the hearings.
(6) The secretariat of the Appeals Committee must be informed in writing of the name of the legal counsel at least 14 business days before the hearing of the appeal.
Added on 7 October 20157 October 2015.
322
(1) Upon conclusion of the hearing, the Appeals Committee shall within a specified period of no more than 6 weeks, determine if the proceeded charges have been made out or if the decision of the Exchange is to be upheld and provide a written grounds of decision. In coming to a decision, the Appeals Committee may:
(a) dismiss the appeal;
(b) uphold, reverse or vary the decision of the Disciplinary Committee or the Exchange;
(c) uphold, reverse or vary specific findings of the Disciplinary Committee;
(d) direct that the Exchange take a specific course of action;
(e) vary the sanctions imposed by the Disciplinary Committee; or
(f) issue any other order which it deems appropriate.
(2) Where the Appeals Committee makes a finding that the charge is made out, the Appeals Committee shall also include in the written grounds, the sanctions to be imposed against the Relevant Person. In imposing sanctions, the Appeals Committee shall have all the powers of the Disciplinary Committee under Rule 317.
Added on 7 October 20157 October 2015.
323
(1) The Appeals Committee's written grounds of decision shall be published by the Exchange, unless the sanction imposed involves the issuance of a private warning. Where a private warning is issued by the Appeals Committee, the Appeals Committee shall determine whether the written grounds of decision is to be published, and if so, whether the written grounds of decision is to be published in part or in whole.
(2) Where the Exchange has reason to believe that the requirements imposed or orders issued under Rule 322(2) have not been complied with, the Exchange may report the non-compliance to the Appeals Committee, and the Appeals Committee may provide a supplemental grounds of decision to impose further sanctions.
(3) Where a fine or order for costs of the proceedings has been imposed against a Relevant Person and the Relevant Person does not make payment within the specified period, the outstanding sum shall be a debt payable to Exchange. The Exchange may commence legal action to recover that debt, subject to any subsequent payments made by the Relevant Person. The Exchange shall be entitled to claim reasonable interest, a month after the payment is due, based on the sum outstanding.
(4) If a fine or order for costs imposed against a sponsor or registered professional remains unpaid 7 days after the deadline, the sponsor or registered professional may be suspended. Any suspension ends upon full payment of the fine.
(5) A Relevant Person may apply to the Appeals Committee for an extension of the relevant timelines to comply with sanctions imposed by the Appeals Committee.
(6) A decision of the Appeals Committee shall be final.
Added on 7 October 20157 October 2015.
324
Subject to this rule and the continuing disclosure obligations in Chapter 7, the parties to Disciplinary Committee proceedings or Appeals Committee proceedings, their representatives and their advisors shall at all times treat all matters and documents relating to the proceedings as confidential except:
(1) where all parties to the proceedings have given written consent;
(2) where a party is directed by a competent authority such as the Authority or the police;
(3) where a party is directed by a court of competent jurisdiction in Singapore;
(4) where a party is permitted or directed by the Disciplinary Committee or Appeals Committees;
(5) where the information is in the public domain; or
(6) where such disclosure is in connection with the publication by the Exchange of the decision of the Disciplinary Committee or the Appeals Committee.
Added on 7 October 20157 October 2015.
325
(1) No irregularities shall vitiate a decision of the Disciplinary Committee or Appeals Committee unless the irregularity has occasioned a failure of justice.
(2) Where an irregularity has occasioned a failure of justice in respect of a disciplinary proceeding, the Disciplinary Committee or Appeals Committee may either determine the charge accordingly, or direct that the Exchange re-initiate disciplinary proceeding.
(3) Where an irregularity has occasioned a failure of justice in respect of a decision of the Exchange, the Appeals Committee may either determine the appeal accordingly, or direct that the Exchange determine the issue afresh.
Added on 7 October 20157 October 2015.
326
The Disciplinary Committee and Appeals Committee shall not be liable for performing their functions under this Chapter. This limitation of liability extends to any actions whether in contract or tort or otherwise, and even in the purported performance of a function in good faith.
Added on 7 October 20157 October 2015.
327
All composition sums, fines and costs payable to the Exchange shall be used for investor education and related expenses.
Added on 7 October 20157 October 2015.
328
The costs of the Disciplinary Committee, Appeals Committee and their supporting secretariat shall be funded by a SGX Compliance Fund comprising contributions from the Exchange. The monies in the SGX Compliance Fund shall be kept separate from all other property of the Exchange.
Added on 7 October 20157 October 2015.
401
This Chapter sets out the requirements and procedures for a listing applicant seeking admission to the Official List of Catalist, and a listing of its equity securities. It also sets out the requirements and procedures for an issuer seeking to transfer between Catalist and SGX Main Board. These requirements apply to all issuers on Catalist, including companies incorporated in Singapore or elsewhere. The Exchange may vary the requirements in a particular case.
402
(1) A listing applicant applying for admission to Catalist and quotation of its securities must do so through a full sponsor. The listing must be a primary listing.
(2) The Exchange will normally admit a listing applicant to Catalist on receipt of conforming documents from the sponsor. However, the Exchange may, in its absolute discretion, impose conditions on an admission or delay or refuse an admission.
(3) The Exchange reserves the right to vary any condition(s) imposed.
403
Additional guidelines for the listing of property development companies are set out in Part VII of this Chapter.
404
A listing applicant should not have, as part of its name, words that tend to confuse or are misleading.
406
A listing applicant seeking admission to Catalist need not meet any minimum operating track record, profit or share capital requirement but is expected to meet the following conditions:
(1) Shareholding Spread And Distribution
(a) The proportion of post invitation share capital in public hands must be at least 15% at the time of listing. The shareholding spread must not be obtained by artificial means, such as giving shares away and offering loans to prospective shareholders to buy the shares.
(b) In the computation of the percentage of shares to be held in public hands, existing public shareholders may be included, subject to an aggregate limit of 5% of the issuer's post-invitation issued share capital and provided such shares are not under moratorium. For the purpose of this Rule, "existing public shareholders" refer to shareholders of the issuer immediately before the invitation and who are deemed "public" as defined in the Manual.
(c) The number of public shareholders of the securities must be at least 200.
(d) The overall distribution of shareholdings should be expected to provide an orderly secondary market in the securities when trading commences, and be unlikely to lead to a corner situation in the securities.
(e) The subscription and allocation value of the shares at IPO for each investor must be at least S$200 and must be based on an integral multiple of a board lot.
(2) Quantitative Criteria
(a) A listing applicant seeking admission to Catalist need not meet any market capitalisation requirements.
(b) The Exchange may publish specific additional or other criteria for different types of listing applicants.
(3) Directors and Management
(a) The directors and executive officers should have appropriate experience and expertise to manage the group's business. A director who has no prior experience as a director of an issuer listed on the Exchange must undergo training in the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange. If the nominating committee is of the view that training is not required because the director has other relevant experience, the basis of its assessment must be disclosed. As a pre-quotation disclosure requirement, a listing applicant must release a statement (via SGXNET or in the offer document) identifying for each director, whether the person has prior experience as a director of an issuer listed on the Exchange or if he has other relevant experience, and if so, provide details of his directorships and other relevant experience. If the director has no prior experience as a director of an issuer listed on the Exchange and has no other relevant experience, the listing applicant must confirm that the person has undertaken training as prescribed by the Exchange.
(b) The character and integrity of the directors, management and controlling shareholders of the listing applicant will be a relevant factor for consideration. In considering whether the directors, management and controlling shareholders have the character and integrity expected of a listed issuer, the sponsor must take into account the disclosures made in the declaration by each director, executive officer, controlling shareholder, and officer occupying a managerial position and above who is a relative of any director or controlling shareholder, in the form set out in paragraph 8, Part VII of the Fifth Schedule, Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 submitted to the sponsor.
(c) The listing applicant's board must have at least two non-executive directors who are independent and free of any material business or financial connection with the listing applicant. Independent directors must comprise at least one-third of the listing applicant's board. If the listing applicant is a foreign listing applicant, at least one of these directors must be resident in Singapore. In the event of any retirement or resignation which renders the listing applicant unable to meet any of the foregoing requirements, the listing applicant should endeavour to fill the vacancy within two months, but in any case not later than three months.
(d) A director will not be independent under any of the following circumstances:
(i) if he is employed by the listing applicant or any of its related corporations for the current or any of the past three financial years;
(ii) if he has an immediate family member who is employed or has been employed by the listing applicant or any of its related corporations for the past three financial years, and whose remuneration is determined by the remuneration committee of the listing applicant; or
(iii) [Deleted]
(iv) if he has been a director of the issuer for an aggregate period of more than nine years (whether before or after listing). Such director may continue to be considered independent until the conclusion of the next annual general meeting of the issuer.
(e) The listing applicant must establish one or more committees as may be necessary to perform the functions of an audit committee, a nominating committee and a remuneration committee, with written terms of reference which clearly set out the authority and duties of the committees.
(4) Sponsorship
The listing applicant's sponsor must provide the confirmation required in Appendix 4B that the listing applicant is suitable for listing and complies with the Rules.
Refer to Appendix 4B — Initial Public Offering Listing Confirmation.
The listing applicant's sponsor must provide the confirmation required in Appendix 4B that the listing applicant is suitable for listing and complies with the Rules.
Refer to Appendix 4B — Initial Public Offering Listing Confirmation.
(5) Restriction on Promoters' Sale of Shares
At the time of initial public offering there must be no sale of shares by a promoter if either of the following applies:
At the time of initial public offering there must be no sale of shares by a promoter if either of the following applies:
(a) all promoters in aggregate hold less than 50% of the issuer's post-invitation share capital; or
(b) all promoters in aggregate would, after selling any shares, hold less than 50% of the issuer's post-invitation share capital.
(6) Financial Position And Liquidity
(a) Prior to listing, all debts owing to the group by its directors, substantial shareholders, and companies controlled by the directors and substantial shareholders must be settled. For the purposes of this paragraph (a), reference to debt includes third party indebtedness (including contingent liabilities for guarantees and indemnities) incurred by the group for the benefit of the directors, substantial shareholders and companies controlled by the directors and substantial shareholders. This Rule does not apply to debts owing by subsidiaries and associated companies of the issuer to the group.
(b) While the surplus arising from revaluation of plant and equipment can be shown in the books of the listing applicant, such surplus should not be capitalised or used for calculating its net tangible assets per share.
(7) Chain Listing
A subsidiary or parent company of an existing listed issuer will not normally be suitable for listing if the assets and operations of the listing applicant are substantially the same as those of the existing issuer. The sponsor must consider the listing applicant's business or commercial reasons for listing.
A subsidiary or parent company of an existing listed issuer will not normally be suitable for listing if the assets and operations of the listing applicant are substantially the same as those of the existing issuer. The sponsor must consider the listing applicant's business or commercial reasons for listing.
(8) Articles of Association
A listing applicant's Articles of Association or constituent documents must meet the requirements in Appendix 4C.
Refer to Appendix 4C — Articles of Association.
A listing applicant's Articles of Association or constituent documents must meet the requirements in Appendix 4C.
Refer to Appendix 4C — Articles of Association.
(9) Accounts
A listing applicant's accounts must not be qualified in a material way.
A listing applicant's accounts must not be qualified in a material way.
(10) Lodgement and Registration of Offer Document
A listing applicant must lodge an offer document under section 240(1)(a)(ii) of the SFA with the Exchange acting as an agent of the Authority. The offer document must be registered under section 240(1)(a)(iii) of the SFA by the Exchange acting as an agent of the Authority.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
A listing applicant must lodge an offer document under section 240(1)(a)(ii) of the SFA with the Exchange acting as an agent of the Authority. The offer document must be registered under section 240(1)(a)(iii) of the SFA by the Exchange acting as an agent of the Authority.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
(11) Undertaking Not to Make Exempt Offer
The listing applicant's undertaking not to make an exempt offer, made under Regulation 10 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005, must be submitted by the sponsor to the Exchange acting as an agent of the Authority.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
The listing applicant's undertaking not to make an exempt offer, made under Regulation 10 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005, must be submitted by the sponsor to the Exchange acting as an agent of the Authority.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
(12) Written Consents
The written consents provided by experts, issue managers and underwriters under sections 249 and 249A of the SFA must be lodged with the Exchange.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
The written consents provided by experts, issue managers and underwriters under sections 249 and 249A of the SFA must be lodged with the Exchange.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
Amended on 31 January 200831 January 2008, 29 September 201129 September 2011, 29 September 201129 September 2011, 19 January 201519 January 2015, 1 January 20191 January 2019, 1 January 20221 January 2022 and 11 January 2023.
406A
(1) The financial statements and future periodic financial reports must be prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)s"), or International Financial Reporting Standards ("IFRS"), or US Generally Accepted Accounting Principles ("US GAAP"). Accounts that are prepared in accordance with IFRS or US GAAP need not be reconciled to SFRS(I)s.
(2) The annual financial statements must be audited by certified public accountants in accordance with Singapore Standards on Auditing, International Standards on Auditing, or US Generally Accepted Auditing Standards, as the case may be.
Added on 12 February 2021.
407
An offer document must meet the following requirements:
(1) It must comply with applicable law and, in particular, Parts 2 to 11 of the Fifth Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 ("Fifth Schedule"), where references therein to the following terms shall be interpreted as follows:
(a) reference to a "prospectus" shall mean a reference to an "offer document"; and
(b) reference to the "Authority" shall mean a reference to the Exchange, except for Part VII paragraph 8(k) where the "Authority" shall mean the Monetary Authority of Singapore.
(2) With regard to the statement by the listing applicant's directors required in paragraph 5(a) of Part VI of the Fifth Schedule, the listing applicant's directors must state, without requiring a profit forecast, that in their reasonable opinion, the working capital available to the listing applicant, as at the date of lodgement of the offer document is sufficient for the present requirements and for at least 12 months after listing.
(3) In addition to the statement by the listing applicant's directors required by Rule 407(2), the listing applicant's sponsor must state, without requiring a profit forecast, that in their reasonable opinion, the working capital available to the listing applicant, as at the date of lodgement of the offer document is sufficient for the present requirements and for at least 12 months after listing.
(4) It must include the following:
(a) A statement by the directors and vendors (where the issue involves the sale of vendor shares) in the form set out in Practice Note 12A.
(b) The board must comment on the adequacy and effectiveness of the issuer's internal controls (including financial, operational, compliance and information technology controls) and risk management systems. A statement on whether the audit committee concurs with the board's comment must also be provided. Where material weaknesses are identified by the board or the audit committee, they must be disclosed together with the steps taken to address them
(c) A statement by the issuer's audit committee that, after making all reasonable enquiries, and to the best of their knowledge and belief, nothing has come to the attention of the audit committee members to cause them to believe that the person appointed as the chief financial officer (or its equivalent rank) does not have the competence, character and integrity expected of a chief financial officer (or its equivalent rank) of a listed issuer.
(d) Where as required by any relevant law applicable to the issuer and/or any of its principal subsidiaries, any legal representative(s) (or person(s) of equivalent authority, however described) has been appointed or designated with sole powers to represent, exercise rights on behalf of, and enter into binding obligations on behalf of, the issuer or that principal subsidiary:
(i) Identity of the legal representative(s) (or person(s) of equivalent authority);
(ii) Powers and responsibilities of the legal representative(s) (or person(s) of equivalent authority);
(iii) Any risks in relation to the appointment, including concentration of authority and impediments to their removal; and
(iv) A description of the processes and procedures put in place to mitigate the risks in relation to the appointment and an opinion by the board on the adequacy of these processes and procedures.
(e) A statement by the issuer whether any of the independent directors of the issuer sits on the board of its principal subsidiaries that are based in jurisdictions other than Singapore.
(5) It must include on the front cover the following:
(a) the date of registration of the offer document, or in the case of a supplementary offer document or replacement offer document, the date of lodgement of the supplementary offer document or replacement offer document,
(b) the name of the corporation in respect of which the shares or units of shares, as the case may be, are being offered, its country of incorporation and the name of its sponsor,
(c) the following statements:
(i) This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax, or other professional adviser(s).
(ii) An application has been made for permission for the shares or units of shares to be listed for quotation on Catalist.
(iii) Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the SGX Main Board. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with your professional adviser(s).
(iv) This offer is made in or accompanied by an offer document that has been registered by the Singapore Exchange Securities Trading Limited ("the Exchange") acting as agent on behalf of the Monetary Authority of Singapore ("the Authority").
(v) Neither the Authority nor the Exchange has examined or approved the contents of this document. Neither the Authority nor the Exchange assumes any responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document. The Exchange does not normally review the application for admission but relies on the sponsor confirming that the listing applicant is suitable to be listed and complies with the rules. Neither the Authority nor the Exchange has in any way considered the merits of the shares or units of shares being offered for investment.
(vi) The registration of this offer document by the Exchange does not imply that the SFA, or any other legal or regulatory requirements, or requirements under the Exchange's listing rules, have been complied with.
(vii) Acceptance of applications will be conditional upon issue of the shares or units of shares and upon listing of all the issued shares or units of shares of the issuer. Monies paid in respect of any application accepted will be returned if the admission and listing do not proceed.
(viii) After the expiration of 6 months from the date of registration of this offer document, no person shall make an offer of securities, or allot, issue or sell any securities, on the basis of this offer document; and no officer or equivalent person or promoter of the entity or proposed entity will authorise or permit the offer of any securities or the allotment, issue or sale of any securities, on the basis of this offer document.
(6) If the offer document is a preliminary offer document lodged under section 240(2) of the SFA with the Exchange acting as agent of the Authority, it must meet the following requirements:
(a) The requirements in Rule 407(1) to (4), but the listing applicant may omit the information described in paragraphs 2 to 11 of the Second Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018, where references therein to a "preliminary document" shall mean a reference to a "preliminary offer document".
(b) The requirements in Rule 407(5), except that the front page of the preliminary offer document must contain a statement in bold lettering that no offer or agreement shall be made on the basis of the preliminary offer document to purchase or subscribe for any securities to which the preliminary offer document relates. The statements in Rule 407(5)(c)(iv) and (vi) shall be replaced with the following statements respectively:
"This is a preliminary offer document and is subject to further amendments and completion in the offer document to be registered by the Singapore Exchange Securities Trading Limited ("the Exchange") acting as agent on behalf of the Monetary Authority of Singapore ("the Authority"). A person to whom a copy of this preliminary document has been issued shall not circulate it to any other person. A copy of this document has been lodged by the sponsor with the Exchange acting as agent on behalf of the Authority."
"The lodgement of this preliminary offer document with the Exchange does not imply that the SFA, or any other legal or regulatory requirements, or requirements under the Exchange's listing rules, have been complied with."
"This is a preliminary offer document and is subject to further amendments and completion in the offer document to be registered by the Singapore Exchange Securities Trading Limited ("the Exchange") acting as agent on behalf of the Monetary Authority of Singapore ("the Authority"). A person to whom a copy of this preliminary document has been issued shall not circulate it to any other person. A copy of this document has been lodged by the sponsor with the Exchange acting as agent on behalf of the Authority."
"The lodgement of this preliminary offer document with the Exchange does not imply that the SFA, or any other legal or regulatory requirements, or requirements under the Exchange's listing rules, have been complied with."
(7) If, after the registration of an offer document, a supplementary or replacement offer document is required, it must comply with the following requirements:
(a) at the beginning of a supplementary offer document, there shall be:
(i) a statement that it is a supplementary offer document;
(ii) an identification of the offer document it supplements;
(iii) an identification of any previous supplementary offer document lodged with the Exchange in relation to the offer; and
(iv) a statement that it is to be read together with the offer document it supplements and any previous supplementary offer document in relation to the offer;
(b) at the beginning of a replacement offer document, there shall be:
(i) a statement that it is a replacement offer document; and
(ii) an identification of the offer document it replaces; and
(c) be lodged under section 241(1) of the SFA with the Exchange acting as agent on behalf of the Authority.
(8) The Exchange may exempt any person or any offer document from any requirement in the Rules relating to the form or content of an offer document, subject to such conditions or restrictions as may be determined by the Exchange. An exemption will not be granted unless the Exchange is of the opinion that:
(a) the cost of complying with the requirement in respect of which exemption has been applied for outweighs the resulting protection to investors; or
(b) it would not be prejudicial to the public interest if the requirement in respect of which exemption has been applied for were dispensed with.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
Amended on 31 January 200831 January 2008, 29 September 201129 September 2011, 1 January 20191 January 2019 and 7 February 20207 February 2020.
408
A Catalist issuer may apply to the Exchange in writing for transfer to SGX Main Board. The Exchange may allow the transfer if the issuer meets the following requirements:
(1) It has been listed on Catalist for at least two years;
(2) It meets:
(a) the following minimum quantitative requirements:
(b) any other listing requirements that the Exchange may prescribe (either generally or in any particular case).
(3) It provides the Exchange with an undertaking to comply with all the Exchange's requirements and policies applicable to issuers listed on the SGX Main Board. The undertaking must be in the form set out in Main Board Listing Rules Appendix 2.3.1.
(4) An offer information statement required by the SFA (meeting the requirements in the Sixteenth Schedule) must be lodged with the Authority if the issuer intends to offer additional securities on SGX Main Board, or a draft shareholder's circular to approve the transfer must be submitted to the Exchange where there is no additional offer of securities.
(5) Its shareholders have approved the transfer by special resolution.
(6) It is in compliance with all applicable Catalist Rules.
(7) For the purpose of the transfer, an issuer may be required to increase the proportion of its issued and paid-up capital held in public hands to meet the minimum shareholding spread requirements applicable to SGX Main Board listing applicants set out in Main Board Listing Rule 210(1).
Amended on 10 August 201210 August 2012 and 7 February 20207 February 2020.
410
An SGX Main Board issuer may apply to the Exchange in writing for transfer to Catalist. The Exchange may allow the transfer if the issuer meets the following requirements:
(2) It is sponsored and the sponsor provides the Exchange with a completed Appendix 4D.
Refer to Appendix 4D — Transfer Confirmation by Sponsor.
Refer to Appendix 4D — Transfer Confirmation by Sponsor.
(3) It provides the Exchange with a completed Appendix 4E.
Refer to Appendix 4E — Applicant's Listing Agreement.
Refer to Appendix 4E — Applicant's Listing Agreement.
(4) Its shareholders have approved the transfer by special resolution.
(5) It is in compliance with all applicable Main Board Listing Rules.
Amended on 31 January 200831 January 2008.
412
(1) A foreign listing applicant must release all information and documents to the Exchange in English. This applies also after listing.
(2) In addition, the following requirements should also be complied with:
(a) Confirmation to the sponsor that an announcement will be made via SGXNET as soon as there is any change in the law of its place of incorporation which may affect or change shareholders' rights or obligations over its securities, including:
(i) The right to attend, speak, vote at shareholders' meetings and the right to appoint proxies;
(ii) Right to receive rights offering and any other entitlements;
(iii) Withholding taxes on its securities;
(iv) Stamp duties on its securities;
(v) Substantial shareholder reporting requirements for its securities;
(vi) Foreign shareholding limits on the securities;
(vii) Capital controls over cash dividends or other cash distributions payable in respect of its securities; and
(viii) Obligations to file documents or make declarations in respect of its securities.
Amended on 29 September 201129 September 2011.
413
All securities will be quoted in Singapore dollars, unless the Exchange agrees to a quotation in a foreign currency, or unless the Authority's policy on the internationalisation of the Singapore dollar requires otherwise. Sponsors are encouraged to consult the Exchange if the listing applicant prefers quotation in a foreign currency.
414
Arrangements satisfactory to the sponsor and the Exchange must be made to enable shareholders in Singapore to register their shareholdings promptly.
415
(1) [Deleted]
(2) [Deleted]
Amended on 26 March 201826 March 2018, 7 February 20207 February 2020 and 12 February 2021.
416
In addition to the requirements for listing on Catalist, a property development company applying for admission to the Official List must also meet the following requirements:
(1) Minimum Leasehold Period
Properties that have remaining leases of less than 30 years must not, in aggregate, account for more than 50% of the group's operating profits for the past three years.
Properties that have remaining leases of less than 30 years must not, in aggregate, account for more than 50% of the group's operating profits for the past three years.
(2) Appointment of Property Valuer
A listing applicant must appoint a property valuer to conduct a valuation of all its principal freehold and leasehold properties. The Exchange or the sponsor may require a listing applicant to appoint a second property valuer to conduct a valuation on the properties.
A listing applicant must appoint a property valuer to conduct a valuation of all its principal freehold and leasehold properties. The Exchange or the sponsor may require a listing applicant to appoint a second property valuer to conduct a valuation on the properties.
(3) Property Valuation Report
(a) The property valuation report must state the effective date at which the properties are valued, which should not be more than six months from the date of submission of the pre-admission notification.
(b) A summary property valuation report must be included in the offer document. The property valuation report must be made available for inspection, without charge, at the issuer's Singapore registered office.
(c) A summary property valuation report must contain the following:
(i) information required for prospectuses and circulars in accordance with the standards of the Singapore Institute of Surveyors and Valuers, as set out in Practice Note 4E; and
(ii) the name, professional qualifications and the relevant licence registration number of the property valuer in charge of the valuation, and the standards employed by the property valuer.
Amended on 12 February 2021.
417
A listing applicant should resolve or mitigate conflict situations prior to listing. The Exchange may accept a proposal (submitted through the sponsor) to resolve or mitigate conflicts of interest within a reasonable period after listing. Conflicts of interest include situations in which interested persons (as defined in Rule 904(4)):
(1) Carry on business transactions with the listing applicant or provide services to or receive services from the listing applicant or its group;
(2) Lend to or borrow from the listing applicant or its group;
(3) Lease property to or from the listing applicant or its group; or
(4) Have an interest in businesses that are competitors, suppliers or customers of the listing applicant or its group.
Amended on 7 February 20207 February 2020.
418
In reviewing compliance with the Exchange's policy on conflicts of interest, the sponsor should take into account:
(1) The parties involved in the conflict situation and their relationship to the listing applicant;
(2) The significance of the conflict in relation to the size and operations of the listing applicant and in relation to its potential influence on the interested person;
(3) Whether the parties who are involved in the conflict derive any special advantage from it; and
(4) Whether the conflict can be terminated, and if so, how soon and on what basis; or, if the conflict cannot be promptly terminated, whether:
(a) the arrangement is necessary and beneficial to the operations of the listing applicant;
(b) the terms of the arrangement are the same or better than those that can be obtained from third parties;
(c) the arrangement will be reviewed at regular intervals and approved by independent directors or shareholders;
(d) the listing applicant has or will have adequate internal procedures to ensure that the terms of the arrangement are fair and reasonable; and
(e) there is, or has been, adequate disclosure of the conflict, the parties to it, and the measures taken in respect of it in the offer document.
419 Purpose of a Moratorium
The purpose of a moratorium is to maintain the promoters' commitment to the issuer and align their interests with that of public shareholders. In the case of investors other than promoters, the purpose of the moratorium is to promote the interests of a fair and orderly market.
420
The promoters must give contractual undertakings to the sponsor to observe a moratorium on the transfer or disposal of all their interests in the securities of the issuer.
421
Where a promoter has an indirect shareholding in the listing applicant, the promoter must also provide an undertaking to maintain the promoter's effective interest in the securities under moratorium during the moratorium period. However where an indirect shareholding is held through a company which is listed, the promoter's holding in that listed company is excluded from the moratorium.
422
The period of moratorium must not be shorter than the following:
(1) A promoter's entire shareholdings at listing for at least 6 months after listing, and no less than 50% of the original shareholding (adjusted for any bonus issue, subdivision or consolidation) for the next 6 months.
(2) In the case of investors who acquired their securities, and who made payment for their acquisition, less than 12 months prior to the date of the listing, a proportion of their shareholdings will be subject to moratorium for 12 months after listing computed based on the following cash formula:
Where
Where
| M | = | the number of shares subject to moratorium; |
| VCP | = | the total cash paid for the shares acquired by the investor within the 12 months preceding the date of the listing; |
| VIPO | = | the value of the investor's total shareholdings acquired within 12 months preceding the date of the listing based on the issue price at the initial public offering; and |
| P | = | the total number of shares paid for by the investor in the 12 months preceding the date of the listing. |
(3) In the case of investors who are connected to the sponsor for the initial public offering of the issuer, their shareholdings will be subject to a moratorium for 6 months after listing. For the avoidance of doubt, these investors are prohibited from selling vendor shares at the time of the initial public offering.
(a) Rule 422(3) will not apply if:
(i) the investor is a fund manager and the funds invested in the issuer are managed on behalf of independent third parties;
(ii) the investor and the sponsor have separate and independent management teams and decisions making structures; and
(iii) proper policies and procedures have been implemented to address any conflict of interest arising between the sponsor and the investor.
The issuer (through its sponsor) should consult and demonstrate to the Exchange that these conditions have been met, to the satisfaction of the Exchange, for Rule 422(3) not to apply. The Exchange retains the discretion to require compliance with Rule 422(3) where it deems fit.
(4) For the purposes of Rules 422(2) and (3), where an introducer of the issuer, a consultant to the issuer for the initial public offering, or investors who are connected to the sponsor have an indirect shareholding in the issuer, these investors may be required to comply with the moratorium requirements in Rule 421.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
423
A listing applicant may be admitted to Catalist by distributing its securities either by way of a public offer, or placement, or book-building, or by a combination of these methods, subject to compliance with the Rules and such other conditions as the Exchange or the sponsor may consider appropriate.
424
The sponsor, underwriter, lead broker, distributor, or any of their connected clients (as defined in Rule 428) or their discretionary managed portfolios (whether proprietary or not) must not be allocated or allotted more than 25% of the securities made available for placement by each of them respectively. Any allocation or allotment to such parties must be disclosed in the form specified in Rule 428. This Rule does not apply to securities taken up pursuant to an underwriting or sub-underwriting agreement.
425
Where an invitation involves a public tranche for subscription or purchase, the following Rules apply to allocation and allotment of securities in this tranche:
(1) The basis of allocation and allotment to investors must be fair and equitable.
(2) The balloting procedures must be clearly spelt out and strictly adhered to. Unsuccessful listing applicants must be notified, and the application money must be returned, within 24 hours of the balloting.
(3) In respect of applications which have been balloted but subsequently rejected, the reasons for rejection must be clearly stated.
(4) In respect of applications which have been partially successful, the balance of the application money must be refunded in the shortest possible time.
426
The listing applicant may reserve up to 25% of the offered securities for allocation and allotment to its employees, directors, customers, suppliers and persons who have contributed to the success of the listing applicant.
427
An issue of securities in connection with a listing on the Exchange can be made with or without it being underwritten. A listing applicant which proposes to make an issue without underwriting should consult the Exchange as early as possible through its sponsor.
428
(1) If any of the following persons acquires an interest (whether directly or through a nominee) in the securities being marketed, their respective aggregate interest and the circumstances resulting in the acquisition of the interest must be announced before listing of the listing applicant's securities:
(a) each director and his associates;
(b) each substantial shareholder and his associates;
(c) the sponsor and its connected clients;
(d) the underwriter and its connected clients;
(e) the lead broker and its connected clients;
(f) any distributor and its connected clients.
(2) The disclosure required by Rule 428(1) must be made to the best of the sponsor's knowledge and belief, having taken all reasonable steps and made all reasonable enquiries.
(3) A "connected client" means:
(a) a director or substantial shareholder of the sponsor, underwriter, lead broker or distributor;
(b) a spouse, infant child or step child of any person in (a);
(c) a person in the capacity of trustee of a private or family trust (other than a pension scheme) the beneficiaries of which include any person in (a);
(d) a relative of any person in (a) whose account is managed by the sponsor, underwriter, lead broker or distributor in pursuance of a discretionary managed portfolio agreement; or
(e) a company which is a member of the same group of companies as the sponsor, underwriter, lead broker or distributor.
(4) After the offer to the public closes, the listing applicant announces the outcome of the offer, and where appropriate, the level of subscription and the basis of allocation and allotment, and the subscription rate reflecting the true level of demand for the offer. In computing the subscription rate, subscriptions by connected persons and the persons mentioned in Rule 428 must be excluded.
429
The issue price of the equity securities (other than convertible equity securities) offered for subscription or sale, for which a listing is sought, must be at least S$0.20 each.
430
A listing applicant offering equity securities for subscription or sale must keep the offer open for at least 2 market days (excluding the date of commencement of offer).
431
A sponsor may consult the Exchange to resolve specific issues prior to the submission of a listing confirmation. Unless the Exchange prescribes otherwise, the listing applicant must comply with the requirements set out in Appendix 4F which sets out the following:
(1) The main steps in the listing process.
(2) Documents to be submitted by the sponsor to the Exchange.
(3) The usual timeline for admission.
The sponsor must give the Exchange any additional information or documents which the Exchange requires, either in the particular case or generally.
Amended on 31 January 200831 January 2008.
432
In normal circumstances the Exchange will rely on the listing confirmation in Appendix 4B. However, the Exchange may refuse or delay an admission at any point prior to listing, notwithstanding that it receives a listing confirmation and notwithstanding that the offer document has been registered by the Exchange, if:
(1) in the Exchange's opinion:
(a) the reputation of the Exchange or the integrity of the market may be adversely affected;
(b) doubt exists, or apparently sustainable allegations are made, as to the integrity of a director, executive officer or controlling shareholder of the listing applicant;
(c) doubt exists as to the accuracy or completeness of the information in the offer document. While the Exchange does not review these documents, it may undertake sample perusal or receive information from third persons;
(d) any submission or lodgement that is required under the Rules is inaccurate or incomplete;
(e) the Rules are not complied with;
(f) it is in the interests of the public to refuse or delay the admission; or
(2) the Authority advises the Exchange to refuse or delay the admission.
Amended on 31 January 200831 January 2008.
433
The sponsor must ensure that it has considered all information that is material to its decision on the application. The Exchange may require the sponsor to undertake additional due diligence.
434
Notice of a refusal of, or delay to, an admission will be given to the sponsor and copied to the listing applicant.
435
A listing applicant will be admitted according to the terms issued together with the registration notice issued by the Exchange.
Amended on 31 January 200831 January 2008.
438
In addition to the requirements for listing on Catalist, a mineral, oil and gas company applying for admission to the Official List must also meet the requirements set out in this Part of the Listing Manual.
Added on 1 February 20111 February 2011
439
The Exchange will normally not admit a listing applicant, whose activities consist solely of exploration for minerals, oil or gas, to Catalist unless the listing applicant is able to establish the existence of resources in a defined area, which is substantiated by the qualified person's report prepared by an independent qualified person. In complying with this Rule, the resource must be at least, in relation to minerals, categorised as an Inferred Resource and, in relation to oil and gas, as a Contingent Resource.
Added on 1 February 20111 February 2011 and amended on 23 August 201823 August 2018.
440 Additional Offer Document Requirements
(1) A listing applicant must disclose in its offer document the basis upon which it asserts the existence of any minerals, oil or gas in a defined area, in accordance with the requirements set out in Practice Note 4C.
(2) The listing applicant's sponsor must state the legal opinion obtained pursuant to Rule 225(1)(j)(i) and the legal advisor providing such opinion.
Added on 1 February 20111 February 2011 and amended on 23 August 201823 August 2018.
441 Qualified Person's Report
(1) The offer document must contain a qualified person's report prepared by an independent qualified person that is dated not more than 6 months before the date of lodgement of the offer document.
Added on 1 February 20111 February 2011 and amended on 23 August 201823 August 2018.
443 Period of Moratorium
Rule 422 will not apply to a promoter of a mineral, oil and gas company. Instead, the period of moratorium will apply to the promoter's entire shareholdings at listing for at least 12 months after listing, and no less than 50% of the original shareholding (adjusted for any bonus issue, subdivision or consolidation) for the next 6 months.
Added on 1 February 20111 February 2011 and amended on 7 February 20207 February 2020.
444 Working Capital
Rules 407(2) and 407(3) will not apply to mineral, oil and gas companies. A listing applicant must meet the following requirements instead:
(1) The listing applicant's directors must state, without making a profit forecast, that in their reasonable opinion, the working capital available to the listing applicant is sufficient for the present requirements and for at least 18 months after listing. Such working capital must include (i) operating, general and administrative and financing costs; (ii) property holding costs; and (iii) costs of any proposed exploration and / or development. Working capital shall be considered as the applicant's ability to access cash and other available liquid resources (including proceeds from the initial public offering and projected cashflows but excluding future borrowings / financing which have not been obtained) in order to meet its liabilities as they fall due. Where projected cashflows are relied upon, the sponsor must submit a confirmation to the Exchange that it is satisfied that the projections are prepared by the applicant's directors after due and careful enquiry. Proceeds from the initial public offering can be taken into consideration only if the invitation is fully underwritten. If the invitation is not underwritten but the listing is subject to a specified minimum amount to be raised from the invitation, the proceeds taken into consideration shall be limited to the minimum amount to be raised.
(2) In addition to the statement by the listing applicant's directors required by Rule 444(1), the listing applicant's sponsor must state, without requiring a profit forecast, that in its reasonable opinion, the working capital available to the listing applicant is sufficient for the present requirements and for at least 18 months after listing. Such working capital must include (i) operating, general and administrative and financing costs; (ii) property holding costs; and (iii) costs of any proposed exploration and / or development. Working capital shall be considered as the applicant's ability to access cash and other available liquid resources (including proceeds from the initial public offering and projected cashflows but excluding future borrowings / financing which have not been obtained) in order to meet its liabilities as they fall due. Where projected cashflows are relied upon, the sponsor must submit a confirmation to the Exchange that it is satisfied that the projections are prepared by the applicant's directors after due and careful enquiry. Proceeds from the initial public offering can be taken into consideration only if the invitation is fully underwritten. If the invitation is not underwritten but the listing is subject to a specified minimum amount to be raised from the invitation, the proceeds taken into consideration shall be limited to the minimum amount to be raised.
Added on 1 February 20111 February 2011 and amended on 27 September 201327 September 2013.
701
This Chapter sets out continuing requirements which an issuer on Catalist is required to observe once admitted to the Official List. Additional continuing requirements are set out in the following chapters:
Chapter 8 Changes in Capital
Chapter 9 Interested Person Transactions
Chapter 10 Significant Transactions
Chapter 11 Takeovers
Chapter 12 Circulars and Annual Reports
Amended on 7 February 20207 February 2020.
703
(1) An issuer must announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which:
(a) is necessary to avoid the establishment of a false market in the issuer's securities; or
(b) would be likely to materially affect the price or value of its securities.
(2) Rule 703(1) does not apply to information which would be a breach of law to disclose.
(3) Rule 703(1) does not apply to particular information which satisfies the following conditions:
Condition 1: a reasonable person would not expect the information to be disclosed;
Condition 2: the information is confidential; and
Condition 3: one or more of the following applies:
Condition 1: a reasonable person would not expect the information to be disclosed;
Condition 2: the information is confidential; and
Condition 3: one or more of the following applies:
(a) the information concerns an incomplete proposal or negotiation;
(b) the information comprises matters of supposition or is insufficiently definite to warrant disclosure;
(c) the information is generated for the internal management purposes of the entity;
(d) the information is a trade secret.
(4) In complying with the Exchange's disclosure requirements, an issuer must:
(a) observe the Corporate Disclosure Policy set out in Appendix 7A, and
Refer to Appendix 7A — Corporate Disclosure Policy.
Refer to Appendix 7A — Corporate Disclosure Policy.
(b) ensure that its directors and executive officers are familiar with the Exchange's disclosure requirements and Corporate Disclosure Policy.
(5) The Exchange will not waive any requirements under this Rule.
Refer to Practice Note 7A — Continuing Disclosure and Practice Note 7B — Queries Regarding Unusual Trading Activity.
704
In addition to Rule 703, an issuer must immediately announce the following:
General
(1) Any change of address of the registered office of the issuer or of any office at which the Register of Members or any other register of securities of the issuer is kept.
(2) Any proposed alteration to the Memorandum of Association or Articles of Association or Constitution of the issuer.
(3) [Deleted]
(4) Any adverse opinion, disclaimer of opinion, qualified opinion or emphasis of a matter (including a material uncertainty relating to going concern) by the auditors on the financial statements of:
(a) the issuer; or
(b) any of the issuer's subsidiaries or associated companies, if the adverse opinion, disclaimer of opinion, qualified opinion or emphasis of a matter has a material impact on the issuer's consolidated accounts or the group's financial position.
(5) If an issuer has previously announced its preliminary full-year results, any material adjustments to its preliminary full-year results made subsequently by auditors.
Appointment or Cessation of Service
(6)
(a) Any appointment or cessation of service of key persons such as director, chief executive officer, chief financial officer, chief operating officer, general manager or other executive officer of equivalent authority, company secretary, registrar or auditors of the issuer. The announcement of an appointment or cessation of service of any director, chief executive officer, chief financial officer, chief operating officer, general manager or other executive officer of equivalent authority must contain the information contained in Appendix 7F or Appendix 7G, as the case may be.
(b) In the case of a cessation of service of any director, chief executive officer, chief financial officer, chief operating officer, general manager or other executive officer of equivalent authority, such persons must inform the Exchange in writing as soon as possible if he is aware of any irregularities in the issuer which would have a material impact on the group, including financial reporting.
(7) Any appointment or reappointment of a director to the audit committee. The issuer must state in the announcement whether the board considers the director to be independent. The issuer must also provide such additional disclosure as may be appropriate in the circumstances to enable its shareholders to assess the independence or otherwise of the appointed director. In the event of any retirement or resignation which renders the audit committee unable to meet the minimum number (not less than three) the issuer should endeavour to fill the vacancy within two months, but in any case not later than three months.
(8) Any appointment of a person who is a relative of a director or chief executive officer or substantial shareholder of the issuer to a managerial position in the issuer or any of its principal subsidiaries. The announcement must state the job title, duties and responsibilities of the appointee, and the information required in Rule 704(6).
(9) Any promotion of an appointee referred to in Rule 704(8).
(10) Within 60 days after each financial year, the issuer must make an announcement of each person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer as set out in Appendix 7C Part II. If there are no such persons, the issuer must make an appropriate negative statement. The Exchange may require the issuer to provide additional information on any such person, including his remuneration, any changes to his duties, responsibilities and remuneration package.
(11) Any appointment of, or change in legal representative(s) (or person(s) of equivalent authority, however described), appointed as required by any relevant law applicable to the issuer and/or any of its principal subsidiaries, with sole powers to represent, exercise rights on behalf of, and enter into binding obligations on behalf of, the issuer and/or that principal subsidiaries.
(12) For issuers with principal subsidiaries based in jurisdictions other than Singapore, any of its independent director's appointment or cessation of service from the board of these principal subsidiaries.
Appointment of Special Auditors or Additional Auditors
(13) Any appointment of a special auditor or an additional auditor. The issuer may be required by the Exchange to announce the findings of the special auditors or the additional auditors.
General Meetings
(14) The date, time and place of any general meeting. All notices convening meetings must be sent to shareholders at least 14 calendar days before the meeting (excluding the date of notice and the date of meeting). For meetings to pass special resolution(s), the notice must be sent to shareholders at least 21 calendar days before the meeting (excluding the date of notice and the date of meeting).
(15) Immediately after each general meeting and before the commencement of the pre-opening session on the market day following the general meeting, whether the resolutions put to a general meeting of an issuer were passed. The announcement shall include:
(a) Breakdown of all valid votes cast at the general meeting, in the following format:
| Resolution number and details | Total number of shares represented by votes for and against the relevant resolution | For | Against | ||
| Number of shares | As a percentage of total number of votes for and against the resolution (%) | Number of shares | As a percentage of total number of votes for and against the resolution (%) | ||
(b) Details of parties who are required to abstain from voting on any resolution(s), including the number of shares held and the individual resolution(s) on which they are required to abstain from voting; and
(c) Name of firm and/or person appointed as scrutineer.
Acquisitions and Realisations
(16) Any acquisition of:
(a) shares resulting in the issuer holding 10% or more of the total number of issued shares excluding treasury shares and subsidiary holdings of a quoted company; and
(b) except for an issuer which is a bank, finance company, securities dealing company or approved financial institution, quoted securities resulting in the issuer's aggregate cost of investment exceeding each multiple of 5% of the issuer's latest audited consolidated net tangible assets. The announcement must state:
(i) the issuer's aggregate cost of investment in quoted securities before and after the acquisition, and such amounts as a percentage of the latest audited consolidated net tangible assets of the issuer;
(ii) the total market value of its investment in quoted securities before and after the acquisition; and
(iii) the amount of any provision for diminution in value of investment in quoted securities.
An issuer should not include the issuer's holdings in its subsidiaries and associated companies listed or quoted on the Exchange or on a foreign stock exchange when computing its investment in quoted securities.
(c) [Deleted]
(d) [Deleted]
(17) Any sale of:
(a) shares resulting in the issuer holding less than 10% of the total number of issued shares excluding treasury shares and subsidiary holdings of a quoted company; and
(b) except for an issuer which is a bank, a finance company, a securities dealing company or an approved financial institution, quoted securities resulting in the issuer's aggregate cost of investment in quoted securities falling below each multiple of 5% of the issuer's latest audited consolidated net tangible assets. The announcement must contain the same information as required under Rule 704(16)(b)(i) to (iii), relating to a sale instead of an acquisition.
(c) [Deleted]
(d) [Deleted]
(18) Any acquisition or disposal of shares or other assets which is required to be announced under Chapter 10.
Winding Up, Judicial Management, etc
(19) Any application filed with a court to wind up the issuer or any of its subsidiaries, or to place the issuer or any of its subsidiaries under judicial management.
(20) The appointment of a receiver, judicial manager or liquidator of the issuer or any of its subsidiaries.
(21) [Deleted]
(22) Where Rule 704(19), (20) or (34) applies, a monthly update must be announced regarding the issuer's financial situation, including:
(a) the state of any negotiations between the issuer and its principal bankers or trustee; and
(b) the issuer's future direction, or other material development that may have a significant impact on the issuer's financial position.
If any material development occurs between the monthly updates, it must be announced immediately. No monthly updates are required for a voluntary liquidation of a dormant subsidiary by the issuer that is announced pursuant to Rule 704(20).
Announcement of Results, Dividends, etc
(23) Any recommendation or declaration of a dividend (including a bonus or special dividend, if any), the rate and amount per share and date of payment. If dividends are not taxable in the hands of shareholders, this must be stated in the announcement and in the dividend advice to shareholders. If there is a material variation in the interim or final dividend rate compared to that for the previous corresponding period, the directors must state the reasons for the variation at the time the dividend is recommended or declared. If the directors decide not to declare or recommend a dividend, this must be announced together with the reason(s) for such decision.
(24) After the end of each of the first three quarters of its financial year, half year or financial year, as the case may be, an issuer must not announce any:
(a) dividend;
(b) bonus issue or rights issue;
(c) record date;
(d) capital return; or
(e) passing of a dividend,
(f) [Deleted]
unless it is accompanied by the financial statements for the quarter, half year or financial year (as set out in Appendix 7C), as the case may be, or the financial statements (as set out in Appendix 7C) have been announced.
Record Date
(25) Any intention to fix a record date, stating the date, reason and address of the share registry at which the relevant documents will be accepted for registration. At least 5 market days of notice (excluding the date of announcement and the record date) must be given for any record date. Issuers could consider a longer notice period, where necessary. The Exchange may agree to a shorter books closure period. In fixing a record date, an issuer must ensure that the last day of trading on a cum basis falls at least 1 day after the general meeting, if a general meeting is required to be held.
(26) The issuer must not fix a record date for any purpose until at least 8 market days after the previous record date. This rule does not prohibit identical record dates for different purposes.
Sponsorship
(27) If its sponsor will cease, or ceases to sponsor it for any reason, stating the reasons and effective date of such cessation.
(28) Any confirmation made by the sponsor pursuant to Rule 228(5) upon receipt of such confirmation.
(29) The appointment of a new sponsor.
Use of Proceeds
(30) The use of the IPO proceeds and any proceeds arising from any offerings pursuant to Chapter 8 as and when such funds are materially disbursed and whether such a use is in accordance with the stated use and in accordance with the percentage allocated in the offer document or the announcement of the issuer. Where the proceeds are used for general working capital purposes, the issuer must announce a breakdown with specific details on the use of proceeds for working capital. Where there is any material deviation from the stated use of proceeds, the issuer must also announce the reasons for such deviation.
Treasury Shares and Subsidiary Holdings
(31) Any sale, transfer, cancellation and/or use of treasury shares stating the following:
(a) date of the sale, transfer, cancellation and/or use;
(b) purpose of such sale, transfer, cancellation and/or use;
(c) number of treasury shares sold, transferred, cancelled and/or used;
(d) number of treasury shares before and after such sale, transfer, cancellation and/or use;
(e) percentage of the number of treasury shares against the total number of shares outstanding in a class that is listed before and after such sale, transfer, cancellation and/or use; and
(f) value of the treasury shares if they are used for a sale or transfer, or cancelled.
(31A) Any sale, transfer, cancellation and/or use of subsidiary holdings stating the following:
(a) date of the sale, transfer, cancellation and/or use;
(b) purpose of such sale, transfer, cancellation and/or use;
(c) number of subsidiary holdings sold, transferred, cancelled and/or used;
(d) number of subsidiary holdings before and after such sale, transfer, cancellation and/or use; and
(e) percentage of the number of subsidiary holdings against the total number of shares outstanding in a class that is listed before and after such sale, transfer, cancellation and/or use.
Employee Share Option or Share Scheme
(32) Any grant of options or shares. The announcement must be made on the date of the offer and provide details of the grant, including the following:
(a) date of grant;
(b) exercise price of options granted;
(c) number of options or shares granted;
(d) market price of its securities on the date of grant;
(e) number of options or shares granted to each director and controlling shareholders (and each of their associates), if any; and
(f) validity period of the options.
Loan Agreements / Issue of Debt Securities
(33) When the issuer or any of its subsidiaries enters into a loan agreement or issues debt securities that contain a specified condition, and the breach of this specified condition will be an event of default, an enforcement event or an event that would cause acceleration of the repayment of the principal amount of the loan or debt securities, significantly affecting the operations of the issuer or results in the issuer facing a cash flow problem:
(a) the details of the specified condition; and
(b) the level of these facilities that may be affected by a breach of such specified condition.
For the purpose of Rule 704(33) and Rule 728, a "specified condition" is a condition that makes reference to the shareholding interests of any controlling shareholder of the issuer, or a restriction on any change in control of the issuer.
(34) For any loan agreement or debt securities of the issuer or any of its subsidiaries, any breach of, or occurrence of any event under the terms of, the loan agreement or debt securities if it, in the opinion of the issuer's directors, may:
(a) have a significant impact on the operations of the issuer; or
(b) result in the issuer facing a cash flow problem.
Announcements by mineral, oil and gas companies
(35)
(a) Any material changes to the reserves and resources of a mineral, oil and gas company, including:
(i) the basis upon which the issuer asserts the existence of any new material reserves or resources that has not been previously disclosed, in accordance with the requirements as set out in Practice Note 4C; and
(ii) in addition, a summary qualified person's report in respect of the reserves and resources must be announced as soon as practicable.
Where the announcement involves the reporting of new material reserves and resources that has not been previously disclosed, or a 100% change or more in reserves and resources that have been previously reported on, the summary qualified person's report must be prepared by an independent qualified person.
Where the announcement involves the reporting of new material reserves and resources that has not been previously disclosed, or a 100% change or more in reserves and resources that have been previously reported on, the summary qualified person's report must be prepared by an independent qualified person.
(b) Any change in the Standard adopted by the issuer, including the reasons for the change and the impact, if any, on its existing stated level of reserves and resources.
(c) [Deleted]
Restatement of Financial Statements Required by Regulatory Authority
(36) Any requirement by a regulatory authority to restate or re-file financial statements, indicating clearly the reasons for being required to do so.
Public Sanctions
(37) Any public reprimand or public sanction relating to non-compliance with applicable laws or regulations, including any applicable accounting standards.
Amended on 1 January 20111 January 2011, 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 19 November 201219 November 2012, 27 September 201327 September 2013, 1 August 20151 August 2015, 31 March 201731 March 2017, 23 August 201823 August 2018, 1 January 20191 January 2019, 7 February 20207 February 2020, 7 February 20207 February 2020 and 12 February 2021.
705
(1) An issuer must announce the financial statements for the full financial year (as set out in Appendix 7C) immediately after the figures are available, but in any event not later than 60 days after the relevant financial period.
Refer to Appendix 7C — Financial Statements and Dividend Announcements.
Refer to Appendix 7C — Financial Statements and Dividend Announcements.
(2) An issuer must announce its financial statements for each of the first three quarters of its financial year (as set out in Appendix 7C) immediately after the figures are available, but in any event not later than 45 days after the quarter end if:
(a) [Deleted]
(b) [Deleted]
(c) [Deleted]
(d) its auditors have issued an adverse opinion, a qualified opinion or disclaimer of opinion on the issuer's latest financial statements; or
(e) its auditors have stated that a material uncertainty relating to going concern exists in the issuer's latest financial statements.
(2A) Unless otherwise determined by the Exchange, an issuer that is required to announce its financial statements under Rule 705(2) will have a grace period of one year to comply with the requirement, such grace period commencing on the date on which the condition in Rule 705(2) is met. An issuer must continue to comply with Rule 705(2) for so long as any condition in Rule 705(2) is met.
(2B) Rule 705(2) will not apply to an issuer if:—
(a) it is undergoing judicial management, winding up or provisional liquidation; or
(b) its assets consist wholly or substantially of cash or short dated securities as referred to in Rule 1017.
(2C) An issuer that is required by the Exchange to announce its quarterly financial statements must prominently include a statement on the cover page of its announcement of its quarterly financial statements that such an announcement is pursuant to an Exchange requirement.
(3)
If an issuer that is not required to comply with Rule 705(2) announces its quarterly financial statements in a format other than as set out in Appendix 7C, it must comply with Rule 705(3)(b)(ii).
(a) [Deleted]
(b) An issuer that is not required to comply with Rule 705(2) must either:
in each case immediately after the figures are available, but in any event not later than 45 days after the relevant financial period.(i) announce the financial statements for each of the first three quarters of its financial year (as set out in Appendix 7C); or
If an issuer that is not required to comply with Rule 705(2) announces its quarterly financial statements in a format other than as set out in Appendix 7C, it must comply with Rule 705(3)(b)(ii).
(3A) An issuer that prepares its financial statements under Rule 705 in accordance with Appendix 7C must also prepare such financial statements in accordance with the relevant accounting standards for interim financial reports under Singapore Financial Reporting Standards (International) ("SFRS(I)s"), or International Financial Reporting Standards ("IFRS"), or US Generally Accepted Accounting Principles ("US GAAP").
(4) Notwithstanding the foregoing, with respect to the first announcement to be made by the issuer pursuant to Rules 705 (1) or (2) following its listing on the Exchange, where the time period between the date of its listing and the final date for the issuer to make the relevant announcement pursuant to Rule 705(1) or (2) above is less than 30 days, the issuer shall have 30 days from the relevant deadline to make the relevant announcements of the financial statements provided that the following conditions are satisfied:
(a) the extension is announced by the issuer at the time of the issuer's listing; and
(b) in the announcement referred to in paragraph (a), the issuer must confirm that there is no material adverse change to the financial position of the issuer since the date of its offer document issued in connection with its listing on the Exchange.
(5) In the case of an announcement of interim financial statements (quarterly or half-yearly, as applicable, but excluding full year financial statements), an issuer's directors must provide a confirmation that, to the best of their knowledge, nothing has come to the attention of the board of directors which may render the interim financial statements to be false or misleading in any material aspect. In order to make this confirmation, directors would not be expected to commission an audit of these financial statements. The confirmation may be signed by 2 directors on behalf of the board of directors.
Use of funds/cash by Mineral, oil and gas companies
(6) Mineral, oil and gas companies whose principal activities consist of exploration for minerals, oil or gas, must:
(a) make a quarterly announcement on the use of funds/cash for the quarter and a projection on the use of funds/cash for the next immediate quarter, including material assumptions, immediately after the figures are available but in any event not later than 45 days after the first three quarters of the financial year and not later than 60 days after the last quarter;
(b) provide a confirmation by its directors that, to the best of their knowledge, nothing has come to their attention which may render such information provided false or misleading in any material aspect. In order to make this confirmation, the directors would not be expected to commission an external audit or review of the statements. The confirmation may be signed by 2 directors on behalf of the board of directors.
(7) In the announcements required by Rule 705(1) and (6), a mineral, oil and gas company must also include details of exploration (including geophysical surveys), development and/or production activities undertaken by the issuer and a summary of the expenditure incurred on those activities, including explanations for any material variances with previous projections, for the period under review. If there has been no exploration, development and/or production activity respectively, that fact must be stated.
Refer to Appendix 7D — Financial Statements and Dividend Announcements.
Amended on 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 27 September 201327 September 2013, 23 August 201823 August 2018, 7 February 20207 February 2020 and 12 February 2021.
706
In addition to the information required under Rule 705, the Exchange may require additional information to be disclosed.
706A
(1) An issuer must make a periodic announcement, in accordance with the timelines prescribed in Rule 705 on the announcement of its financial statements, on:
(a) any acquisition of:
(i) shares resulting in a company becoming a subsidiary or an associated company of the issuer; and
(ii) shares resulting in the issuer increasing its shareholding percentage in a subsidiary or an associated company; and
(b) any sale of:
(i) shares resulting in a company ceasing to be a subsidiary or an associated company of the issuer; and
(ii) shares resulting in the issuer reducing its shareholding percentage in a subsidiary or an associated company,
for the relevant financial period reported on under Rule 705.
(2) In the announcement required by Rule 706A, the issuer must, in respect of each acquisition or sale of shares, also include:
(a) the aggregate value of the consideration, stating the factors taken into account in arriving at it and how it will be satisfied, including the terms of payment; and
(b) in the case of unlisted shares, the net asset value represented by such shares and in the case of listed shares, the market value represented by such shares.
Added on 7 February 20207 February 2020.
707
(1) An issuer must hold its annual general meeting within four months from the end of its financial year.
(2) An issuer must issue its annual report to shareholders and the Exchange at least 14 days before the date of its annual general meeting.
(3) Notwithstanding Rules 707(1) and (2), with respect to the first annual general meeting immediately following the issuer's listing on the Exchange, where the time period between its listing on the Exchange and the final date for the issuer to hold its annual general meeting pursuant to Rule 707(1) above is less than 30 days, the issuer shall have 30 days from the relevant deadline to hold its annual general meeting, provided that:
(a) such an extension is permitted by and in accordance with all relevant laws and regulations governing the issuer in its place of constitution;
(b) the Exchange is notified of such an extension at the time of the issuer's listing;
(c) the extension is announced by the issuer at the time of the issuer's listing; and
(d) in the announcement referred to in paragraph (c) above, the issuer must confirm that:
(i) there is no material adverse change to the financial position of the issuer since the date of its offer document issued in connection with its listing on the Exchange; and
(ii) the extension is permitted by and in accordance with all relevant laws and regulations governing the issuer in its place of constitution.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
708
The chairman's statement (or equivalent) in the annual report must provide a balanced and readable summary of the issuer's performance and prospects, and should represent the collective view of the board. If the Chairman's statement does not represent the collective view of the board, the view of each dissenting director must be disclosed in the annual report.
709A
The annual financial statements must be: —
(a) prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)s"), or International Financial Reporting Standards ("IFRS"), or US Generally Accepted Accounting Principles ("US GAAP"); and
(b) audited by certified public accountants in accordance with Singapore Standards on Auditing, International Standards on Auditing, or US Generally Accepted Auditing Standards, as the case may be.
Added on 7 February 20207 February 2020 and Amended on 12 February 2021.
710
An issuer must describe in its annual report its corporate governance practices with specific reference to the principles and the provisions of the Code. An issuer must comply with the principles of the Code. Where an issuer's practices vary from any provisions of the Code, it must explicitly state, in its annual report, the provision from which it has varied, explain the reason for variation, and explain how the practices it had adopted are consistent with the intent of the relevant principle.
Amended on 1 January 20191 January 2019.
710A
(1) An issuer must maintain a board diversity policy that addresses gender, skills and experience, and any other relevant aspects of diversity.
(2) An issuer must describe in its annual report its board diversity policy, including the following:
(a) the issuer’s targets to achieve diversity on its board;
(b) the issuer’s accompanying plans and timelines for achieving the targets;
(c) the issuer’s progress towards achieving the targets within the timelines; and
(d) a description of how the combination of skills, talents, experience and diversity of its directors serves the needs and plans of the issuer.
Added on 1 January 2022.
711
An issuer may issue a summary financial statement in accordance with the Companies Act or any other applicable written law, regulation or code. However, the Exchange may require the issuer to disclose additional information.
Amended on 31 March 201731 March 2017.
711A
An issuer must issue a sustainability report for its financial year, no later than 4 months after the end of the financial year, or where the issuer has conducted external assurance on the sustainability report, no later than 5 months after the end of the financial year.
Added on 20 July 2016 and amended on 1 January 2022.
711B
- The sustainability report must describe the sustainability practices with reference to the following primary components:(a) material environmental, social and governance factors;
(aa) climate-related disclosures;
(b) policies, practices and performance;
(c) targets;
(d) sustainability reporting framework; and
(e) Board statement and associated governance structure for sustainability practices. - If the issuer excludes any primary component, it must disclose such exclusion and describe what it does instead, with reasons for doing so. An issuer must not exclude the primary component in Rule 711B(1)(aa).
- The issuer’s sustainability reporting process must be subject to internal review. The issuer may additionally commission an independent external assurance on the sustainability report.
- The primary component in Rule 711B(1)(aa) must comply with the requirements on climate-related disclosures set out in Practice Note 7F.
Added on 20 July 2016 and amended on 1 January 2022 and 1 January 2025.
712
(1) An issuer must appoint a suitable auditing firm to meet its audit obligations, having regard to the adequacy of the resources and experience of the auditing firm and the audit partner-in-charge assigned to the audit, the firm's other audit engagements, the size and complexity of the listed group being audited, and the number and experience of supervisory and professional staff assigned to the particular audit. A mineral, oil and gas company must appoint an auditing firm where the auditing firm and audit partner-in-charge have the relevant industry experience.
(2) The auditing firm appointed by the issuer must be:
(a) Approved under the Accountants Act. The audit partner-in-charge assigned to the audit must be a public accountant under the Accountants Act;
(b) Approved by, registered with and/or regulated by an independent audit oversight body acceptable to the Exchange. Such oversight bodies should be members of the International Forum of Independent Audit Regulators, independent of the accounting profession and directly responsible for the system of recurring inspection of accounting firms or are able to exercise oversight of inspections undertaken by professional bodies. Where applicable, the audit partner-in-charge assigned to the audit should be approved by, registered with or regulated by a relevant audit oversight body acceptable to the Exchange; or
(c) Any other auditing firm acceptable by the Exchange.
(2A) An issuer that appoints an auditing firm that meets the requirements in Rule 712(2)(b) must also appoint an additional auditing firm that meets the requirements in Rule 712(2)(a) to jointly audit its financial statements.
(3) A change in auditing firm or the proposed appointment of an additional auditing firm to meet requirements in Rule 712(2A) must be specifically approved by shareholders in a general meeting. The notice of meeting must incorporate, where applicable:
(a) confirmation from the outgoing auditors as to whether they are aware of any professional reasons why the new auditors should not accept appointment as auditors of the issuer, and if so, to provide reasons;
(b) confirmation from the issuer as to whether there were disagreements with the outgoing auditors on accounting treatments within the last 12 months, and if so, to provide details;
(c) confirmation from the issuer as to whether it is aware of any circumstances connected with the change of auditors that should be brought to the attention of the shareholders of the issuer;
(d) specific reasons for the change of auditors, including whether the outgoing auditors resigned, declined to stand for election, were dismissed or directed by the Exchange to be replaced under Rule 305(1)(eb);
(e) confirmation from the issuer that it complies with Rule 712 and Rule 715 or 716 in relation to the appointment of the new auditing firm; and
(f) explanation that the appointment of an additional auditing firm is to meet the Exchange’s requirements in Rule 712(2A).
Amended on 29 September 201129 September 2011, 23 August 201823 August 2018, 7 February 20207 February 2020 and 12 February 2021.
713
(1) An issuer must disclose in its annual report the date of appointment and the name of the audit partner in charge of auditing the issuer and its group of companies. The audit partner must not be in charge of more than 5 consecutive audits for a full financial year, the first audit being for the financial year beginning on or after 1 January 1997, regardless of the date of listing. The audit partner may return after two years.
(2) If the listing of an issuer occurs after 5 consecutive audits by the same audit partner in charge, the same audit partner may complete the audit of the financial year in which the issuer lists.
715
(1) Subject to Rule 716, an issuer must engage the same auditing firm based in Singapore to audit its accounts, and its Singapore-incorporated subsidiaries and significant associated companies.
(2) An issuer must engage a suitable auditing firm for its significant foreign-incorporated subsidiaries and associated companies.
Amended on 29 September 201129 September 2011.
716
An issuer may appoint different auditing firms for its subsidiaries or significant associated companies (referred to in Rule 715(1)) provided that:
(1) the issuer's board and audit committee are satisfied that the appointment would not compromise the standard and effectiveness of the audit of the issuer; or
(2) the issuer's subsidiary or associated company, is listed on a stock exchange.
Amended on 29 September 201129 September 2011.
717
An issuer must disclose in the annual report the names of the auditing firm(s) for its significant subsidiaries and associated companies.
Amended on 29 September 201129 September 2011.
719
Internal Controls and Risk Management Systems
(1) An issuer should have adequate and effective systems of internal controls (including financial, operational, compliance and information technology controls) and risk management systems. The audit committee may commission an independent audit on internal controls and risk management systems for its assurance, or where it is not satisfied with the systems of internal controls and risk management. In arriving at the decision, the audit committee should consider the recommendation of the continuing sponsor.
Suspected Fraud or Irregularity
(2) If the audit committee of an issuer becomes aware of any suspected fraud or irregularity, or suspected infringement of any Singapore laws or regulations or rules of the Exchange or any other regulatory authority in Singapore, which has or is likely to have a material impact on the issuer's operating results or financial position, the audit committee must discuss such matter with the external auditor and, at appropriate times, report the matter to the board and to the sponsor. The sponsor should inform the Exchange where necessary.
Internal Audit
(3) An issuer must establish and maintain on an ongoing basis, an effective internal audit function that is adequately resourced and independent of the activities it audits.
Amended on 29 September 201129 September 2011 and 1 January 20191 January 2019.
720 Directors and Management
(1) An issuer must procure undertakings to comply with the Rules from all its directors and executive officers (in the form set out at Appendix 7H) and submit the undertakings to the Exchange if required. An issuer must comply with Rule 406(3) on a continuing basis and consult its sponsor prior to making any changes to its board of directors. Without limiting the generality of the foregoing, where a director is disqualified from acting as a director in any jurisdiction for reasons other than on technical grounds, he must immediately resign from the board of directors of the issuer. An announcement containing the details in Appendix 7G must be made.
(2) (a) The Exchange may require an issuer to obtain the prior approval of the Exchange for the appointment or reappointment of a director, a chief executive officer and chief financial officer (or its equivalent rank)
(b) The circumstances under which the Exchange may effect Rule 720(2)(a) include but are not limited to:—
(i) Where the issuer is the subject of an investigation into the affairs of the issuer by a special auditor or an independent reviewer appointed by the issuer and/or the Exchange, or a regulatory or enforcement agency;
(ii) Where the integrity of the market may be adversely affected;
(iii) Where the Exchange thinks it necessary in the interests of the public or for the protection of investors; and
(iv) Where the issuer refused to extend cooperation to the Exchange on regulatory matters.
(c) The Exchange will give prior notice to the issuer where 2(a) is applicable.
(3) [deleted]
(4) An issuer must have all directors submit themselves for re-nomination and re-appointment at least once every three years.
(5) When a candidate is proposed to be appointed for the first time or re-elected to the board at a general meeting, the issuer shall provide the information relating to the candidate as set out in Appendix 7F in the notice of meeting, annual report or relevant circular distributed to shareholders prior to the general meeting. The issuer must announce the outcome of the shareholder vote in accordance with Rule 704(15).
(6) An issuer must have all directors undergo training on sustainability matters as prescribed by the Exchange. If the nominating committee is of the view that training is not required because the director has expertise in sustainability matters, the basis of its assessment must be disclosed.
Amended on 29 September 201129 September 2011, 29 September 201129 September 2011, 7 October 20157 October 2015, 1 January 20191 January 2019, 7 February 20207 February 2020, 1 August 2021 and 1 January 2022.
721
If an agreement has been entered into in connection with any acquisition or realisation of assets or any transaction outside the ordinary course of business of the issuer or its subsidiaries, and such an agreement has been disclosed publicly, the announcement must include a statement that a copy of the relevant agreement will be made available for inspection during normal business hours at the issuer's registered office for a period of 3 months from the date of the announcement.
723
An issuer must ensure that at least 10% of the total number of issued shares (excluding preference shares, convertible equity securities and treasury shares) in a class that is listed is at all times held by the public.
724
(1) If the percentage of securities held in public hands falls below 10%:
(a) The issuer must, as soon as practicable:
(i) notify its sponsor of that fact; and
(ii) announce that fact.
(b) The Exchange may suspend trading of the class, or all the securities of the issuer.
(2) The Exchange may allow the issuer a period of 3 months, or such longer period as the Exchange may agree, to raise the percentage of securities in public hands to at least 10%. The issuer may be removed from the Official List if it fails to restore the percentage of securities in public hands to at least 10% after the period.
Amended on 29 September 201129 September 2011 and 7 October 20157 October 2015.
725
An issuer must appoint two authorised representatives who must be either directors or a director and the company secretary.
Amended on 29 September 201129 September 2011.
726
The responsibilities of an authorised representative are as follows:
(1) To be the channel of communication between the Exchange and the issuer in circumstances where the Exchange needs to contact the issuer directly;
(2) To supply the Exchange with details in writing of how he or she can be contacted, including home and office telephone numbers and, where available, facsimile numbers. The issuer must notify the Exchange of any changes to such details;
(3) To ensure that whenever he or she is outside Singapore, suitable alternates are appointed, available and known to the Exchange, and to supply the Exchange with details in writing of how such alternates may be contacted, including their home and office telephone numbers and, where available, facsimile numbers; and
(4) Not to terminate his or her role as authorised representative before notifying the Exchange of:
(a) the proposed termination; and
(b) the name and relevant particulars of the replacement.
Amended on 29 September 201129 September 2011.
727
If the Exchange is not satisfied that the authorised representative is fulfilling his or her responsibilities adequately, it may require the issuer to terminate the appointment and appoint a replacement. The issuer must immediately notify the Exchange of the new authorised representative's appointment and relevant particulars.
Amended on 29 September 201129 September 2011.
728
(1) Where any borrowings or loans of the issuer or any of its subsidiaries contains any specified condition (as defined in Rule 704(33)), the issuer must obtain an undertaking from such controlling shareholder, to notify the issuer, as soon as it becomes aware, of any share pledging arrangements relating to these shares, and of any event which will be an event of default, an enforcement event or an event that would cause acceleration of the repayment of the principal amount of the loan or debt securities.
(2) Upon notification by the controlling shareholder(s), the issuer must immediately announce the following information: —
(a) The name of the shareholder;
(b) The class and number of shares and the percentage of the issuer's issued share capital excluding subsidiary holdings that is the subject of the security interest;
(c) The party or parties in whose favour the security interest is created or financial instrument given; and
(d) All other material details which are necessary for the understanding of the arrangements.
Added on 29 September 201129 September 2011 and amended on 31 March 201731 March 2017 and 7 February 20207 February 2020.
Restriction on Transfers of Securities
Added on 29 September 201129 September 2011 and amended on 7 February 20207 February 2020.
729
Where the trading of securities of an issuer is suspended, there must not be any transfers of securities, unless approved by the Exchange.
Added on 29 September 201129 September 2011.
730
If an issuer amends its Articles of Association or other constituent documents, they must be made consistent with all the Rules prevailing at the time of amendment.
Amended on 29 September 201129 September 2011.
730A
(1) An issuer shall hold all its general meetings in Singapore, unless prohibited by relevant laws and regulations in the jurisdiction of its incorporation.
(2) All resolutions at general meetings shall be voted by poll.
(3) At least one scrutineer shall be appointed for each general meeting. The appointed scrutineer(s) shall be independent of the persons undertaking the polling process. Where the appointed scrutineer is interested in the resolution(s) to be passed at the general meeting, it shall refrain from acting as the scrutineer for such resolution(s).
(4) The appointed scrutineer shall exercise the following duties:
(a) ensuring that satisfactory procedures of the voting process are in place before the general meeting; and
(b) directing and supervising the count of the votes cast through proxy and in person.
Added on 1 January 20141 January 2014 and amended on 1 August 20151 August 2015.
730B
An issuer must announce any change in its financial year end, stating the reasons for the change.
Added on 7 February 20207 February 2020.
731
An issuer must allot securities and despatch certificates within 10 market days of the closing date for applications to subscribe for a new issue of securities. The Exchange may, on the application of the issuer (through its sponsor), grant an extension of time.
Amended on 29 September 201129 September 2011.
732
An issuer must:
(1) accept for registration transfers of the issuer's securities executed on a standard form of transfer approved by the Exchange or on such other form as may be approved by the Exchange;
(2) issue certificates in requested denominations when requested by the transferee at the time of lodgement of registrable transfers;
(3) despatch within 10 market days after the day of lodgement of a registrable transfer, a certificate in respect of such securities and a balance certificate for any remainder;
(4) when so requested by the transferee at the time of lodgement of a registrable transfer, despatch the certificate in respect of those securities to the lodging broker;
(5) not refuse to register or fail to register or give effect to any registrable transfer in respect of securities issued by the issuer unless:
(a) registration of the transfer would result in a contravention of or failure to observe Singapore laws or the rules and requirements of the Exchange; or
(b) the transfer is in respect of a partly paid security for which a call has been made and is unpaid;
(6) endorse (where necessary) transfer forms with the notation "power of attorney exhibited" or "probate exhibited" on production of the proper documents and do so without charge;
(7) split certificates within 5 market days or certify transfers within 2 market days on lodgement of the relevant certificates as follows:
"Certificate No. . ...... is held in the Company's office against this transfer No.
.......................... for ........................ on the .............. Register. This transfer must be completed and returned within forty-two days from this date, .......
Name of Company
Official Signature(s)"
"Certificate No. . ...... is held in the Company's office against this transfer No.
.......................... for ........................ on the .............. Register. This transfer must be completed and returned within forty-two days from this date, .......
Name of Company
Official Signature(s)"
(8) split provisional allotment letters within 2 market days.
Amended on 29 September 201129 September 2011.
733
If in the exercise of its rights under Rule 732(5), an issuer refuses to register a transfer of a security, it must give to the lodging party written notice of the refusal and the precise reasons therefore within 10 market days after the date on which the transfer was lodged with the issuer.
Amended on 29 September 201129 September 2011.
734
An issuer must not charge more than $2.00 for each certificate issued.
Amended on 29 September 201129 September 2011.
735
The number of securities represented by any certificate must be clearly shown in words and figures on the face of the certificate or in such other manner as may be approved by the Exchange.
Amended on 29 September 201129 September 2011.
736
Any certificates should be designed so that forgery and/or alterations are readily detectable. The printing of securities certificates must be entrusted to recognised security printers. The paper for securities must be first class bond or banknote paper containing a watermark of the printer or issuer. If more than one class of securities are listed on the Exchange, the colour of the certificates for each class of securities must be distinctly different. Where an issuer's Articles of Association restrict the percentage of shares held in foreign hands and the shares of the issuer are accordingly designated as foreign shares or local shares, such foreign shares and local shares are considered to be two separate classes of shares for the purpose of this rule.
Amended on 29 September 201129 September 2011.
737 Proxy Forms
Proxy forms must be designed in a manner that will allow a shareholder appointing a proxy to indicate how the shareholder would like the proxy to vote (whether to vote in favour of or against, or to abstain from voting) in relation to each resolution.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
738
An issuer must give the Exchange, or any member company upon request, an extract of the stock or share register. This must show details on or between the named date or dates of all entries relating to the registration or transfer of stock and shares, including particulars of the relevant certificate numbers and the names into which or from which any particular stock or shares may have been transferred. Where the issuer's securities are traded on the scripless system, the issuer authorises CDP to provide the Exchange, at the Exchange's request, with an extract of the issuer's securities held in each securities account maintained by CDP, in such detail as may be required by the Exchange.
Amended on 29 September 201129 September 2011.
739
An issuer must permit its securities to be transferred to CDP or from a main register to a branch register (and vice versa) without restriction.
Amended on 29 September 201129 September 2011.
740
A document given to the Exchange by an entity or its sponsor, or on its or its sponsor's behalf, becomes and remains the property of the Exchange to deal with as it wishes, including copying, storing in a retrieval system, transmitting and selling to the public, and publishing any part of the document and permitting others to do so. The documents referred to in this rule include a document given to the Exchange in support of a listing application or in compliance with the listing rules.
Amended on 29 September 201129 September 2011.
741
Documents for overseas shareholders shall be forwarded by air or by facsimile transmission or, in another way that ensures that the documents will be received quickly.
Amended on 29 September 201129 September 2011.
742
Where an issue of securities is to be made overseas and is supported by an Offer Document, a prospectus or other public documents, the Offer Document, prospectus or other public documents must be submitted to the Exchange in English. Such documents must be endorsed "Specimen — For information only".
Amended on 29 September 201129 September 2011.
743
An issuer (through its sponsor) must supply the Exchange with such number of final printed copies as the Exchange may require from time to time (and one soft copy in such format as the Exchange may require) of the following documents for public release:
(1) all periodic and special reports, circulars, etc., released or issued by the issuer for the information of holders of any of the issuer's listed securities; and
(2) the published accounts of the issuer and all documents annexed thereto, as soon as issued.
Amended on 29 September 201129 September 2011, 29 September 201129 September 2011 and 7 February 20207 February 2020.
744
Rule 743 does not apply to an announcement released to the Exchange via SGXNET.
Amended on 29 September 201129 September 2011.
745
An issuer must ensure that its directors accept responsibility, collectively and individually, for the issuer's compliance with the Rules.
Amended on 29 September 201129 September 2011.
746
(1) An issuer must retain a sponsor at all times. If a sponsor undertakes introducing activities for an issuer, the issuer must retain it as continuing sponsor for at least 3 years after admission of the listing applicant, or the enlarged group (in the case of a very substantial acquisition or reverse takeover).
(2) An issuer must have only one sponsor at a time.
(3) If an issuer requires a professional to provide corporate finance advice in relation to any corporate action, it may engage:
(a) its sponsor to provide such advice; or
(b) notwithstanding Rule 746(2), any other sponsor authorised by the Exchange to provide such advice, while the continuing sponsor of the issuer retains overall management and responsibility for the corporate action.
(4) If an issuer does not have a sponsor undertaking continuing activities for it, the Exchange will suspend the issuer until a sponsor takes on the activity.
(5) The Exchange may remove an issuer from the Official List that does not have a sponsor for more than 3 continuous months.
Amended on 29 September 201129 September 2011 and 7 October 20157 October 2015.
747
(1) Dealings between the Exchange and the issuer will be conducted through the sponsor.
(2) However, the Exchange may deal directly with the issuer if, in its opinion, circumstances warrant.
Amended on 29 September 201129 September 2011.
748
An issuer must ensure:
(1) that its written contract with its sponsor includes the minimum terms to the effect of Appendix 7E; and
Refer to Appendix 7E — Minimum Terms of Sponsorship.
Refer to Appendix 7E — Minimum Terms of Sponsorship.
(2) the mandate it gives its sponsor is sufficient to enable the sponsor to fully discharge its obligations under these rules.
Amended on 29 September 201129 September 2011.
749
If asked, an issuer must allow its sponsor, in the performance of its obligations as a sponsor to:
(1) peruse any records, documents, and financial or other information; and
(2) have access to its premises or other places where its records are kept; and
(3) speak to any director, officer or any other employee whom the sponsor considers relevant; and
(4) speak to the issuer's auditor.
Amended on 29 September 201129 September 2011.
750
An issuer must:
(1) ensure that its directors and officers provide reasonable assistance to the sponsor; and
(2) authorise its auditor to provide reasonable assistance to the sponsor.
Amended on 29 September 201129 September 2011.
751
(1) The Exchange may at any time and for any reason resume supervision (in full or in part) of an issuer on Catalist.
(2) The Exchange will not normally exercise this power unless exceptional circumstances exist.
Amended on 29 September 201129 September 2011.
752
An issuer must keep records of its consultations with its sponsor for at least 6 years. The records must be sufficient to establish an audit trail of key discussions, advice and decisions involving it and its sponsor and the basis for the advice and decisions.
Amended on 29 September 201129 September 2011.
753
(1) An issuer must consult its sponsor about all material matters relating to compliance with the Rules, its listing and the quotation of its securities.
(2) Without limiting Rule 753(1), an issuer must consult its sponsor on documents to be released to shareholders or to the market (including announcements, resolutions contained in notices of meetings, circulars and corporate actions) before release, to ensure that such documents are in compliance with the Rules and proper disclosure will be made. The document must display prominently the following on the front cover:
This document has been reviewed by the Company's Sponsor, [full name of Sponsor]. It has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.
The contact person for the Sponsor is [full name], [contact details].
Amended on 29 September 201129 September 2011.
801
This Chapter deals with issuers on Catalist changing their capital either by issuing additional equity securities or adjusting existing capital. It also sets out the requirements and procedures for listing additional equity securities.
Unless otherwise stated, the provisions in this Chapter will apply to the issue of shares out of treasury, and the issuer must submit to the Exchange a confirmation of compliance with the relevant provisions of this Chapter.
Amended on 7 February 20207 February 2020.803
An issuer must not issue securities to transfer a controlling interest without prior approval of shareholders in general meeting.
804
Except in the case of an issue made on a pro rata basis to shareholders or a scheme referred to in Part VIII of this Chapter, no director of an issuer, or associate of the director, may participate directly or indirectly in an issue of equity securities or convertible securities unless shareholders in general meeting have approved the specific allotment. Such directors and associates must abstain from exercising any voting rights on the matter. The notice of meeting must state:
(1) the number of securities to be allotted to each director and associate;
(2) the precise terms of the issue; and
(3) that such directors and associates will abstain from exercising any voting rights on the resolution.
805
Except as provided in Rule 806, an issuer must obtain the prior approval of shareholders in general meeting for the following:
(1) The issue of shares or convertible securities or the grant of options carrying rights to subscribe for shares of the issuer; or
(2) If a principal subsidiary of an issuer issues shares or convertible securities or options that will or may result in:
(a) the principal subsidiary ceasing to be a subsidiary of the issuer; or
(b) a percentage reduction of 20% or more of the issuer's equity interest in the principal subsidiary. For example, if the issuer has a 70% interest in a principal subsidiary, shareholder approval will be required for any issue of shares in the principal subsidiary reducing the issuer's equity interest to 56%.
806
(1) Subject to Rule 803, approval by an issuer's shareholders under Rule 805(1) is not required if shareholders had, by resolution in a general meeting, given a general mandate to the directors of the issuer, either unconditionally or on such conditions to issue:
(a) shares; or
(b) convertible securities; or
(c) additional convertible securities issued pursuant to Rule 829, notwithstanding that the general mandate may have ceased to be in force at the time the securities are issued, provided that the adjustment does not give the holder a benefit that a shareholder does not receive; or
(d) shares arising from the conversion of the securities in (b) and (c), notwithstanding that the general mandate may have ceased to be in force at the time the shares are to be issued.
(2) A general mandate must limit the aggregate number of shares and convertible securities that may be issued according to the limits in Rules 806(2)(a) and (b) below. Unless prior shareholder approval is required under the Rules, an issue of treasury shares will not require further shareholder approval, and will not be included in the following limits.
(a) If shareholders approve the mandate by ordinary resolution, the limit must be not more than 100% of the total number of issued shares excluding treasury shares and subsidiary holdings, of which the aggregate number of shares and convertible securities issued other than on a pro rata basis to existing shareholders must be not more than 50% of the total number of issued shares excluding treasury shares and subsidiary holdings; or
(b) If shareholders approve the mandate by special resolution, the limit on the aggregate number of shares and convertible securities issued, whether on a pro rata or non pro rata basis, may be up to 100% of the total number of issued shares excluding treasury shares and subsidiary holdings. Shareholder approval under this Rule 806(2)(b) must not be deemed by way of subscription for shares.
(3) For the purpose of Rule 806(2), the percentage of the total number of issued shares excluding treasury shares and subsidiary holdings is based on the issuer's total number of issued shares excluding treasury shares and subsidiary holdings at the time of the passing of the resolution approving the mandate after adjusting for:
(a) new shares arising from the conversion or exercise of convertible securities;
(b) new shares arising from exercising share options or vesting of share awards, provided the options or awards were granted in compliance with Part VIII of Chapter 8; and
(c) any subsequent bonus issue, consolidation or subdivision of shares.
Adjustments in accordance with Rule 806(3)(a) or Rule 806(3)(b) are only to be made in respect of new shares arising from convertible securities, share options or share awards which were issued and outstanding or subsisting at the time of the passing of the resolution approving the mandate.
(4) If the general mandate is obtained before listing, the issuer may treat its post-invitation total number of issued shares excluding treasury shares and subsidiary holdings as its total number of issued shares excluding treasury shares and subsidiary holdings for the purpose of Rule 806(3).
(5) An issuer cannot rely on the general mandate for an issue of convertible securities if the maximum number of shares to be issued upon conversion cannot be determined at the time of issue of the convertible securities.
(6) A general mandate may remain in force until the earlier of the following:
(a) the conclusion of the first annual general meeting of the issuer following the passing of the resolution. By a resolution passed at that meeting, the mandate may be renewed, either unconditionally or subject to conditions; or
(b) it is revoked or varied by ordinary resolution of the shareholders in general meeting.
Amended on 31 March 201731 March 2017 and 7 February 20207 February 2020.
807
If shareholders of an issuer are offered a specific entitlement in a new issue of securities of the issuer's subsidiary or in securities of the issuer's subsidiary about to be floated, such entitlement must be on a pro-rata basis with no restriction on the number of shares held before entitlements accrue.
Amended on 29 September 201129 September 2011.
808
Once the basis of an entitlement is declared, the issuer must not make any alterations to such entitlement except with the approval of the Exchange.
Part IV Issue of Shares, Company Warrants and Convertible Securities for Cash (Other than Rights Issue)
809
An issuer may issue shares, company warrants or other convertible securities for cash other than by way of a rights issue.
810
(1) An issuer which intends to issue shares, company warrants or other convertible securities for cash must announce the issue promptly. The announcement must include the following:
(a) the terms of the issue and the purpose of the issue including:
(i) the identity of the placement agent appointed or to be appointed for the issue, where applicable;
(ii) the amount of proceeds proposed to be raised from the issue; and
(iii) the intended use of such proceeds on a percentage allocation basis (which could be expressed as a range if the exact allocation has not been determined).
(b) where the issue is proposed to be used mainly for general working capital purposes, the issuer must provide reasons for such use taking into account its working capital position;
(c) whether the issuer's directors are of the opinion that, after taking into consideration:
(i) the present bank facilities, the working capital available to the group is sufficient to meet its present requirements and if so, the directors must provide reasons for the issue; and
(ii) the present bank facilities and net proceeds of the issue, the working capital available to the group is sufficient to meet its present requirements; and
(d) whether it has obtained a listing and quotation notice from the Exchange or will be seeking the listing and quotation of the new shares arising from the issue.
(2) Where no placement agent is appointed for the issue or where a placement agent is appointed but is subject to any restrictions and directions imposed by the issuer regarding the identities of and/or the allocation to the placees, the issuer must also include in its announcement:
(a) the identities of the placees and the number of shares placed to each of them;
(b) details on how the placees were identified and the rationale for placing to them; and
(c) the restrictions and/or directions imposed on the placement agent by the issuer regarding the identities of and/or the allocation to the placees, where applicable.
Amended on 29 September 201129 September 2011.
811
(1) An issue of shares must not be priced at more than 10% discount to the weighted average price for trades done on the Exchange for the full market day on which the placement or subscription agreement is signed. If trading in the issuer's shares is not available for a full market day, the weighted average price must be based on the trades done on the preceding market day up to the time the placement agreement is signed.
(2) An issue of company warrants or other convertible securities is subject to the following requirements:
(a) If the conversion price is fixed, the price must not be more than 10% discount to the prevailing market price of the underlying shares prior to the signing of the placement or subscription agreement.
(b) If the conversion price is based on a formula, any discount in the price-fixing formula must not be more than 10% of the prevailing market price of the underlying shares before conversion.
(3) Rule 811(1) and (2) is not applicable if specific shareholder approval is obtained for the issue of shares, company warrants or other convertible securities.
(4) Where specific shareholders' approval is sought, the circular must include the following:
(a) information required under Rule 810; and
(b) the basis upon which the discount was determined.
Amended on 29 September 201129 September 2011.
812
(1) An issue must not be placed to any of the following persons:
(a) the issuer's directors and substantial shareholders;
(b) immediate family members of the directors and substantial shareholders;
(c) substantial shareholders, related companies (as defined in Section 6 of the Companies Act), associated companies and sister companies of the issuer's substantial shareholders;
(d) corporations in whose shares the issuer's directors and substantial shareholders have an aggregate interest of at least 10%; or
(e) any person who, in the opinion of the Exchange, falls within category (a) to (d).
(2) Rule 812(1) will not apply if specific shareholder approval for such a placement has been obtained. The person, and its associates, must abstain from voting on the resolution approving the placement.
(3) Rule 812(1)(a) will not apply provided that:
(a) The substantial shareholder:
(i) does not have representation (whether directly or indirectly through a nominee) on the board of the issuer;
(ii) does not have control or influence over the issuer in connection with the day-to-day affairs of the issuer and the terms of the placement;
(b) The placement is effected through an independent process such as book-building;
(c) The placement is made to more than one placee; and
(d) The proportion of issued shares of the issuer held by the substantial shareholder immediately after the placement is not more than the proportion of issued shares of the issuer held by it immediately before such a placement.
An issuer (through its sponsor) should consult and clarify with the Exchange in the event of any uncertainty.
(4) The Exchange may agree to a placement to a person in Rule 812(1)(b), (c) or (d) if it is satisfied that the person is independent and is not under the control or influence of any of the issuer's directors or substantial shareholders.
Amended on 29 September 201129 September 2011.
813
An issuer may borrow shares from its substantial shareholder to facilitate an issue of shares for cash provided that the substantial shareholder does not receive any financial benefit (directly or indirectly) from the arrangement.
814
(1) An issuer which intends to make a rights issue must announce (having regard to Rule 704(24)) the issue promptly. The announcement must include the following:
(a) on the first page, to be presented in the following format:
| Principal Terms of the Issue | Description |
| Price | |
| Discount (specifying benchmarks and periods) | |
| Allotment Ratio | |
| Use of Proceeds | |
| Purpose of Issue |
(b) terms of the issue;
(c) the amount of proceeds proposed to be raised from the issue;
(d) the intended use of such proceeds on a percentage allocation basis (which could be expressed as a range if the exact allocation has not been determined);
(e) where the issue is proposed to be used mainly for general working capital purposes, the issuer must provide reasons for such use taking into account its working capital position;
(f) whether the issuer's directors are of the opinion that, after taking into consideration:
(i) the group's present bank facilities, the working capital available to the group is sufficient to meet its present requirements and if so, the directors must provide reasons for the issue; and
(ii) the group's present bank facilities and the net proceeds of the issue, the working capital available to the group is sufficient to meet its present requirements, unless the directors have opined, pursuant to Rule 814(1)(f)(i) above, that, after taking into consideration the group's present bank facilities, the working capital available to the group is sufficient to meet its present requirements.
"Present requirements" in this Rule 814(1)(f) includes the transaction which will be funded (in whole or in part) by the net proceeds of the issue;
(g) whether the issue will be underwritten;
(h) the financial circumstances which call for the issue;
(i) whether it has obtained a listing and quotation notice from the Exchange or will be seeking the listing and quotation of the new shares arising from the rights issue;
(j) a statement from the issuer's directors on why the issue is in the interest of the issuer and their basis for forming such views including the factors taken into consideration in arriving at any discount; and
(k) if the issuer undertakes the issue within 12 months from its previous equity fund raising, the following details of each fund raising exercise undertaken in the past 12 months:
(i) description of equity funds raised;
(ii) date of issue of new securities;
(iii) amount raised (both gross and net);
(iv) amount utilised and breakdown on use of proceeds; and
(v) amount not utilised and how it is intended to be used.
The issuer should make a negative statement if there is no such previous equity fund raising.
In addition, an issuer must observe the disclosure requirements in Appendix 8A.
(2) If a rights issue involves an issue of convertible securities, the issuer must also comply with Part VI of this Chapter.
Refer to Appendix 8A — Disclosure Requirements for Rights Issue or Bought Deals.
(3) In the allotment of any excess rights shares, a confirmation to the sponsor that preference will be given to the rounding of odd lots. Directors and substantial shareholders who have control or influence over the issuer in connection with the day-to-day affairs of the issuer or the terms of the rights issue, or have representation (direct or through a nominee) on the board of the issuer will rank last in priority for the rounding of odd lots and allotment of excess rights shares.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
816
(1) Subject to Rule 816(2), a rights issue must provide for the rights to subscribe for securities to be renounceable in part or in whole in favour of a third party at the option of the entitled shareholders.
(2)
(a) An issuer can undertake non-renounceable rights issues:—
(i) subject to specific shareholders' approval; or
(ii) in reliance on the general mandate to issue rights shares in a non-renounceable rights issue if the rights shares are priced at not more than 10% discount to the weighted average price for trades done on the Exchange for the full market day on which the rights issue is announced. If trading in the issuer's shares is not available for a full market day, the weighted average price must be based on the trades done on the preceding market day up to the time the rights issue is announced.
(b) The non-renounceable rights issue must comply with Part V of Chapter 8 except Rule 816(1).
Amended on 1 January 20111 January 2011.
817
An issuer may make a rights issue with or without underwriting. Generally, it is for the issuer to decide whether its rights issue is to be underwritten.
818
In the case of a rights issue that is underwritten, any force majeure clause in the underwriting agreement cannot be invoked after the commencement of ex-rights trading.
819
(1) An issuer must seek the Exchange's prior approval if it decides to proceed with a rights issue without underwriting because the force majeure clause in the underwriting agreement was invoked before commencement of ex-rights trading.
(2) Upon receipt of the Exchange's approval, the issuer must announce immediately that the rights issue will proceed without underwriting.
820
The following requirements apply to a rights issue that is not underwritten:
(1) The rights issue cannot be withdrawn after the commencement of ex-rights trading.
(2) The Exchange may permit the issuer to scale down a shareholder's application to subscribe for the rights issue to avoid placing the shareholder in the position of incurring a mandatory bid obligation under the Takeover Code as a result of other shareholders not taking up their rights entitlement fully.
821
No record date must be fixed until the Exchange has issued a listing and quotation notice in respect of the rights issue.
Amended on 7 February 20207 February 2020.
822
An issuer must issue the following to persons entitled within 3 market days (within 5 market days in the case of a scrip counter), or such longer period as the Exchange may approve, after a record date:
(1) Letter of Entitlement, if any;
(2) Application Forms for rights shares and excess rights shares ("ARE"). In the case of a rights issue of warrants, warrant and excess warrants application form ("WAF" or "WEWAF");
(3) Provisional Allotment Letters ("PALs") for shareholders whose names appear on the share register, incorporating item (2) as well as:
(a) Form of Acceptance;
(b) Request for Splits;
(c) Form of Renunciation;
(d) Form of Nomination;
(e) Excess Shares Application Form; and
(4) Such other documents as the Exchange may require.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
823
(1) An issuer making a rights issue must, having regard to Practice Note 8A, provide a proposed time-table to the Exchange showing the following dates:
(a) record date to determine rights entitlement;
(b) commencement of trading of nil-paid rights;
(c) last day for exercise and payment of rights; and
(d) last day for receipt and acceptance of SRAFs.
(2) An issuer making a rights issue must observe any time-table published by the Exchange.
Refer to Practice Note 8A — Rights Issue Timetable.
Amended on 7 February 20207 February 2020.
824
Every issue of company warrants or other convertible securities not covered under a general mandate must be specifically approved by shareholders in general meeting.
825
In procuring the approval of shareholders in a general meeting, the circular to the shareholders must include the recommendation(s) of the board of directors of the issuer on such an issue of company warrants or convertible securities and the basis for such recommendation(s).
Amended on 29 September 201129 September 2011.
826
When listing company warrants or other convertible securities, the issuer should ensure a sufficient spread of holdings to provide for an orderly market in the securities. As a guide, the Exchange expects at least 100 warrantholders for a class of company warrants.
827
Company warrants or other convertible securities may be listed only if the underlying securities are (or will become at the same time) one of the following:
(1) A class of equity securities listed on the Exchange.
(2) A class of equity securities listed or dealt in on a stock market approved by the Exchange.
828
Each company warrant must:
(1) give the registered holder the right to subscribe for or buy one share of the issuer; and
(2) not be expressed in terms of dollar value.
Amended on 31 March 201731 March 2017.
829
The terms of the issue must provide for:
(1) adjustment to the exercise price or conversion price and, where appropriate, the number of company warrants or other convertible securities, in the event of a rights issue, bonus issue or subdivision or consolidation of shares, setting out the specific formula;
(2) the expiry of the company warrants or other convertible securities to be announced, and notice of expiry to be sent to all holders of the company warrants or other convertible securities at least 1 month before the expiration date; and
(3) any material amendment to the terms of the company warrants or other convertible securities after issue to the advantage of the holders of such securities to be approved by shareholders, except where the amendment is made pursuant to the terms of the issue.
Amended on 7 February 20207 February 2020.
830
An issuer must announce any adjustment or amendment made to the terms of the issue. In the case of an adjustment, the announcement must state the specific formula, whether the adjustment has been reviewed to be in accordance with the formula, the identity of the reviewer and its relationship to the issuer.
Amended on 7 February 20207 February 2020.
831
(1) An issuer must not:
(a) extend the exercise period of an existing company warrant; or
(b) issue a new company warrant to replace an existing company warrant.
(2) Except where the adjustments are made pursuant to the terms of the issue, an issuer must not:
(a) change the exercise price of an existing company warrant; or
(b) change the exercise ratio of an existing company warrant.
Amended on 7 February 20207 February 2020.
832
A circular or notice to be sent to shareholders in connection with a general meeting to approve the issue of company warrants or other convertible securities must include at least the following information:
(1) The maximum number of the underlying securities which would be issued or transferred on exercise or conversion of the company warrants or other convertible securities.
(2) The period during which the company warrants or other convertible securities may be exercised and the dates when this right commences and expires.
(3) The amount payable on the exercise of the company warrants or other convertible securities.
(4) The arrangements for transfer or transmission of the company warrants or other convertible securities.
(5) The rights of the holders on the liquidation of the issuer.
(6) The arrangements for the variation in the subscription or purchase price and in the number of company warrants or other convertible securities in the event of alterations to the share capital of the issuer.
(7) The rights (if any) of the holders to participate in any distributions and/or offers of further securities made by the issuer.
(8) A summary of any other material terms of the company warrants or other convertible securities.
(9) The purpose for and use of proceeds of the issue, including the use of future proceeds arising from the conversion/exercise of the company warrants or other convertible securities.
(10) The financial effects of the issue to the issuer.
833
The following additional requirements apply to an offer of company warrants or other convertible securities by way of a rights issue or bought deal:
(1) The issuer's announcement of the rights issue or bought deal must include either:
(a) the exercise or conversion price of the company warrants or other convertible securities, or
(b) a price-fixing formula to determine the exercise or conversion price. The price-fixing formula must not contain any discretionary element and the amount of premium or discount (in relation to the underlying share price) must be specified.
(2) Where a price-fixing formula is adopted:
(a) if the issue is not underwritten, the issuer must fix and announce the exercise or conversion price before the close of the offer; or
(b) if the issue is underwritten, the issuer must fix and announce the exercise or conversion price before the commencement of nil-paid rights trading.
(3) An offer of company warrants or convertible securities by way of a bought deal must comply with Part V of this Chapter.
834
For the purpose of this Part, a "bought deal" is an issue of company warrants or other convertible securities to a financial institution which will in turn offer them to the issuer's shareholders on a pro-rata basis, usually in conjunction with a loan facility provided by that financial institution to the issuer.
Part VII Bonus Issues and Subdivision and Consolidation of Shares
Amended on 7 February 20207 February 2020.
836
An issuer that intends to make a bonus issue must promptly make an announcement, stating the following:
(1) the terms of the bonus issue; and
(2) whether the Exchange's approval is required and has been obtained.
Amended on 7 February 20207 February 2020.
836A
An issuer that intends to undertake a subdivision or consolidation of shares must:
(1) promptly make an announcement, stating the terms of the subdivision or consolidation;
(2) make an application for the listing of the subdivided or consolidated shares in accordance with the requirements for the listing of additional securities in this Chapter; and
(3) obtain specific shareholder approval for the subdivision or consolidation.
Added on 7 February 20207 February 2020.
837
No record date must be fixed until the Exchange has issued a listing and quotation notice in respect of the bonus issue or subdivision or consolidation of shares.
Amended on 7 February 20207 February 2020.
838
The daily weighted average price of an issuer's quoted securities, adjusted for the bonus issue or subdivision of shares ("adjusted price"), must not be less than $0.20, taking into account the issuer's adjusted price for the month preceding the application date.
Amended on 7 February 20207 February 2020.
839
An issuer making a bonus issue or subdivision of shares must state in the shareholder circular (if required) whether it expects to maintain the quantum of dividend declared and paid in the previous year.
Amended on 7 February 20207 February 2020.
840
An issuer must not capitalise:
(1) more than 50% of the amount standing in the revaluation reserve account; and
(2) any surplus arising from the revaluation of fixed assets such as plant and machinery.
842
(1) An issuer's subsidiaries must also comply with Rules 843 to 860 in relation to share option schemes or share schemes implemented by them.
(2) Rule 842(1) does not apply to the share option scheme or share scheme of an issuer's subsidiary which is listed on an approved exchange that has rules which safeguard the interests of shareholders according to similar principles in Part VIII.
(3) The approval of an issuer's shareholders must be obtained for any share option scheme or share scheme implemented by:
(a) the issuer; and
(b) a principal subsidiary of the issuer if the scheme may cause Rule 805(2) to apply.
(4) If shareholder approval is not required pursuant to Rule 842(3), an issuer must announce the principal terms of any such share option scheme or share scheme implemented by its subsidiaries.
843
Participation in a scheme must be restricted to directors and employees of the issuer and its subsidiaries, except that:
(1) directors and employees of an associated company of the issuer may participate in the scheme if the issuer has control over the associated company.
(2) directors and employees of the issuer's parent company and its subsidiaries who have contributed to the success and development of the issuer may participate in the scheme.
844
A limit on the size of each scheme, the maximum entitlement for each class or category of participant (where applicable), and the maximum entitlement for any one participant (where applicable) must be stated.
845
The amount, if any, payable on application or acceptance, the period in or after which payments or calls, or loans to provide the same, may be paid or called must be set out.
846
The exercise price of options to be granted must be set out. Options granted at a discount may be exercisable after 2 years from the date of grant. Other options may be exercisable after one year from the date of grant.
847
The voting, dividend, transfer and other rights attached to the securities, including those arising from a liquidation of the issuer must be stated.
848
The scheme must be administered by a committee of directors of the issuer. However, where the issuer has a parent company, the parent company may nominate one person to the committee. A participant who is a member of the committee must not be involved in its deliberations in respect of options to be granted to that participant.
849
(1) A scheme must provide for adjustment of the subscription or option price or the number or amount of securities under the scheme not already allotted, in the event of a bonus issue and other circumstances (e.g. rights issue, capital reduction, subdivision or consolidation of shares or distribution).
(2) The adjustment must be made in such a way that a participant will not receive a benefit that a shareholder does not receive.
(3) The issue of securities as consideration for an acquisition will normally not be regarded as a circumstance requiring adjustment.
(4) Adjustments other than on a bonus issue must be confirmed in writing by the company's auditors to be fair and reasonable.
Amended on 7 February 20207 February 2020.
851
(1) An issuer must provide in the scheme that the following disclosure will be made in its annual report:
(a) The names of the members of the committee administering the scheme.
(b) The information required in the table below for the following participants:
(i) directors of the issuer;
(ii) participants who are controlling shareholders of the issuer and their associates; and
(iii) participants, other than those in Rule 851(1)(b)(i) and (ii) above, who receive 5% or more of the total number of options available under the scheme;
| Name of participant | Options granted during financial year under review (including terms) | Aggregate options granted since commencement of scheme to end of financial year under review | Aggregate options exercised since commencement of scheme to end of financial year under review | Aggregate options outstanding as at end of financial year under review |
(c) In respect of options granted to directors and employees of the parent company and its subsidiaries:
(i) The names of and number and terms of options granted to each director or employee of the parent company and its subsidiaries who receives 5% or more of the total number of options available to all directors and employees of the parent company and its subsidiaries under the scheme, during the financial year under review; and
(ii) The aggregate number of options granted to the directors and employees of the parent company and its subsidiaries for the financial year under review, and since the commencement of the scheme to the end of the financial year under review.
(d) The number and proportion of options granted at a discount during the financial year under review in respect of every 10% discount range, up to the maximum quantum of discount granted.
(2) If any of the requirements in Rule 851(1) is not applicable, an appropriate negative statement must be included.
852
Participation in a scheme by controlling shareholders and their associates must be approved by independent shareholders of the issuer. A separate resolution must be passed for each person and to approve the actual number and terms of options to be granted to that participant.
853
Any grant of options to a director or employee of the issuer's parent company and its subsidiaries that, together with options already granted to the person under the scheme, represents 5% or more of the total number of options available to such directors and employees, must be approved by independent shareholders. A separate resolution must be passed for each such person and to approve the aggregate number of options to be made available for grant to all directors and employees of the parent company and its subsidiaries.
854
When seeking shareholder approval, an issuer must explain the basis for the following in the circular:
(1) Participation by, and the specific grant of options to, each of the controlling shareholders or their associates;
(2) Participation by, and the grant of options to, directors and employees of the parent company and its subsidiaries;
(3) Participation by non-executive directors;
(4) Participation by directors and employees of the associated companies;
(5) Discount quantum; and
(6) Size of the scheme.
855
An issuer must briefly describe in the circular the potential cost to it arising from the grant of options.
856
(1) An issuer must disclose the terms of the scheme or a summary of the principal terms in the circular. The summary must contain all the information required under Rules 843 to 848, and Rules 852 to 853.
(2) If only a summary is disclosed, the issuer must make the terms of the scheme available for inspection at its registered office for at least 14 days before the date of the general meeting.
857
Where directors of the issuer are trustees of the scheme or have an interest direct or indirect in the scheme, the circular must disclose that interest.
858
Shareholders who are eligible to participate in the scheme must abstain from voting on any resolution relating to the scheme (other than a resolution relating to the participation of, or grant of options to, directors and employees of the issuer's parent company and its subsidiaries).
859
The following categories of persons must abstain from voting on any resolution relating to the participation of, or grant of options to, directors and employees of the parent company and its subsidiaries:
(1) the parent company (and its associates); and
(2) directors and employees of the parent company (and its subsidiaries), who are also shareholders and are eligible to participate in the scheme.
860
If options have been granted under a previous scheme, the circular to shareholders seeking approval for the new scheme must disclose the following about the previous scheme:
(1) total numbers of shares reserved and allotted;
(2) number of participants;
(3) any material conditions to which the options are subject; and
(4) the following details of options granted to directors of the issuer, and participants who are controlling shareholders and their associates:
(a) dates options were granted;
(b) number of shares offered under the options; and
(c) number of shares allotted upon exercise of options.
861
Any scheme which enables shareholders to elect to receive shares in lieu of the cash amount of any dividend must comply with the following:
(1) The scheme must be announced via SGXNET. The announcement must state the following:
(a) any tax advantage if a shareholder elects to receive shares in lieu of cash, or an appropriate negative statement;
(b) whether a shareholder who elects to receive shares may receive odd lots;
(c) that a shareholder who will breach any shareholding restriction imposed by Singapore law or prescribed in the Articles of Association of the issuer by receiving shares is not eligible to participate in the scheme for that dividend;
(d) that a person receiving shares under the scheme may be required to comply with the Takeover Code;
(e) the treatment of fractional entitlements arising from the allotment of new shares pursuant to the scheme; and
(f) whether the issue of shares under the scheme will require shareholders' approval under the Companies Act and/or any other applicable statutory requirement, and if so, to disclose whether the issuer is relying on a general mandate that is currently in force or will be obtaining specific shareholders' approval for the issue of new shares under the scheme.
(2) All shareholders must be eligible to participate in the scheme, subject to any shareholding restriction imposed by any statute, law or regulation in Singapore or prescribed in the Articles of Association of the issuer. The scheme may provide that shareholders may make a permanent election to participate in the scheme for all future dividends or may elect for each dividend.
(3) Notwithstanding Rule 861(2), an issuer may determine that foreign shareholders will not be eligible to participate if:
(a) they have not supplied CDP or the issuer (as the case may be), addresses in Singapore for services of notices, or
(b) the participation of foreign shareholders will result in a breach of regulations or is not permitted by the relevant authorities of the jurisdictions in which the foreign shareholders are located.
In addition, if any foreign shareholding limit computed as at the record date will be breached (assuming that all foreign shareholders elect for shares), the scheme shall not apply for that dividend and the cash amount of the dividend declared will be paid in the usual way.
(4) The issue price of shares allotted pursuant to the scheme must be determined in accordance with a formula based on the market price, but any discount must not exceed 10% of the market price.
(5) The dividend payment date for a dividend where a share alternative is offered must be not more than 35 market days after the record date.
(6) For the avoidance of doubt, the scheme must allow shareholders to receive dividends in cash.
Amended on 1 January 20111 January 2011 and 7 February 20207 February 2020.
862
An issuer must announce whether or not a scheme is to apply to a particular dividend. Such an announcement must be made promptly after the decision is taken and in any event, no later than the market day following the record date for that particular dividend.
Amended on 7 February 20207 February 2020.
863
The Exchange will normally admit the securities to Catalist on receipt of conforming documents from the sponsor. However, the Exchange may, in its absolute discretion, impose conditions on the listing of the securities, or delay or refuse the listing. Such conditions may include shareholder approval and/or abstention from voting by certain shareholders. The Exchange also reserves the right to vary any such condition(s) or impose additional conditions.
864
The following sets out the usual steps in the additional listing process (other than for rights issues):
(1)
(a) The issuer makes the appropriate announcement;
(b) The sponsor submits an additional listing confirmation required in Part I of Appendix 8B to the Exchange;
(c) The issuer obtains shareholder approval (if required);
(d) The issuer announces receipt of the listing and quotation notice from the Exchange;
(e) The issuer fixes the record date (if applicable) and the sponsor informs the Exchange;
(f) The issuer allots and issues the securities;
(g) The sponsor submits the confirmation required in Part II of Appendix 8B to the Exchange; and
(h) The securities are admitted to Catalist.
Where applicable, an offer information statement must be lodged under section 277(1)(b) of the SFA with the Exchange acting as agent of the Authority. The written consents provided by experts, issue managers and underwriters under sections 277(5) and 277(6) of the SFA, must be lodged with the Exchange (acting as agent of the Authority) at the same time as the lodgement of the offer information statement.
Refer to Appendix 8B — Confirmation for Corporate Actions / Additional Listing.
Refer to Appendix 8B — Confirmation for Corporate Actions / Additional Listing.
(2) Where shares are issued pursuant to the exercise or conversion of convertible securities for which listing and quotation notice has been received from the Exchange, the issuer need not follow the procedures set out in Rule 864(1). The listing of such securities must comply with the following procedures:
(a) The issuer issues and allots the shares;
(b) The sponsor submits a notification in accordance with Appendix 8C to the Exchange;
(c) The Exchange informs the sponsor of the listing of the shares;
(d) The securities are admitted to Catalist.
Amended on 31 January 200831 January 2008 and 7 February 20207 February 2020.
865
An offer information statement lodged under section 277(1)(b) of the SFA with the Exchange acting as agent of the Authority, must meet the following requirements:
(1) It must comply with applicable law and, in particular, Parts 2 to 11 of the Sixteenth Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 ("Sixteenth Schedule"), where a reference to the "Authority" shall mean a reference to the Exchange.
(2) It must include on the front cover the following:
(a) the date of lodgement of the offer information statement,
(b) the name of the entity in respect of which the securities are being offered, its place of incorporation or constitution, the date of incorporation or constitution and the name of its sponsor,
(c) the following statements:
(i) This document is important. If you are in any doubt as to the action you should take, you should consult your legal, financial, tax, or other professional adviser(s).
(ii) The securities offered are issued by an entity whose shares are listed for quotation on Catalist.
(iii) An application has been made for permission for the securities to be listed for quotation on Catalist.
(iv) Companies listed on Catalist may carry higher investment risk when compared with larger or more established companies listed on the SGX Main Board. In particular, companies may list on Catalist without a track record of profitability and there is no assurance that there will be a liquid market in the securities traded on Catalist. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser.
(v) This offer is made in or accompanied by an offer information statement that has been lodged with the Singapore Exchange Securities Trading Limited ("the Exchange") acting as agent on behalf of the Monetary Authority of Singapore ("the Authority").
(vi) Neither the Authority nor the Exchange has examined or approved the contents of this document. Neither the Authority nor the Exchange assumes any responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document. Neither the Authority nor the Exchange has in any way considered the merits of the securities being offered for investment.
(vii) The lodgement of this offer information statement with the Exchange does not imply that the SFA, or any other legal or regulatory requirements, or requirements in the Exchange's listing rules, have been complied with.
(viii) Acceptance of applications will be conditional upon issue of the securities and upon listing of the issued securities of the issuer. Monies paid in respect of any application accepted will be returned if the listing of the securities does not proceed.
(ix) After the expiration of 6 months from the date of lodgement of this offer information statement, no person shall make an offer of securities, or allot, issue or sell any securities, on the basis of this offer information statement; and no officer or equivalent person or promoter of the entity or proposed entity will authorise or permit the offer of any securities or the allotment, issue or sale of any securities, on the basis of this offer information statement.
(3) If the sponsor acts as issue manager to the offer of securities, the sponsor must also be named as issue manager in the offer information statement.
(4) The Exchange may waive the application of any requirement in the Rules relating to the form or content of an offer information statement to any person or any offer information statement, subject to conditions or restrictions as may be imposed by the Exchange.
Refer to Practice Note 4B — General Requirements for Lodgement or Submission of Documents.
Amended on 31 January 200831 January 2008 and 7 February 20207 February 2020.
866
An issuer may purchase its own shares ("share buy-back") if it has obtained the prior specific approval of shareholders in general meeting.
867
A share buy-back may only be made by way of:
(1) on-market purchases transacted through the Exchange's trading system or on another stock exchange on which the issuer's equity securities are listed ("market acquisition"); or
(2) off-market acquisition in accordance with an equal access scheme as defined in Section 76C of the Companies Act.
Unless a lower limit is prescribed under the issuer's law of incorporation, such share buy-back shall not exceed 10 per cent of the total number of issued shares excluding treasury shares and subsidiary holdings as at the date of the resolution passed by shareholders for the share buy-back.
Amended on 1 October 20131 October 2013, 31 March 201731 March 2017.
868
For the purpose of obtaining shareholder approval, the issuer must provide at least the following information to shareholders:
(1) The information required under the Companies Act;
(2) The reasons for the proposed share buy-back;
(3) The consequences, if any, of share purchases by the issuer that will arise under the Takeover Code or other applicable takeover rules;
(4) Whether the share buy-back, if made, could affect the listing of the issuer's equity securities on the Exchange; and
(5) Details of any share buy-back made by the issuer in the previous 12 months (whether market acquisitions or off-market acquisitions in accordance with an equal access scheme), giving the total number of shares purchased, the purchase price per share or the highest and lowest prices paid for the purchases, where relevant, and the total consideration paid for the purchases.
(6) Whether the shares purchased by the issuer will be cancelled or kept as treasury shares.
869
An issuer may only purchase shares by way of a market acquisition at a price which is not more than 5% above the average closing market price. For this purpose, the average closing market price is:
(1) the average of the closing market prices of the shares over the last 5 market days, on which transactions in the share were recorded, before the day on which the purchases are made; and
(2) deemed to be adjusted for any corporate action that occurs during the relevant 5-day period and the day on which the purchases are made.
Amended on 7 February 20207 February 2020.
870
An issuer making an off-market acquisition in accordance with an equal access scheme must issue an offer document to all shareholders containing at least the following information:
(1) Terms and conditions of the offer;
(2) Period and procedures for acceptances; and
Amended on 29 September 201129 September 2011.
871
(1) An issuer must announce any share buy-back as follows:
(a) In the case of a market acquisition, by 9.00 am on the market day following the day on which it purchased shares,
(b) In the case of an off market acquisition under an equal access scheme, by 9.00 am on the second market day after the close of acceptances of the offer.
(2) The announcement must be in the form of Appendix 8D.
901
The objective of this Chapter is to guard against the risk that interested persons could influence the issuer, its subsidiaries or associated companies, to enter into transactions with interested persons that may adversely affect the interests of the issuer or its shareholders.
902
In applying these rules, regard must be given to:
(1) the objective of this Chapter; and
(2) the economic and commercial substance of the interested person transaction, instead of legal form and technicality.
903
Apart from the rules in this Chapter, an issuer must also observe applicable requirements in Chapter 10.
904
For the purposes of this Chapter, the following definitions apply:
(1) "approved exchange" means a stock exchange that has rules which safeguard the interests of shareholders against interested person transactions according to similar principles to this Chapter.
(2) "entity at risk" means:
(a) the issuer;
(b) a subsidiary of the issuer that is not listed on the Exchange or an approved exchange; or
(c) an associated company of the issuer that is not listed on the Exchange or an approved exchange, provided that the listed group, or the listed group and its interested person(s), has control over the associated company.
(3) [Deleted]
(4) "interested person" means:
(a) a director, chief executive officer, or controlling shareholder of the issuer; or
(b) an associate of any such director, chief executive officer, or controlling shareholder.
(4A) The Exchange may deem any person or entity to be an interested person if the person or entity has entered into, or proposes to enter into: (a) a transaction with an entity at risk; and (b) an agreement or arrangement with an interested person in connection with that transaction.
(4B) "primary interested person" means a person or an entity in Rule 904(4)(a).
(5) "interested person transaction" means a transaction between an entity at risk and an interested person.
(6) "transaction" includes:
(a) the provision or receipt of financial assistance;
(b) the acquisition, disposal or leasing of assets;
(c) the provision or receipt of goods or services;
(d) the issuance or subscription of securities;
(e) the granting of or being granted options; and
(f) the establishment of joint ventures or joint investments;
whether or not in the ordinary course of business, and whether or not entered into directly or indirectly (for example, through one or more interposed entities).
(7) “defence funding” means:
(a) The provision of a loan to a director or a chief executive officer of an entity at risk to meet expenditure incurred or to be incurred:
(i) in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by that person in relation to the entity at risk; or
(ii) in connection with an application for relief; or
(iii) in defending himself in an investigation by a regulatory authority or against any action proposed to be taken by a regulatory authority, in connection with any alleged negligence, default, breach of duty or breach of trust in relation to the entity at risk; or
(b) any action to enable such director or chief executive officer to avoid incurring such expenditure.
(8) "net profits" means profit or loss including discontinued operations that have not been disposed and before income tax and non-controlling interests.
Amended on 31 March 201731 March 2017 and 7 February 20207 February 2020.
905
(1) An issuer must make an immediate announcement of any interested person transaction of a value equal to, or more than, 3% of the group's latest audited net tangible assets.
(2) If the aggregate value of all transactions entered into with the same interested person during the same financial year amounts to 3% or more of the group's latest audited net tangible assets, the issuer must make an immediate announcement of the latest transaction and all future transactions entered into with that same interested person during that financial year.
(3) Rule 905(1) and (2) does not apply to any transaction below $100,000.
(4) If the group's latest audited net tangible assets is negative, the issuer should consult the Exchange on the appropriate benchmark to calculate the relevant thresholds in Rule 905(1) and 905(2), which may be based on its market capitalisation.
(5) While transactions below $100,000 are not normally aggregated under Rule 905(3), the Exchange may aggregate any such transaction entered into during the same financial year and treat them as if they were one transaction in accordance with Rule 902.
Amended on 7 February 20207 February 2020.
906
(1) An issuer must obtain shareholder approval for any interested person transaction of a value equal to, or more than:
(a) 5% of the group's latest audited net tangible assets; or
(b) 5% of the group's latest audited net tangible assets, when aggregated with other transactions entered into with the same interested person during the same financial year. However, a transaction which has been approved by shareholders, or is the subject of aggregation with another transaction that has been approved by shareholders, need not be included in any subsequent aggregation.
(2) Rule 906(1) does not apply to any transaction below $100,000.
(3) If the group's latest audited net tangible assets is negative, the issuer should consult the Exchange on the appropriate benchmark to calculate the relevant threshold in Rule 906(1), which may be based on its market capitalisation.
(4) While transactions below $100,000 are not normally aggregated under Rule 906(2), the Exchange may aggregate any such transaction entered into during the same financial year and treat them as if they were one transaction in accordance with Rule 902.
Amended on 7 February 20207 February 2020.
907
An issuer must disclose the aggregate value of interested person transactions entered into during the financial year under review in its annual report. The name of the interested person, nature of relationship and the corresponding aggregate value of the interested person transactions entered into with the same interested person must be presented in the following format:
| Name of interested person | Nature of relationship | Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders' mandate pursuant to Rule 920) | Aggregate value of all interested person transactions conducted under shareholders' mandate pursuant to Rule 920 (excluding transactions less than $100,000) |
Amended on 7 February 20207 February 2020.
908
In interpreting the term "same interested person" for the purpose of aggregation in Rules 905, 906 and 907, the following applies:—
(1) Transactions between (a) an entity at risk and a primary interested person; and (b) an entity at risk and an associate of that primary interested person, are deemed to be transactions between an entity at risk with the same interested person.
Transactions between (i) an entity at risk and a primary interested person; and (ii) an entity at risk and another primary interested person, are deemed to be transactions between an entity at risk with the same interested person if the primary interested person is also an associate of the other primary interested person.
Transactions between (i) an entity at risk and a primary interested person; and (ii) an entity at risk and another primary interested person, are deemed to be transactions between an entity at risk with the same interested person if the primary interested person is also an associate of the other primary interested person.
(2) Transactions between an entity at risk and interested persons who are members of the same group are deemed to be transactions between the entity at risk with the same interested person.
If an interested person (which is a member of a group) is listed, its transactions with the entity at risk need not be aggregated with transactions between the entity at risk and other interested persons of the same group, provided that the listed interested person and other listed interested persons have boards the majority of whose directors are different and are not accustomed to act on the instructions of the other interested person and have audit committees whose members are completely different.
As an example, Entity-At-Risk A, Listed B, Listed C and Unlisted D are all subsidiaries of Ultimate E. Listed B, Listed C and Ultimate E have boards, the majority of whose directors are different and are not accustomed to act on the instructions of Ultimate E and its associates and have audit committees whose members are completely different. Transactions between Entity-At-Risk A and Listed B need not be aggregated with transactions between Entity-At-Risk A and Listed C or with transactions between Entity-At-Risk A and Ultimate E. Transactions between Entity-At-Risk A and Ultimate E must be aggregated with transactions between Entity-At-Risk A and Unlisted D.
If an interested person (which is a member of a group) is listed, its transactions with the entity at risk need not be aggregated with transactions between the entity at risk and other interested persons of the same group, provided that the listed interested person and other listed interested persons have boards the majority of whose directors are different and are not accustomed to act on the instructions of the other interested person and have audit committees whose members are completely different.
As an example, Entity-At-Risk A, Listed B, Listed C and Unlisted D are all subsidiaries of Ultimate E. Listed B, Listed C and Ultimate E have boards, the majority of whose directors are different and are not accustomed to act on the instructions of Ultimate E and its associates and have audit committees whose members are completely different. Transactions between Entity-At-Risk A and Listed B need not be aggregated with transactions between Entity-At-Risk A and Listed C or with transactions between Entity-At-Risk A and Ultimate E. Transactions between Entity-At-Risk A and Ultimate E must be aggregated with transactions between Entity-At-Risk A and Unlisted D.
Amended on 7 February 20207 February 2020.
909
The value of a transaction is the amount at risk to the issuer. This is illustrated by the following examples:
(1) In the case of a partly-owned subsidiary or associated company, the value of the transaction is the issuer's effective interest in that transaction;
(2) In the case of a joint venture, the value of the transaction includes the equity participation, shareholders' loans and guarantees given by the entity at risk;
(3) In the case of borrowing of funds from an interested person, the value of the transaction is the interest payable on the borrowing. In the case of lending of funds to an interested person, the value of the transaction is the interest payable on the loan and the value of the loan; and
(4) In the case that the market value or book value of the asset to be disposed of is higher than the consideration from an interested person, the value of the transaction is the higher of the market value or book value of the asset.
Amended on 7 February 20207 February 2020.
910
(1) An issuer must announce a sale or proposed sale of any units of its local property projects or those of its entity at risk to an interested person or a relative of a director, chief executive officer or controlling shareholder within two weeks of the sale or proposed sale, regardless of whether the sale or proposed sale is required to be announced under Rule 905.
(2) An issuer is required to comply with Rule 905 for a sale or proposed sale of any units of its non-local property projects, or those of its entity at risk, to its interested person.
911
An announcement relating to any sale or proposed sale of units of the issuer or those of its entity at risk's property projects must state the name of the project, the name of each purchaser, the unit number, the sale price and the percentage discount given.
912
In deciding on any sale of units of its property projects to an issuer's interested persons or a relative of a director, chief executive officer or controlling shareholder, an issuer's board of directors must be satisfied that the terms of the sale(s) are not prejudicial to the interests of the issuer and its minority shareholders. The audit committee must review and approve the sale(s) and satisfy itself that the number and terms of the sale(s) are fair and reasonable and are not prejudicial to the interests of the issuer and its minority shareholders.
913
Where a sale or proposed sale to an issuer's interested person requires shareholder approval, the issuer must obtain the approval within six weeks of the date of the sale or proposed sale.
914
An interested person and any nominee of the interested person must abstain from voting on all resolutions to approve the sales or proposed sales to the interested persons.
915
The following transactions are not required to comply with Rules 905, 906 and 907:
(1) A payment of dividends, a subdivision or consolidation of shares, an issue of securities by way of a bonus issue, a preferential offer, or an off-market acquisition of the issuer's shares, made to all shareholders on a pro-rata basis, including the exercise of rights, options or company warrants granted under the preferential offer.
(2) The grant of options, and the issue of securities pursuant to the exercise of options, under an employees' share option scheme for which a listing and quotation notice has been issued by the Exchange.
(3) A transaction between an entity at risk and an investee company, where the interested person's interest in the investee company, other than that held through the issuer, is less than 5%.
(4) A transaction in marketable securities carried out in the open market where the counterparty's identity is unknown to the issuer at the time of the transaction.
(5) A transaction between an entity at risk and an interested person for the provision of goods or services if:
(a) the goods or services are sold or rendered based on a fixed or graduated scale, which is publicly quoted; and
(b) the sale prices are applied consistently to all customers or class of customers.
Such transactions include telecommunication and postal services, public utility services, and sale of fixed price goods at retail outlets.
(6) The provision of financial assistance or services by a financial institution that is licensed or approved by the Monetary Authority of Singapore, on normal commercial terms and in the ordinary course of business.
(7) The receipt of financial assistance or services from a financial institution that is licensed or approved by the Authority, on normal commercial terms and in the ordinary course of business.
(8) Director's fees and remuneration, and employment remuneration (excluding "golden parachute" payments).
(9) Insurance coverage and indemnities for directors and chief executive officers against liabilities attaching to them in relation to their duties as officers of the entity at risk, to the extent permitted under the Companies Act, and regardless of whether the entity at risk is subject to the Companies Act.
(10) Defence funding for directors and chief executive officers of the entity at risk to the extent permitted under sections 163A and 163B of the Companies Act, regardless of whether the entity at risk is subject to the Companies Act, provided that in the case of defence funding permitted under section 163B of the Companies Act, such defence funding is to be repaid upon any action taken by a regulatory authority against him. For this purpose, references to “director” in sections 163A and 163B of the Companies Act shall be read as references to “director or chief executive officer”.
In the case of defence funding under section 163A of the Companies Act, defence funding shall be repaid in accordance with the timeline stipulated in section 163A(2)(b) of the Companies Act.
In the case of defence funding under section 163A of the Companies Act, defence funding shall be repaid in accordance with the timeline stipulated in section 163A(2)(b) of the Companies Act.
Amended on 31 March 201731 March 2017 and 7 February 20207 February 2020.
916
The following transactions are not required to comply with Rule 906:
(1) The entering into, or renewal of a lease or tenancy of real property of not more than 3 years if the terms are supported by a valuation carried out by a property valuer.
(2) Investment in a joint venture with an interested person if:
(a) the risks and rewards are in proportion to the equity of each joint venture partner;
(b) the issuer confirms by an announcement that its audit committee is of the view that the risks and rewards of the joint venture are in proportion to the equity of each joint venture partner and the terms of the joint venture are not prejudicial to the interests of the issuer and its minority shareholders; and
(c) the interested person does not have an existing equity interest in the joint venture prior to the participation of the entity at risk in the joint venture.
(3) The provision of a loan to a joint venture with an interested person if:
(a) the loan is extended by all joint venture partners in proportion to their equity and on the same terms;
(b) the interested person does not have an existing equity interest in the joint venture prior to the participation of the entity at risk in the joint venture; and
(c) the issuer confirms by an announcement that its audit committee is of the view that:
1. the provision of the loan is not prejudicial to the interests of the issuer and its minority shareholders; and
2. the risks and rewards of the joint venture are in proportion to the equity of each joint venture partner and the terms of the joint venture are not prejudicial to the interests of the issuer and its minority shareholders.
(4) The award of a contract by way of public tender to an interested person if:
(a) the awarder entity at risk announces following information:
(i) the prices of all bids submitted;
(ii) an explanation of the basis for selection of the winning bid; and
(b) both the listed bidder (or if the bidder is unlisted, its listed parent company) and listed awarder (or if the awarder is unlisted, its listed parent company) have boards, the majority of whose directors are different and are not accustomed to act on the instructions of the interested person or its associates and have audit committees whose members are completely different.
(5) The receipt of a contract which was awarded by way of public tender, by an interested person if:
(a) the bidder entity at risk announces the prices of all bids submitted; and
(b) both the listed bidder (or if the bidder is unlisted, its listed parent company) and listed awarder (or if the awarder is unlisted, the listed parent company) have boards, the majority of whose directors are different and are not accustomed to act on the instructions of the interested person or its associates and have audit committees whose members are completely different.
Amended on 12 February 2021.
917
An announcement under Rule 905 must contain all of the following information:
(1) Details of the interested person transacting with the entity at risk, and the nature of that person's interest in the transaction.
(2) Details of the transaction including, where applicable, the book value, the net profits attributable to the assets and the latest available open market value, relevant terms of the transaction, and the bases on which the terms were arrived at.
(3) The rationale for, and benefit to, the entity at risk.
(4)
(a) A statement:
(i) whether or not the audit committee of the issuer is of the view that the transaction is on normal commercial terms, and is not prejudicial to the interests of the issuer and its minority shareholders; or
(ii) that the audit committee is obtaining an opinion from an independent financial adviser before forming its view, which will be announced subsequently.
(b) Transactions that satisfy Rule 916(1), (2) and (3) are not required to comply with Rule 917(4)(a).
(5) The current total for the financial year of all transactions with the particular interested person whose transaction is the subject of the announcement and the current total of all interested person transactions for the same financial year.
(6) Where the issuer accepts a profit guarantee or a profit forecast (or any covenant which quantifies the anticipated level of future profits) from the vendor of businesses / assets, the information required in Rule 1013(1). The issuer must also comply with Rule 1013(3).
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
918
If a transaction requires shareholder approval, it must be obtained either prior to the transaction being entered into or, if the transaction is expressed to be conditional on such approval, prior to the completion of the transaction.
919
In a meeting to obtain shareholder approval, the interested person and any associate of the interested person must not vote on the resolution, nor accept appointments as proxies unless specific instructions as to voting are given.
Amended on 29 September 201129 September 2011.
920
(1) An issuer may seek a general mandate from shareholders for recurrent transactions of a revenue or trading nature or those necessary for its day-to-day operations such as the purchase and sale of supplies and materials, but not in respect of the purchase or sale of assets, undertakings or businesses. A general mandate is subject to annual renewal.
(a) An issuer must:
(i) disclose the general mandate in the annual report, giving details of the aggregate value of transactions conducted pursuant to the general mandate during the financial year. The disclosure must be in the form set out in Rule 907; and
(b) A circular to shareholders seeking a general mandate must include:
(i) unless the Exchange requires otherwise, the names of the interested persons with whom the entity at risk will be transacting;
(ii) the nature of the transactions contemplated under the mandate;
(iii) the rationale for, and benefit to, the entity at risk;
(iv) the methods or procedures for determining transaction prices;
(v) the independent financial adviser's opinion on whether the methods or procedures in (iv) are sufficient to ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of the issuer and its minority shareholders;
(vi) an opinion from the audit committee if it takes a different view to the independent financial adviser;
(vii) a statement from the issuer that it will obtain a fresh mandate from shareholders if the methods or procedures in (iv) become inappropriate; and
(viii) a statement that the interested person will abstain, and has undertaken to ensure that its associates will abstain, from voting on the resolution approving the transaction.
(c) An independent financial adviser's opinion is not required for the renewal of a general mandate provided that the audit committee confirms that:
(i) the methods or procedures for determining the transaction prices have not changed since last shareholder approval; and
(ii) the methods or procedures in Rule 920(1)(c)(i) are sufficient to ensure that the transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of the issuer and its minority shareholders.
(2) If the information in Rule 920(1)(b) is included in a offer document issued in connection with a listing of an issuer, the issuer may treat a general mandate as having been given. The mandate will be effective until the earlier of the following:
(a) The first annual general meeting of the issuer following listing; or
(b) The first anniversary of the listing date.
Amended on 7 February 20207 February 2020.
921
Except in the case of a general mandate, if shareholder approval is required, the circular to shareholders must include:
(1) Details of the interested person transacting with the entity at risk, and the nature of that person's interest in the transaction.
(2) Details of the transaction (and all other transactions which are the subject of aggregation pursuant to Rule 906) including relevant terms of the transaction, and the bases on which the terms were arrived at.
(3) The rationale for, and benefit to, the entity at risk.
(4)
(a) An opinion in a separate letter from an independent financial adviser stating whether the transaction (and all other transactions which are the subject of aggregation pursuant to Rule 906):
(i) is on normal commercial terms, and
(ii) is prejudicial to the interests of the issuer and its minority shareholders.
(b) However, the opinion from an independent financial adviser is not required for the following transactions. Instead, an opinion from the audit committee in the form required in Rule 917(4)(a) must be disclosed:
(i) The issue of shares pursuant to Part IV of Chapter 8, or the issue of other securities of a class that is already listed, for cash.
(ii) Purchase or sale of any real property where:
• the consideration for the purchase or sale is in cash;
• a property valuation report has been obtained for the purpose of the purchase or sale of such property; and
• the summary property valuation report of such property is disclosed in the circular.
(5) An opinion from the audit committee, if it takes a different view to the independent financial adviser.
(6) All other information known to the issuer or any of its directors that is material to shareholders in deciding whether it is in the interests of the issuer to approve the transaction. Such information includes, from an economic and commercial point of view, the true potential costs and detriments of, or resulting from, the transaction, including opportunity costs, taxation consequences, and benefits forgone by the entity at risk.
(7) A statement that the interested person will abstain, and has undertaken to ensure that its associates will abstain, from voting on the resolution approving the transaction.
(8) Where the issuer accepts a profit guarantee or a profit forecast (or any covenant which quantifies the anticipated level of future profits) from the vendor of businesses/assets, the information required in Rules 1013(1) and 1013(2), and a statement confirming that it will comply with Rule 1013(3).
Amended on 29 September 201129 September 2011 and 12 February 2021.
922
The Exchange will not entertain any application for waiver of any of the provisions of this Chapter.
1001
This Chapter sets out the rules for significant transactions by issuers, principally acquisitions and realisations and the provision of financial assistance. It does not matter whether the consideration paid or received is cash, shares, other securities, other assets, or any combination of these. This Chapter also describes how transactions are classified, what the requirements are for announcements, and whether a circular and shareholder approval is required.
Amended on 7 February 20207 February 2020.
1002
Unless the context otherwise requires:
(1) "transaction" refers to the acquisition or disposal of assets, or the provision of financial assistance, by an issuer or a subsidiary that is not listed on the Exchange or an approved exchange, including an option to acquire or dispose of assets. It excludes a transaction which is in, or in connection with, the ordinary course of its business or of a revenue nature. It also excludes the provision of financial assistance to the issuer, or its subsidiary or associated company.
(2) "assets" includes securities and business undertaking(s).
(3)
(a) "net assets" means total assets less total liabilities.
(b) "net profits" means profit or loss including discontinued operations that have not been disposed and before income tax and non-controlling interests.
(c) the net asset and net profit figures used for comparison with the transaction(s) under consideration will be taken from the latest announced consolidated accounts (as set out in Appendix 7C). The Exchange may allow the issuer's net asset value or net profit to be adjusted to take into account any transaction(s) completed subsequent to the latest announced consolidated accounts provided that adequate information about such transaction(s) has already been announced to shareholders.
(4) "market value" means the weighted average price of the issuer's shares transacted on the market day preceding the date of the sale and purchase agreement.
(5) "market capitalisation" of the issuer is determined by multiplying the number of shares in issue by the weighted average price of such shares transacted on the market day preceding the date of the sale and purchase agreement.
(7) "value of the financial assistance" means the monetary value of the relevant loan, guarantee, debt, indemnity, security provided or obligation.
Amended on 7 February 20207 February 2020 and 7 February 20207 February 2020.
1003
In determining the basis of valuation of a transaction, the following rules apply:
(1) In any acquisition or disposal of shares, the value will be assessed by reference to:
(a) in the case of unlisted shares, the net asset value represented by such shares; and
(b) in the case of listed shares, the market value represented by such shares.
(2) In any acquisition or disposal of assets other than shares, the value will be assessed by reference to the book value of the assets or, if a valuation has been carried out for the purpose of the acquisition or disposal, the market value of the assets. The valuation of real property must be carried out by a property valuer in accordance with the property valuation standards.
(3) Where the consideration is in the form of shares, the value of the consideration shall be determined by reference either to the market value of such shares or the net asset value represented by such shares, whichever is higher.
(4) In any provision of financial assistance:
(a) for Rule 1006(a), the reference to "net asset value of the assets to be disposed of" shall mean the aggregate value of the financial assistance; and
(b) for Rule 1006(c), the reference to "aggregate value of the consideration given or received" shall mean the aggregate value of the financial assistance.
Amended on 7 February 20207 February 2020 and 12 February 2021.
1004
Transactions are classified into the following categories:
(a) non-discloseable transactions;
(b) discloseable transactions;
(c) major transactions; and
(d) very substantial acquisitions or reverse takeovers.
1005
In determining whether a transaction falls into category (a), (b), (c) or (d) of Rule 1004, the sponsor may aggregate separate transactions completed within the last 12 months and treat them as if they were one transaction. The Exchange retains the discretion to determine whether the aggregation was correctly applied, and/or to direct the sponsor to aggregate other transactions.
1006
A transaction may fall into category (a), (b), (c) or (d) of Rule 1004 depending on the size of the relative figures computed on the following bases:
(a) The net asset value of the assets to be disposed of, compared with the group's net asset value. This basis is not applicable to an acquisition of assets.
(b) The net profits attributable to the assets acquired or disposed of, compared with the group's net profits.
(c) The aggregate value of the consideration given or received, compared with the issuer's market capitalisation based on the total number of issued shares excluding treasury shares.
(d) The number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue.
(e) The aggregate volume or amount of proved and probable reserves to be disposed of, compared with the aggregate of the group's proved and probable reserves. This basis is applicable to a disposal of mineral, oil or gas assets by a mineral, oil and gas company, but not to an acquisition of such assets. If the reserves are not directly comparable, the Exchange may permit valuations to be used instead of volume or amount.
Amended on 1 February 20111 February 2011, 27 September 201327 September 2013 and 23 August 201823 August 2018.
1007
(1) If any of the relative figures computed pursuant to Rule 1006 involves a negative figure, this Chapter may still be applicable to the transaction in accordance with the applicable circumstances in Practice Note 10A, or if not so provided, at the discretion of the Exchange, in which case, the sponsor should consult the Exchange.
(2) Where the disposal of an issuer's interest in a subsidiary is undertaken in conjunction with an issue of shares by that subsidiary, the relative figures in Rule 1006 must be computed based on the disposal and the issue of shares.
Amended on 7 February 20207 February 2020.
1008
1009
If the consideration is satisfied wholly or partly in securities for which listing is being sought, the issuer must announce the transaction as soon as possible after the terms have been agreed, stating the information set out in Part VI.
1010
Where any of the relative figures computed on the bases set out in Rule 1006 exceeds 5%, an issuer must, after terms have been agreed, immediately announce the following:
(1) Particulars of the transaction, including the name of any company or business, where applicable.
(2) A description of the trade carried on, if any.
(3) The aggregate value of the consideration, stating the factors taken into account in arriving at it and how it will be satisfied, including the terms of payment. In the case of financial assistance, the aggregate value of the financial assistance and any interest payable on the financial assistance.
(4) Whether there are any material conditions attaching to the transaction including a put, call or other option and details thereof.
(5) The value (book value, net tangible asset value and the latest available open market value) of the assets being acquired or disposed of, and in respect of the latest available valuation, the value placed on the assets, the party who commissioned the valuation and the basis and date of such valuation.
(6) In the case of a disposal, the excess or deficit of the proceeds over the book value, and the intended use of the sale proceeds. In the case of an acquisition, the source(s) of funds for the acquisition.
(7) The net profits attributable to the assets being acquired or disposed of. In the case of a disposal, the amount of any gain or loss on disposal.
(8) The effect of the transaction on the net tangible assets per share of the issuer for the most recently completed financial year, assuming that the transaction had been effected at the end of that financial year.
(9) The effect of the transaction on the earnings per share of the issuer for the most recently completed financial year, assuming that the transaction had been effected at the beginning of that financial year.
(10) The rationale for the transaction including the benefits which are expected to accrue to the issuer as a result of the transaction.
(11) Whether any director or controlling shareholder has any interest, direct or indirect, in the transaction and the nature of such interests.
(12) Details of any service contracts of the directors proposed to be appointed to the issuer in connection with the transaction.
(13) The relative figures that were computed on the bases set out in Rule 1006.
Amended on 7 February 20207 February 2020.
1011
Where a sale and purchase agreement is entered into, or a valuation is conducted on the assets, the issuer must include a statement in the announcement that a copy of the relevant agreement, or valuation report is available for inspection during normal business hours at the issuer's registered office for 3 months from the date of the announcement.
Amended on 7 February 20207 February 2020.
1012
Where the announcement in Rule 1010 contains a profit forecast, which may include any statement which quantifies the anticipated level of future profits, the issuer must announce the following additional information:
(a) Details of the principal assumptions including commercial assumptions upon which the forecast is based.
(b) Confirmation from the issuer's auditors that they have reviewed the bases and assumptions, accounting policies and calculations for the forecast, and setting out their report on the bases, assumptions, policies and calculations.
(c) A report from the issuer's financial adviser, if one is appointed, confirming that it is satisfied that the forecast has been stated by the directors after due and careful enquiry. If no such adviser has been appointed in connection with the transaction, the issuer must submit a letter to the sponsor from the board of directors confirming that the forecast has been made by them after due and careful enquiry.
Amended on 29 September 201129 September 2011.
1013
(1) Where an issuer enters into a discloseable transaction, a major transaction, a very substantial acquisition or a reverse takeover and accepts a profit guarantee or a profit forecast (or any covenant which quantifies the anticipated level of future profits) from a vendor of assets / business, the issuer's announcement in Rule 1010 must contain information on the profit guarantee or the profit forecast, including the following:
(a) The views of the board of directors of the issuer in accepting the profit guarantee or the profit forecast and the factors taken into consideration and basis for such a view;
(b) The principal assumptions including commercial bases and assumptions upon which the quantum of profit guarantee or the profit forecast is based;
(c) The manner and amount of compensation to be paid by the vendor in the event that the profit guarantee or the profit forecast is not met and the conditions precedent, if any, and the detailed basis for such a compensation; and
(d) The safeguards put in place (such as the use of a banker's guarantee) to ensure the issuer's right of recourse in the event that the profit guarantee or the profit forecast is not met, if any.
For the avoidance of doubt, the term "profit guarantee" can only be used for transactions where the vendor will compensate the issuer in cash for any shortfall in the level of profits when it provides a quantifiable anticipated level of future profits.
(2) With reference to Rule 1013(1), where the transaction is a major transaction, a very substantial acquisition or a reverse takeover, the shareholders' circular must contain the information in Rule 1013(1) and the following:
(a) A confirmation from the auditors that they have reviewed the bases and assumptions, accounting policies and calculations for the profit guarantee or the profit forecast, and that the basis of preparation of the profit guarantee or the profit forecast is consistent with the accounting policies of the issuer; and
(b) A statement by the financial advisor to the issuer as to whether or not they are of the view that the transaction is on normal commercial terms and is not prejudicial to the interest of the issuer and its shareholders.
(3)
(a) Where the profit guarantee or the profit forecast has been met, the issuer should immediately announce this via SGXNET. Where the profit guarantee or the profit forecast has not been met, the issuer should immediately announce via SGXNET the following:
(i) the variance between the profit guarantee or the profit forecast and the actual profit, and the reason for the variance;
(ii) any variation of the rights of the issuer; and
(iii) the possible course(s) of action by the issuer to protect the interests of the shareholders of the issuer, if any. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome of the action.
(b) Where there is any material variation or amendment in the terms of the agreement, the issuer must immediately make an announcement of such a variation. Where such a variation prejudices the issuer, the board of directors of the issuer must disclose the basis for the acceptance of such a variation.
Added on 29 September 201129 September 2011 and amended on 7 February 20207 February 2020.
1014
(1) Where any of the relative figures as computed on the bases set out in Rule 1006 exceeds:
(a) for an acquisition, 75% but is less than 100%; or
(b) for a disposal or the provision of financial assistance, 50%,
(2) A major transaction must be made conditional upon approval by shareholders in general meeting. A circular containing the information in Rules 1010, 1011, 1012 and 1013 must be sent to all shareholders. If no valuation is available for an acquisition or disposal of assets (other than shares), the issuer must provide an explanation on why it did not commission a valuation. This rule does not apply in the case of an acquisition of profitable assets if the only limit breached is Rule 1006(b).
If the major transaction relates to an acquisition or disposal of mineral, oil or gas asset of a mineral, oil or gas company, the circular to shareholders must contain (a) a qualified person's report that is prepared by an independent qualified person; and (b) a statement that no material changes have occurred since the effective date of the qualified person's report. The effective date of the qualified person's report must not be more than 6 months from the date of publishing the circular. In the case of a major acquisition, the circular to shareholders must contain a valuation report prepared by an independent qualified person in accordance with the VALMIN Code, SPE-PRMS or an equivalent standard that is acceptable to the Exchange. The effective date of the valuation report must not be more than 6 months from the date of publishing the circular and the contents of the qualified person's report must comply with the requirements as set out in paragraph 5 of Practice Note 4C. The valuation report may form part of the qualified person's report. In ascertaining whether or not the issuer is required to seek shareholders' approval for the transaction, the issuer should refer to the general principles set out in Practice Note 10A. Where the issuer is unclear, the issuer should consult and clarify with the sponsor as soon as possible.
If the major transaction relates to an acquisition or disposal of mineral, oil or gas asset of a mineral, oil or gas company, the circular to shareholders must contain (a) a qualified person's report that is prepared by an independent qualified person; and (b) a statement that no material changes have occurred since the effective date of the qualified person's report. The effective date of the qualified person's report must not be more than 6 months from the date of publishing the circular. In the case of a major acquisition, the circular to shareholders must contain a valuation report prepared by an independent qualified person in accordance with the VALMIN Code, SPE-PRMS or an equivalent standard that is acceptable to the Exchange. The effective date of the valuation report must not be more than 6 months from the date of publishing the circular and the contents of the qualified person's report must comply with the requirements as set out in paragraph 5 of Practice Note 4C. The valuation report may form part of the qualified person's report. In ascertaining whether or not the issuer is required to seek shareholders' approval for the transaction, the issuer should refer to the general principles set out in Practice Note 10A. Where the issuer is unclear, the issuer should consult and clarify with the sponsor as soon as possible.
(3) Where a major transaction is not completed or is rescinded by any party to the transaction due to any reason, the issuer must immediately announce via SGXNET the following:
(a) the reasons for the non-completion or rescission of the transaction;
(b) the financial impact of the non-completion or rescission on the issuer; and
(c) the possible course(s) of action to protect the interests of the shareholders of the issuer. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome.
(4) If the major transaction relates to an acquisition or disposal of mineral, oil or gas assets of a mineral, oil or gas company, the circular to shareholders required in Rule 1014(2) must contain an independent qualified person's report that meets the requirements in Rule 441.
(5) Notwithstanding Rule 1014(2), where a disposal of assets is one where any of the relative figures as computed on the bases set out in Rule 1006 exceeds 75%, the issuer must appoint a competent and independent valuer to value the assets to be disposed.
Amended on 29 September 201129 September 2011, 27 September 201327 September 2013, 23 August 201823 August 2018 and 7 February 20207 February 2020.
1014 Rule has been Amended
Amended on 29 September 201129 September 2011, moving rule to new subsections of Rule 1014
1015
(1)
(a) Where an acquisition of assets (whether or not the acquisition is deemed in the issuer's ordinary course of business) is one where any of the relative figures as computed on the bases set out in Rule 1006 is 100% or more, or is one which will result in a change in control of the issuer, the transaction is classified as a very substantial acquisition or reverse takeover respectively. An issuer undertaking such a transaction must appoint a full sponsor. The issuer must, after terms have been agreed, immediately announce the following:
(ii) the latest two years of historical financial information (of the assets to be acquired) and one year of proforma financial information (of the enlarged group).
(b) The acquisition must be made conditional upon the approval of shareholders and, if applicable, the issue of a listing and quotation notice by the Exchange.
(2) For very substantial acquisition, the enlarged group must comply with the requirements in Rules 406(3) and (7), Part IX of Chapter 4 and if applicable, Part XII of Chapter 4. The issuer must appoint a competent and independent valuer to value the assets. For the avoidance of doubt, the valuation report for a mineral, oil and gas company must comply with Rules 441 and 442.
(3) For reverse takeover, the incoming business and the enlarged group must comply with the following:
(a) the requirements in Rule 406, Part IX of Chapter 4 and if applicable, Rule 416 or Part XII of Chapter 4. The issuer must appoint a competent and independent valuer to value the incoming business. For the avoidance of doubt, the valuation report for a mineral, oil and gas company must comply with Rules 441 and 442. With regard to Rule 406(1), the proportion of share capital in public hands must be at least 15% based on the total number of issued shares excluding treasury shares of the enlarged group. Where reference is made to "offer document", it shall mean a shareholders' circular as required pursuant to Rule 1015(2); and
(b) the requirements specified in Rules 420, 421 and 422 or 443 are applicable to:
(i) persons who are existing controlling shareholders or who will become controlling shareholders of the issuer as a result of the asset acquisition; and
(ii) associates of any person in (i).
Rule 1015(3)(b) is also applicable to very substantial acquisition.
The applicable period of moratorium in Rule 422 will commence upon resumption of trading of the securities.
The applicable period of moratorium in Rule 422 will commence upon resumption of trading of the securities.
(c) where the consideration for the acquisition of assets by the issuer is to be satisfied by the issue of shares, the price per share of the issuer after adjusting for any share consolidation must not be lower than S$0.20.
(4) In relation to the assets to be acquired, the shareholders' circular must contain the following:
(a) information required by Rules 407, 416, Part XII of Chapter 4, 1010, 1011, 1012 and 1013, where applicable. Where reference is made in Rule 407 to "offer document", it shall mean a shareholders' circular as required pursuant to Rule 1015(2);
(b) a statement by the sponsor and each financial adviser in the form set out in Practice Note 12A.
(5) Unless the Exchange prescribes otherwise, the issuer must comply with the requirements set out in Appendix 4F which sets out the following:
(a) the main steps in the very substantial acquisition or reverse takeover process; and
(b) documents to be submitted by the sponsor to the Exchange. The sponsor must give the Exchange any additional information or documents which the Exchange requires, either in the particular case or generally.
(6) The issuer's sponsor must provide the confirmation required in Appendix 10A that the enlarged group is suitable for listing and complies with the Rules.
Refer to Appendix 10A — Reverse Takeover / Very Substantial Acquisition Listing Confirmation.
Refer to Appendix 10A — Reverse Takeover / Very Substantial Acquisition Listing Confirmation.
(7) The Exchange may suspend the securities of the issuer until:
(a) the information required in Rule 1010 has been announced (unless the only information missing is insignificant); and
(b) the issuer has met the admission requirements set out in Rule 1015(3)(a).
(8) Rule 1015 does not apply in the case of an acquisition of profitable asset(s) if the only limit breached is Rule 1006(b).
(9) Where a very substantial acquisition or reverse takeover is not completed or is rescinded by any party to the transaction due to any reason, the issuer must immediately announce via SGXNET the following:
(a) the reasons for the non-completion or rescission of the transaction;
(b) the financial impact of the non-completion or rescission on the issuer; and
(c) the possible course(s) of action to protect the interests of the shareholders of the issuer. Notwithstanding this, the issuer must provide timely updates on the specific course of action including its progress and outcome.
Amended on 31 January 200831 January 2008, 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 10 August 201210 August 2012 and 7 February 20207 February 2020.
1016
The Exchange normally applies the same criteria for IPO to reverse takeovers and may modify any requirement in this Chapter or impose additional requirements if it considers it appropriate, taking into account the rationale for the acquisition, the nature of the issuer's business and its track record.
Amended on 10 August 201210 August 2012.
1017 Cash Companies
(1) If the assets of an issuer consist wholly or substantially of cash or short-dated securities, the issuer must consult its sponsor and notify the Exchange. The issuer's securities will normally be suspended. The suspension will remain in force until the issuer has a business which is able to satisfy the Exchange's requirements for a new listing, and all relevant information has been announced. Upon completion of the disposal of its operations and/or assets, the issuer must do the following:
(a) Place 90% of its cash and short-dated securities (including existing cash balance and the consideration arising from the disposal(s) undertaken by the issuer) in an account opened with and operated by an escrow agent which is part of any financial institution licensed and approved by the Authority. The amount that is placed in the escrow account cannot be drawn down until the completion of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing, except for payment of expenses incurred in a reverse takeover approved by shareholders and pro-rata distributions to shareholders; and
(b) Provide monthly valuation of its assets and utilisation of cash, and quarterly updates of milestones in obtaining a new business, to the market via SGXNET.
Taking the above compliance into account, the Exchange may allow continued trading in a cash company's securities on a case-by-case basis, subject to:
(c) Contractual undertakings from the issuer's directors, controlling shareholders, chief executive officer and their associates, to observe a moratorium on the transfer or disposal of all their interests, direct and indirect, in the securities of the issuer; and
(d) The period of the moratorium must commence from the date the shareholders approve the disposal of business, up to and including the completion date of the acquisition of a business which is able to satisfy the Exchange's requirements for a new listing.
(2) The Exchange will proceed to remove an issuer from the Official List if it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company. The issuer may (through its sponsor) apply to the Exchange for a maximum 6-month extension to the 12-month period if it has already signed a definitive agreement for the acquisition of a new business, of which the acquisition must be completed in the 6-month extension period. The extension is subject to the issuer providing information to investors on its progress in meeting key milestones in the transaction. In the event the issuer is unable to meet its milestones, or complete the relevant acquisition despite the extension granted, no further extension will be granted and the issuer will be removed from the Official List and a cash exit offer in accordance with Rule 1308 should be made to its shareholders within 6 months.
Amended on 29 September 201129 September 2011, 7 October 20157 October 2015 and 7 February 20207 February 2020.
1018
The following Rules apply to options to acquire or dispose of assets, in addition to the other requirements in this Chapter:
(1) If the option is not exercisable at the discretion of the issuer, shareholder approval must be obtained at the time of grant of the option.
(2) If the option is exercisable at the discretion of the issuer and the exercise terms are fixed at the time of grant, shareholder approval must be obtained at the time of grant of the option.
(3) If the option is exercisable at the discretion of the issuer and the exercise terms are not fixed, but are based on factors existing at the time of exercise, the issuer must obtain shareholder approval at the time of exercise of the option. At the time of acquisition or grant of the option, the issuer must make an appropriate announcement.
1101
This Chapter sets out the requirements which apply to takeovers. Other requirements can be found in the Takeover Code for Singapore companies.
1102
Where an issuer receives a notice from an offeror of its intention to make a takeover offer, it must:
(1) notify its sponsor;
(2) request suspension of trading in its listed securities; and
(3) make an immediate announcement. .
1103
An offeree company must send to all holders of shares that are not the subject of the takeover offer and holders of convertible securities, a copy of all documents sent to the holders of shares which are the subject of the takeover offer.
1104
Where a takeover offer is made for the securities of an issuer, upon the announcement by the offeror that acceptances have been received that bring the holdings owned by the Offeror Concert Party Group to above 90% of the total number of issued shares excluding treasury shares, the Exchange may suspend the trading of such securities in the Ready and Unit Share markets, until it is satisfied that at least 10% of the total number of issued shares excluding treasury shares, are held by at least 200 shareholders who are members of the public.
Amended on 11 July 201911 July 2019.
1201
This Chapter sets out the requirements that apply to circulars and annual reports issued to the holders of listed securities.
1202
Each of the directors or vendors of an issuer is required to accept responsibility for the accuracy of the information in a circular sent to shareholders and a statement to that effect, as set out in Practice Note 12A, must be incorporated in the circular.
Amended on 29 September 201129 September 2011.
1203
Any circular sent by an issuer to its shareholders must:
(1) contain all information necessary to allow shareholders to make a properly informed decision or, if no decision is required, to be properly informed;
(2) advise shareholders that if they are in any doubt as to any action they should take, they should consult independent advisers;
(3) state that the Exchange takes no responsibility for the accuracy of any statements or opinions made or reports contained in the circular;
(4) comply with specific circular requirements in the Listing Manual, for example:
| Corporate Action | Rules requiring specific information to be disclosed in the circulars to the shareholders |
| (a) Rights issues | Appendix 8A |
| (b) Bonus issues and subdivision of shares | Rule 839 |
| (c) Issue of warrants and other convertible securities | Rule 832 |
| (d) Employee share option schemes | Rules 854, 855, 856, 857 and 860 |
| (e) Share buy-backs | Rule 868 |
| (f) Scrip dividends | Rule 861(1) |
| (g) Interested person transactions | Rules 920(1)(b) and 921 |
| (h) Significant transactions | Rule 1014 |
| (i) Very substantial acquisitions or reverse takeovers | Rule 1015(4) |
(5) include an appropriate statement if a person is required to abstain from voting on a proposal at a general meeting by a listing rule or pursuant to any court order. Such statement must set out that the issuer will disregard any votes cast on a resolution by the person required to abstain from voting by the listing rule or pursuant to a court order where such court order is served on the issuer;
(6) include on the front cover the statement required by Rule 753(2); and
(7) name the financial adviser appointed (if any) in the circular, and where required by SGX, include a responsibility statement from the financial adviser in respect of such information contained in the circular as required by SGX, as set out in Practice Note 12A.
Amended on 29 September 201129 September 2011, 31 March 201731 March 2017 and 7 February 20207 February 2020.
1204
The annual report must contain enough information for a proper understanding of the performance and financial conditions of the issuer and its principal subsidiaries, including at least the following:
General Information
(1) The name of the company's secretary.
(2) The address, telephone number, facsimile number and electronic mail address (if any) of the registered office.
(3) The address of each office at which a register of securities is kept.
(4)
(a) A review, in as much detail as appropriate, of the operating and financial performance of the issuer and its principal subsidiaries in the last financial year.
(b) The review must include each of the following:
(i) Any development subsequent to the release of the issuer's preliminary financial statement, which would materially affect the issuer's operating and financial performance.
(ii) An analysis of the business outlook.
(iii) Prospectus-type information relating to the background of directors and key management staff.
(iv) Prospectus-type information relating to risk management policies and processes.
(c) Issuers are encouraged (but not required) to follow the OFR Guide when preparing their reviews.
(5)
(a) The annual audited accounts (consolidated).
(b) The audited balance sheet (unconsolidated) of the issuer.
(c) The cashflow statement (consolidated).
(d) A statement whether or not the financial statements are prepared in accordance with the prescribed accounting standards and audited in accordance with the prescribed auditing standards, each as prescribed under Rule 709A.
(e) Disclosure of the nature and financial effect of, and justification for any deviation from the prescribed accounting standards, together with the auditors' confirmation of their agreement to the deviation and a statement by the auditors that the deviation is necessary to present "true and fair" financial statements.
(f) A status report on the use of proceeds raised from the initial public offer and additional issue of securities. Where the use of proceeds materially deviates from the proposed use previously disclosed, the issuer must state the reasons for the deviation.
(6)
(a) The aggregate amount of fees paid to auditors, broken down into audit and non-audit services. If there are no audit or non-audit fees paid, to make an appropriate negative statement.
(b) Confirmation by the audit committee that it has undertaken a review of all non-audit services provided by the auditors and they would not, in the audit committee's opinion, affect the independence of the auditors.
(7) A statement (as at the 21st day after the end of the financial year) showing the direct and deemed interests of each director of the issuer in the issuer's shares and convertible securities.
(8) Particulars of material contracts of the issuer and its subsidiaries involving the interests of the chief executive officer, each director or controlling shareholder, either still subsisting at the end of the financial year or if not then subsisting, entered into since the end of the previous financial year. In the case of a loan, also state:
(a) the names of the lender and the borrower;
(b) the relationship between the lender and the borrower and whether the director or controlling shareholder is the lender or borrower;
(c) the amount of the loan;
(d) the interest rate;
(e) the terms as to payment of interest and repayment of principal; and
(f) the security provided.
If no material contract has been entered into, make an appropriate negative statement.
(9) A statement (made up to a date not more than 1 month before the date of the notice of the annual general meeting or summary financial statement, whichever is earlier) indicating the date of such statement and setting out:
(a) the number of holders of each class of equity securities and the voting rights attaching to each class;
(b) a distribution schedule of each class of equity securities (including convertible securities) other than share options referred to in Rule 1204(16), setting out the number of holders in the following categories:
| 1 | - | 99 |
| 100 | - | 1,000 |
| 1,001 | - | 10,000 |
| 10,001 | - | 1,000,000 |
| 1,000,001 | and | Above |
(c) the names of the substantial shareholders and a breakdown of their direct and deemed interests as shown in the company's Register of Substantial Shareholders. For deemed interests, the issuer must disclose how such interests are held or derived;
(d) for each class of equity securities, the names of the 20 largest holders and the number held;
(e) the percentage of shareholding held in the hands of public and confirmation that Rule 723 is complied with;
(f) the number of treasury shares held;
(g) the number of subsidiary holdings held; and
(h) the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed.
(10) The board must comment on the adequacy and effectiveness of the issuer's internal controls (including financial, operational, compliance and information technology controls) and risk management systems. A statement on whether the audit committee concurs with the board's comment must also be provided. Where material weaknesses are identified by the board or audit committee, they must be disclosed together with the steps taken to address them.
(10A) The relationship between the chairman and chief executive officer of the issuer must be disclosed if they are immediate family members.
(10B) All directors, including their designations (i.e. independent, non-executive, executive, etc.) and roles (as members or chairmen of boards or board committees), must be identified in the annual report.
(10C) Audit committee's comment on whether the internal audit function is independent, effective and adequately resourced.
(10D) The names, amounts and breakdown of remuneration paid to each individual director and the chief executive officer by the issuer and its subsidiaries. Such breakdown must include (in percentage terms) base or fixed salary, variable or performance-related income or bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives.
Land and Buildings
(11) In respect of land and buildings, a breakdown of the value in terms of freehold and leasehold. Where properties have been revalued, to state the portion of the aggregate value of land and buildings that is based on valuation, and to state the valuation date. The valuation of real property must be carried out by a property valuer in accordance with the property valuation standards. Where the aggregate value for all properties for development, sale or for investment purposes held by the group represent more than 15% of the value of the consolidated net tangible assets, or contribute more than 15% of the consolidated pre-tax operating profit, the issuer must disclose the following information as a note to the financial statements:
(a) In the case of property held for development and/or sale:
(i) a brief description and the location of the property;
(ii) if in the course of construction, the stage of completion as at the date of the annual report and the expected completion date;
(iii) the existing use (e.g. shops, offices, factories, residential, etc);
(iv) the site and gross floor area of the property; and
(v) the percentage interest in the property.
(b) In the case of property held for investment:
(i) a brief description and the location of the property;
(ii) the existing use (e.g. shops, offices, factories, residential, etc); and
(iii) whether the property is leasehold or freehold. If leasehold, state the unexpired term of the lease.
Provided that if, in the opinion of the directors of the issuer, the number of such properties is such that compliance with this rule would result in particulars of excessive length being given, compliance is required only for properties, which in the opinion of the directors, are material.
[Deleted]
(12) [Deleted]
(13) [Deleted]
(14) [Deleted]
(15) [Deleted]
Employee Share Option Scheme
(16) The information required by Rule 851 in respect of any employee share option (or share incentive) scheme.
Interested Person Transactions
(17) The information required by Rule 907 in respect of any interested person transactions entered into during the financial year.
(18) The information required by Rule 710.
Whistleblowing Policy
(18A) A statement that the issuer has put in place a whistleblowing policy which sets out the procedures for a whistleblower to make a report to the issuer on misconduct or wrongdoing relating to the issuer and its officers.
(18B) An explanation of how the issuer has complied with the following: —
(a) the issuer has designated an independent function to investigate whistleblowing reports made in good faith;
(b) the issuer ensures that the identity of the whistleblower is kept confidential;
(c) the issuer discloses its commitment to ensure protection of the whistleblower against detrimental or unfair treatment; and
(d) the Audit Committee is responsible for oversight and monitoring of whistleblowing.
Dealings in Securities
(19) A statement whether and how the issuer has complied with the following best practices on dealings in securities:
(a) A listed issuer should devise and adopt its own internal compliance code to provide guidance to its officers with regard to dealing by the listed issuer and its officer in its securities;
(b) An officer should not deal in his company's securities on short-term considerations; and
(c) A listed issuer and its officers should not deal in the listed issuer's securities during the period commencing two weeks before the announcement of the company's financial statements for each of the first three quarters of its financial year and one month before the announcement of the company's full year financial statements (if the issuer announces its quarterly financial statements, whether required by the Exchange or otherwise), or one month before the announcement of the company's half year and full year financial statements (if the issuer does not announce its quarterly financial statements).
Sponsorship
(20) Include on the front cover the statement required by Rule 753(2).
(21) The amount of non-sponsor fees paid to the sponsor. If none, make an appropriate negative statement.
Use of Proceeds
(22) If applicable, a status report on the use of IPO proceeds and any proceeds arising from any offerings pursuant to Chapter 8 and whether the use of proceeds is in accordance with the stated use and is in accordance with the percentage allocated in the offer document or the announcement of the issuer. Where the proceeds are used for general working capital purposes, the issuer must announce a breakdown with specific details on the use of proceeds for working capital. Where there is any material deviation from the stated use of proceeds, the issuer must also announce the reasons for such deviation.
Mineral, Oil and Gas Activities
(23) In the case of mineral, oil and gas companies, a summary of reserves and resources as at the end of the issuer's financial year as set out in Appendix 7D. The issuer must comply with Rule 704(35)(a) if there are material changes to its reserves and resources.
Amended on 1 February 20111 February 2011, 29 September 201129 September 2011, 29 September 201129 September 2011, 27 September 201327 September 2013 19 January 201519 January 2015, 20 July 201620 July 2016, 31 March 201731 March 2017, 23 August 201823 August 2018, 1 January 20191 January 2019, 7 February 20207 February 2020, 7 February 20207 February 2020, 12 February 2021, 1 January 2022 and 11 January 2023.
1205
An issuer may send documents, including notices, circulars and annual reports, using electronic communications to a shareholder, if there is express consent from that shareholder.
Added on 31 March 201731 March 2017.
1206
An issuer may send documents, including circulars and annual reports, using electronic communications to a shareholder, if:
(1) there is deemed consent from that shareholder, on the basis that:
(a) the Articles of Association or other constituent document of the issuer:
(i) provides for the use of electronic communications;
(ii) specifies the manner in which electronic communications is to be used; and
(iii) specifies that the shareholder will be given an opportunity to elect within a specified period of time, whether to receive such document by way of electronic communications or as a physical copy; and
(b) the issuer has separately notified the shareholder directly in writing on at least one occasion of the following:
(i) that the shareholder has a right to elect, within a time specified in the notice from the issuer, whether to receive documents in either electronic or physical copies;
(ii) that if the shareholder does not make an election, documents will be sent to the shareholder by way of electronic communications;
(iii) the manner in which electronic communications will be used is the manner specified in the Articles of Association or other constituent document of the issuer;
(iv) that the election is a standing election, but that the shareholder may make a fresh election at any time; and
(v) until the shareholder makes a fresh election, the election that is conveyed to the issuer last in time prevails over all previous elections as the shareholder's valid and subsisting election in relation to all documents to be sent; or
(2) there is implied consent from that shareholder, on the basis that the Articles of Association or other constituent document of the issuer:
(a) provides for the use of electronic communications;
(b) specifies the manner in which electronic communications is to be used; and
(c) provides that the shareholder shall agree to receive such document by way of such electronic communications and shall not have a right to elect to receive a physical copy of such document.
Added on 31 March 201731 March 2017.
1206A
Rules 1207-1209 apply if the issuer sends documents using electronic communications under Rule 1206.
Added on 31 March 201731 March 2017.
1207
Notwithstanding Rule 1206, an issuer shall send the following documents to shareholders by way of physical copies:
(1) forms or acceptance letters that shareholders may be required to physically complete;
(2) notice of meetings, excluding circulars or letters referred in that notice;
(3) notices and documents relating to takeover offers and rights issues; and
Added on 31 March 201731 March 2017.
1208
When an issuer uses electronic communications to send a document to a shareholder, the issuer shall inform the shareholder as soon as practicable of how to request a physical copy of that document from the issuer. The issuer shall provide a physical copy of that document upon such request.
Added on 31 March 201731 March 2017.
1209
If the issuer uses website publication as the form of electronic communications, the issuer shall separately provide a physical notification to shareholders notifying of the following:
(1) the publication of the document on the website;
(2) if the document is not available on the website on the date of notification, the date on which it will be available;
(3) the address of the website;
(4) the place on the website where the document may be accessed; and
(5) how to access the document.
Added on 31 March 201731 March 2017.
1301
This Chapter sets out:
(1) the requirements relating to trading halt, voluntary suspension and withdrawal by the issuer from the Exchange's Official List; and
(2) the powers of the Exchange with regard to trading halt, suspension and delisting of an issuer by the Exchange.
Refer to Practice Note 13A — Procedures for Trading Halt and Suspension.
1302
(1) The Exchange may at any time grant a trading halt to enable the issuer to disclose material information or suspend trading of the listed securities of an issuer at the request of the issuer. The Exchange is not required to act on the request.
(2) The Exchange will, in normal circumstances, act on a request for trading halt or suspension if made by the issuer (and not the sponsor).
(3) If the sponsor forms the opinion that the issuer's securities should be put into a trading halt or suspended, it must advise the issuer accordingly. It must also immediately inform the Exchange. Where there is a difference in opinion between the sponsor and the issuer, the Exchange will take into account both the sponsor's and the issuer's views when acting on such requests.
(4) The trading halt cannot exceed 3 market days or such short extension as the Exchange agrees.
(5) A trading halt may be changed to a suspension by the Exchange at any time.
Refer to Practice Note 13A — Procedures for Trading Halt and Suspension.
1303
The Exchange may at any time suspend trading of the listed securities of an issuer in any of the following circumstances:
(1) If the percentage of an issuer's total number of issued shares excluding treasury shares held in public hands falls below 10%, as provided in Rule 723. In a take-over situation where the offeror succeeds in garnering acceptance exceeding 90% of the issuer's total number of issued shares excluding treasury shares, causing the percentage of the issuer's total number of issued shares excluding treasury shares held in public hands to fall below 10%, the Exchange will suspend trading of the listed securities of the issuer only at the close of the take-over offer.
(2) Where there is a change in the issuer's assets that produces a situation where its assets consist wholly or substantially of cash or short-dated securities, as provided in Rule 1017.
(3) Where the issuer is unable to continue as a going concern or unable to demonstrate to the Exchange and its shareholders that it is able to do so, including the following circumstances:
(a) when an application is filed with a court to place the issuer (or significant subsidiary) under judicial management;
(b) when an application is filed with a court for the liquidation of the issuer (or significant subsidiary) and the amount of the debt alleged is significant; or
(c) when the issuer is unable to reasonably assess its financial position and inform the market accordingly.
(4) Where the issuer is unable or unwilling to comply with, or contravenes, a listing rule.
(5) Where, in the opinion of the Exchange, it is necessary or expedient in the interest of maintaining a fair, orderly and transparent market.
(6) Where the issuer does not have a sponsor.
(7) Where, in the opinion of the Exchange, it is appropriate to do so.
(8) Where the Exchange releases an announcement in relation to the issuer which, in the opinion of the Exchange, is market sensitive.
Refer to Practice Note 13A — Procedures for Trading Halt and Suspension.
1304
If the trading of the listed securities of an issuer is suspended under Rule 1303(3), it must:
(1) submit a proposal (or proposals) through its sponsor to the Exchange with a view to resuming trading in the issuer's securities ("resumption proposals") within 12 months of the date of suspension. If no resumption proposals are received to enable trading to resume within 12 months of the date of suspension, the Exchange may remove the issuer from the Official List; and
(2) implement the resumption proposals within 6 months from the date the Exchange indicates that it has no objection to the resumption proposals. If the resumption proposals have not been implemented within the 6 months, the Exchange may remove the issuer from the Official List. The issuer is expected to provide monthly valuation of its assets and utilization of cash and updates of milestones in completing the relevant transactions to the market via SGXNET.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
1305
(1) The Exchange may remove an issuer from its Official List (without the agreement of the issuer) if:
(a) the issuer is unable or unwilling to comply with, or contravenes, a listing rule;
(b) in the opinion of the Exchange, it is necessary or expedient in the interest of maintaining a fair, orderly and transparent market;
(c) the issuer does not have a sponsor for more than 3 continuous months;
(d) in the opinion of the Exchange, it is appropriate to do so; or
(e) the issuer has no listed securities.
(2) If the Exchange exercises its power to remove an issuer from the Official List, the issuer or its controlling shareholder(s) must, subject to Rule 1309, comply with the requirements of Rule 1308.
Amended on 11 July 201911 July 2019.
1306
A sponsor must contact the Exchange if it forms the opinion that an issuer it sponsors should be removed from the Official List.
1307
The Exchange may agree to an application by an issuer to delist from the Exchange if:
(1) the issuer convenes a general meeting to obtain shareholder approval for the delisting; and
(2) the resolution to delist the issuer has been approved by a majority of at least 75% of the issuer's total number of issued shares excluding treasury shares and subsidiary holdings held by the shareholders present and voting, on a poll, either in person or by proxy at the meeting. The Offeror Concert Party Group must abstain from voting on the resolution.
Amended on 31 March 201731 March 2017 and 11 July 201911 July 2019.
1308
If an issuer is seeking to delist from the Exchange:
(1) an exit offer must be made to the issuer's shareholders and holders of any other classes of listed securities to be delisted. The exit offer must:
(a) be fair and reasonable; and
(b) include a cash alternative as the default alternative; and
(2) the issuer must appoint an independent financial adviser to advise on the exit offer and the independent financial adviser must opine that the exit offer is fair and reasonable.
Amended on 11 July 201911 July 2019.
1309
(1) Rules 1307 and 1308 do not apply to a delisting pursuant to:
(a) a voluntary liquidation; or
(b) an offer under the Takeover Code provided that the offeror is exercising its right of compulsory acquisition.
(2) Rule 1307 does not apply to a delisting pursuant to a scheme of arrangement.
Amended on 11 July 201911 July 2019.
1401
This Chapter sets out the requirements and procedures for an existing issuer to comply with the Catalist Rules.
1402
The Exchange may from time to time publish additional transition requirements in Practice Notes that must be complied with.
Refer to Practice Note 14A — Catalist Transition Process and Timetable.
1403
(1) The Exchange will publish a date from which all existing issuers must comply with the Catalist Rules ("Transition Date"). At least 12 months' notice will be given.
(2) The Exchange may impose conditions.
(3) An existing issuer must meet the following requirements by the Transition Date:
(a) Complete and submit Appendix 14A with the Exchange.
(b) Comply with any conditions the Exchange imposes.
(c) Announce its intention to the market giving no less than 1 month's notice. The announcement must include:
(i) the name of its sponsor; and
(ii) the date from which it will comply with the Catalist Rules as agreed with the Exchange.
(d) Send a copy of the announcement to each shareholder on the register at the date of the announcement.
(4) Existing issuers on Catalist must continue to comply with the Former Sesdaq Rules until the requirements in Rule 1403(3) have been met.
1404
(1) An existing issuer may be removed from the Official List of Catalist if it has not complied with Rule 1403.
(2) If an existing issuer is delisted, the Exchange may require the existing issuer to offer a reasonable exit alternative, which should normally be in cash, to:
(a) its shareholders; and
(b) holders of any other classes of listed securities to be delisted.
The issuer should normally appoint an independent financial adviser to advise on the exit offer.
1405
(1) An existing issuer that changes from complying with the Former Sesdaq Rules to complying with Catalist Rules, must continue its existing moratorium, if applicable.
(2) Rule 406(1) will not apply to such existing issuers unless the Exchange determines otherwise.
Appendix 2A Catalist Sponsor Application Form
Cross-referenced from Rule 220(1)
| How to complete this application form • Before applying, you should fully understand the eligibility criteria and the obligations of sponsors in the Rules. • Where any of the items below are not applicable to you, please state so explicitly on your application form. • Submit this application form together with all supporting information and documents and the required fee(s). To avoid any delay in processing your application, all information and documents should be provided at the same time as the application. • Return your completed application form in 4 copies to Equity Capital Markets, 2 Shenton Way #02-02, SGX Centre 1, Singapore 068804. |
Part I Application
We, _______________________ (sponsor) apply to be authorised as a sponsor by Singapore Exchange Securities Trading Limited (the Exchange).
We intend to undertake the following activities (tick one or more as appropriate):
Introducing
Continuing
Part II Details of Application
1. Corporate Details
(a) Registered office and operating office in Singapore
(b) Date of registration / incorporation
(c) Registration / incorporation number
(d) Issued capital
(e) Shareholders' funds and financial position
(f) Name and address of principal bankers and auditors
(g) Financial year-end
(h) Current corporate information from the Accounting and Corporate Regulatory Authority (ACRA) (or overseas equivalent)
(i) Contact details of two senior representatives who will act as the liaison officers with the Exchange (name, office DID, home telephone, mobile, facsimile and email)
(j) Corporate structure, including holding company, subsidiaries, associated and related companies. Provide a description of the main lines of business and country of incorporation for each.
2. Corporate Documents
Please attach the following documents:
(a) Directors' resolution approving this application (original)
(b) Certificate of incorporation
(c) Memorandum and Articles of Association
(d) Proof of applicant's current licensing (including Capital Markets Services licence), registration or exempt status where applicable. If not yet issued, provide proof of approval.
(e) Internal manuals covering activities to be undertaken (e.g. corporate finance compliance manual)
(f) Management letter or report on internal controls/ conflicts management issued by internal and external auditors
(g) Audited financial statements for the last 3 years, where applicable
3. Qualifications and Experience
(a) Proof of experience. An applicant must provide a list of relevant transactions in the last 2 years in which it provided corporate finance advisory services (including initial public offerings and post-listing transactions).
(b) Proof of employment of registered professionals
(c) Details of current and former authorities and organisations regulating the applicant (in Singapore and elsewhere). Please include contact details as the Exchange may contact them.
(d) Details of memberships of professional bodies (in Singapore and elsewhere). Please include contact details as the Exchange may contact them.
(e) In respect of each registered professional employed or proposed to be employed, the following details, including completed Catalist Registered Professional Application Forms where relevant:
• Full name
• Passport/ Identity card number
• Residential address in Singapore
• Date of birth
• Nationality
• Qualifications (including degree, CMFAS certificate etc)
• Employment history (including date, organisation, position held, responsibilities etc)
• Description of experience in corporate finance, compliance or any other duties relating to sponsor activities (including date, name of client, extent of involvement etc)
(f) Details of any adverse records of all persons employed or proposed to be employed to carry out the introducing activities or continuing activities.
4. Reputation and Track Record
(a) Details of any initial public offerings or reverse takeovers rejected by any regulatory authority or exchange (in Singapore or elsewhere) in the last 5 years, including the reasons.
(b) Details of any regulatory action taken against the applicant or any member of the Group* or any substantial shareholder, director or key officer of the applicant in the last 5 years (in Singapore or elsewhere).
* Group means the applicant's parent entity, subsidiaries, and related entities.
* Group means the applicant's parent entity, subsidiaries, and related entities.
(c) If there is a potential conflict of interest between the applicant being a sponsor in Catalist and any membership or licence held elsewhere, details of how it will address the conflict.
(d) Details of whether the applicant, any director or key officer of the applicant, or any member of the Group has ever been denied membership/licence or had its membership/licence suspended or revoked by any authority, exchange, market, clearing house or professional body (in Singapore or elsewhere).
(e) Details of whether the applicant, any substantial shareholder, director or key officer of the applicant, or any member of the Group is under investigation (in Singapore or elsewhere).
(f) Details of any censure or disciplinary action taken by any regulatory authority, exchange, market or clearing house over the last 5 years (in Singapore or elsewhere) against the applicant, any director or key officer of the applicant, or any member of the Group.
(g) A statement whether there is or is not any adverse, or potentially adverse, matter involving the applicant, any director or key officer of the applicant, which has been brought to the attention of any relevant regulatory body over the last 5 years (in Singapore or elsewhere).
(h) Whether the applicant, its substantial shareholders, or parent company is the subject of a winding up order made or threatened in any court whether in or out of Singapore, or is in the course of being wound up, and whether there is any resolution passed or proposed by shareholders to that effect.
(i) Whether the applicant, its substantial shareholders, or parent company has an execution or a judgment debt returned unsatisfied in whole or in part, whether in or out of Singapore.
(j) Whether the applicant, its substantial shareholders, or parent company has a receiver, receiver and manager, judicial manager, or person having similar powers and duties appointed in relation to any property, whether in or out of Singapore.
5. Corporate Ownership
(a) List of shareholders and their shareholdings. To provide explanation and diagram to outline the company's ownership structure.
(b) List of other interests of shareholders, including present or past interests in firms providing corporate finance advice.
(c) Relationships between shareholders^
^ For an individual, this could be a spouse, father, mother, son or daughter. For a corporation, this could be the applicant's parent entity, subsidiaries, and related entities.
^ For an individual, this could be a spouse, father, mother, son or daughter. For a corporation, this could be the applicant's parent entity, subsidiaries, and related entities.
(d) Name(s) of person(s) who have ultimate controlling interest in the applicant. State their address, nationality, identification number, occupation and directorships in other companies.
(e) Particulars of substantial shareholders. If a substantial shareholder is an individual, provide the nationality, identification/passport number, occupation, address, record of offences and directorships in other companies. If a substantial shareholder is a corporation, provide place of incorporation, company registration number, address and record of offences.
6. Business Operations
(a) Brief history of the applicant, main lines of business and business volume in the last 3 years.
(b) Brief history and main lines of business of the parent company.
(c) Names of any other exchanges, markets or clearing houses where the applicant holds membership or is licenced. Include ranking and business volume.
(d) A business plan or proposed business model for Singapore, including main business activities, products and services to be provided and expected client base.
(e) State whether the applicant, its parent, or related companies have established any other operations in Singapore or have any equity interest of 5% or more in any Singapore company. If so, provide details.
(f) State whether the applicant has a business function or proposes to set up a business function which may create a conflict of interest with the proposed sponsor activities (e.g. research, broking and market-making). Information should be provided regarding such functions and the procedures which will be put in place to avoid any conflict of interest with sponsor activities.
7. Corporate Governance
(a) Particulars of directors and key officers, including name, nationality, identification/passport number, occupation, address, record of offences, shareholdings in the applicant and interests of 5% or more in other companies and other directorships.
(b) Whether any substantial shareholder, present director or key officer has ever been convicted of an offence, or disciplined for breaching any criminal law, or been found to have contravened any rules or regulations of any government, regulatory or exchange authority.
(c) Organisation chart showing names, qualifications and experience of relevant employees. If the applicant is yet to be incorporated, a proposed organisation chart should be given together with the name, qualification and experience of the person who will be in charge of the proposed operations.
Part III Terms of Application
8. Agreement
By applying for authorisation we agree:
(a) That our authorisation (or refusal of it) is in the Exchange's absolute discretion. The Exchange may authorise us on any condition or restriction it decides. The Exchange is not obliged to give reasons.
(b) That the Exchange may contact the advisory panel or any organisation (regulatory or professional) about our application and may give them and receive from them any information or documents considered by the Exchange, the advisory panel or that organisation to be relevant.
(c) That the Exchange may take any action, disciplinary or otherwise, against us under the Rules.
(d) That the Exchange may make public any action taken against us and the reasons as set out in the Rules.
(e) To pay all fees, charges, costs and fines under the Rules.
(f) To submit to the non-exclusive jurisdiction of the courts of Singapore.
(g) That the proper law of this agreement is Singapore law.
9. Undertaking
If the Exchange approves our application, we undertake to:
(a) Comply with the Rules (as amended from time to time), and all conditions and restrictions imposed by the Exchange.
(b) Discharge our responsibilities as a sponsor fairly and honestly.
(c) Notify the Exchange as soon as practicable if:
(i) We become subject to any investigation by a regulatory authority or law enforcement agency;
(ii) We become subject to any disciplinary action by a regulatory authority or law enforcement agency;
(d) Our capital position falls below the minimum required; or
(e) An unavoidable conflict arises (and in this event we will take directions as to the conduct of the matter from the Exchange).
(f) Cooperate fully (by providing information, documents, witnesses, answers to queries, and access to premises) in any review, audit or investigation conducted by the Exchange under the Rules.
(g) Accept as final, binding and conclusive any decision made by the Exchange, the Disciplinary Committee or Appeals Committee.
10. Warranty
We warrant to the Exchange that:
(a) All matters and information relevant to the application have been submitted to the Exchange.
(b) The information and documents provided with our application are complete and accurate. If any information or document is not available now, we will provide it to the Exchange before our application is approved.
(c) All additional information provided, whether at the request of the Exchange or pursuant to paragraph 10(b), will also be complete and accurate.
11. Indemnity
We indemnify the Exchange and its staff, agents and delegates (including members of the Disciplinary Committee, Appeals Committee and admission advisory panel) to the fullest extent permitted by law in respect of any claim, action, other civil liability, or expense arising from or connected with:
(a) Anything done or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of their obligations under the law or the Rules.
(b) Any breach of the above agreement, undertakings and warranties.
| Dated: _________________ | |
| Signed on behalf of sponsor: | ____________________________ |
| (Name and designation of person signing) | |
| Dated: _________________ | |
| Signed on behalf of sponsor: | ____________________________ |
| (Name and designation of person signing) |
Note: proper execution required — e.g. if the entity has a seal, execution must be under seal.
Amended on 1 February 20161 February 2016 and 7 February 20207 February 2020.
Appendix 2B Catalist Registered Professional Registration Form
Cross-referenced from Rule 220(1)
| How to complete this application form • Before applying, you should fully understand the eligibility criteria and the obligations of registered professionals in the Rules. • Where any of the items below are not applicable to you, please state so explicitly on your registration form. • Submit this registration form together with all supporting information and documents and the required fee(s). To avoid any delay in processing your registration, all information and documents should be provided at the same time as the registration. • Return your completed registration form in 4 copies to Equity Capital Markets, 2 Shenton Way #02-02, SGX Centre 1, Singapore 068804. |
Part I Application
I, _______________________ (registered professional) apply to be registered by Singapore Exchange Securities Trading Limited (the Exchange) as a registered professional.
I intend to undertake the following activities with my sponsor (tick one or more as appropriate):
Introducing
Continuing
My sponsor *is / will be _______________________________ .
Part II Details of Application
NOTE: If the registered professional is seeking re-registration, he/she need only update the information last given to the Exchange.
1. Personal Details
(a) Full name
(b) Passport/ identity card number
(c) Residential address in Singapore
(d) Date of birth
(e) Nationality
(f) Qualifications (including degreesand certificates of regulatory examinations)
(g) A copy of the applicant's CV detailing employment history (including dates, organisations, positions held, and responsibilities)
(h) Description of experience in corporate finance, compliance or any other duties relating to sponsor activities (including date, name of client, extent of involvement etc)
(i) Contact details (office DID, home telephone, mobile, facsimile and email)
2. Qualifications and Experience
(a) Proof of applicant's current licenses (including Capital Markets Services representative's licence), registration or exempt status where applicable. If not yet issued, provide proof of approval.
(b) Proof of experience in relevant activities (as applicable — corporate finance advisory, related advisory, accounting, auditing or finance work) as required in Rule 204(7) and Rule 205(7).
(c) Details of current and former authorities and organisations regulating the applicant (in Singapore and elsewhere). Please include contact details as the Exchange may contact them.
(d) Details of memberships of professional bodies (in Singapore and elsewhere). Please include contact details as the Exchange may contact them.
3. Reputation and Track Record
(a) Details of any initial public offerings or reverse takeovers rejected by any regulatory authority or exchange (in Singapore or elsewhere) in the last 5 years, including reasons.
(b) Details of any offence, breach of contract, investigation or disciplinary action by a regulator, law enforcement agency, exchange or professional body over the last 10 years (in Singapore or elsewhere).
(c) Details of whether the applicant is under investigation (in Singapore or elsewhere).
(d) A statement whether there is or is not any adverse, or potentially adverse, matter which has been brought to the attention of any relevant regulatory body over the last 10 years (in Singapore or elsewhere).
(e) Details of whether the applicant has ever been denied a licence or had a membership or licence revoked by any authority, exchange, market, clearing house or professional body (in Singapore or elsewhere).
Part III Contractual
4. Agreement
By applying for registration I agree:
(a) That my registration (or refusal of it) is in the Exchange's absolute discretion. The Exchange may register me on any condition or restriction it decides. The Exchange is not obliged to give reasons.
(b) That the Exchange may contact the advisory panel or any organisation (regulatory or professional) about my application and may give them and receive from them any information or documents considered by the Exchange, the advisory panel or that organisation to be relevant.
(c) That the Exchange may enforce any action, disciplinary or otherwise, under the Rules.
(d) That the Exchange may make public any action taken and the reasons as set out in the Rules.
(e) To pay all fees, charges and costs under the Rules.
(f) To submit to the non-exclusive jurisdiction of the courts of Singapore.
(g) That the proper law of this agreement is Singapore law.
5. Undertaking
If the Exchange approves my application, I undertake to:
(a) Comply with the Rules (as amended from time to time), and all conditions and restrictions imposed by the Exchange.
(b) Discharge my responsibilities as a registered professional fairly and honestly.
(c) Notify the Exchange as soon as practicable if:
(i) I become subject to any investigation by a regulatory authority or law enforcement agency;
(ii) I become subject to any disciplinary action by a regulatory authority or law enforcement agency (other than the Exchange);
(iii) I am disqualified by a court form acting as a director of any company or from acting in the management or conduct of a company's affairs; or
(iv) I am no longer engaged in a proper capacity (e.g., full time) by my sponsor.
(d) Cooperate fully (by providing information, documents, and answers to queries) in any review or investigation conducted by the Exchange.
(e) Accept as final, binding and conclusive any decision made by the Exchange, or the Disciplinary Committee or Appeals Committee.
6. Warranty
I warrant to the Exchange that:
(a) All matters and information relevant to the application have been submitted to the Exchange.
(b) The information and documents provided with my application are complete and accurate. If any information or document is not available now, I will provide it to the Exchange before my application is approved.
(c) All additional information provided, whether at the request of the Exchange or pursuant to paragraph 6(b), will also be complete and accurate.
*Delete where not applicable.
| Dated:_____________________________ | |
| Signed by registered professional applicant: | _____________________________ |
| (Name of person signing) |
Part IV Declaration by Sponsor or Sponsor Applicant
7. Declaration
We declare to the Exchange that:
(a) We support this application.
(b) The above registered professional applicant is *employed full time by us / will be employed full time by us in the event this application is approved.
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | _____________________________ |
| (Name and designation of person signing) |
Amended on 1 February 20161 February 2016 and 7 February 20207 February 2020.
Appendix 2C Change of Sponsor Confirmation
Cross-referenced from Rule 224(2)(b)
We __________________________ (name of sponsor), notify the Exchange that with effect from _________________ , we will act as sponsor for ___________________ (name of issuer).
1. We confirm:
(a) We are independent from the issuer and are able to demonstrate it to the Exchange, if required.
(b) We hold a full mandate to undertake the relevant sponsorship activities for the issuer.
2. In relation to paragraph 1(a) of the above declaration, we disclose the following.
(a) *We, our partners, directors, employees and associates of such partners, directors and employees, either individually or collectively, *have/do not have any interest# in any class of securities of the sponsored issuer above 5% of the total issued securities. Details of such interest (if any) are as follows:_____________.
(b) Our *partners, directors, employees and associates of such partners, directors and employees involved in providing advice to the sponsored issuer *have/do not have a directorship in the sponsored issuer. Details of such directorship (if any) are as follows:_______________.
*Delete where not applicable.
# Reference to an 'interest in securities' shall include rights, options and warrants (or similar financial products, where applicable) as if they have been exercised.
| Dated: ________________ | |
| Signed on behalf of sponsor: | ________________________________ |
| (Name and designation of person signing) |
Amended on 7 February 20207 February 2020.
Appendix 2D Sponsor Independence
Cross-referenced from Rules 204(8), 205(8), 224(3)(g) and 224(4)(d)
Part I Introduction
1. This Appendix sets out the minimum requirements with regards to a sponsor's obligations under Rules 204(8), 205(8), 224(3)(g) and 224(4)(d) in which the sponsor must be independent of and have no conflicts of interest with the issuers it sponsors.
2. A sponsor, its partners, directors, officers, registered professionals and employees must be able to demonstrate independence from the issuer at all times. The proof of independence, or absence of conflict, rests with the sponsor.
Part II Independence Requirements
3. The sponsor should have adequate procedures to avoid any conflict of interest that may arise from sponsor activities and other business activities (if undertaken by the sponsor or its parent, related or associated entity). At least the following is required:
(a) Separation between the functions undertaking sponsor activities and other relevant business activities.
(b) Separate reporting lines for the functions undertaking sponsor activities and other relevant business activities.
(c) Restriction of communication and information flow between sponsor activities and other activities to avoid leakage of sensitive information, including procedures to ensure that its officers, registered professionals and employees do not divulge any confidential information to any person who is not entitled to receive the information, and to ensure that they exercise due care to prevent any leakage of confidential information.
(d) Restriction of access into the function(s) undertaking sponsor activities to authorised officers, registered professionals and employees.
(e) Satisfy the Exchange that proper safeguards are in place if a sponsor wishes to act as both the sponsor and reporting auditor and/or ongoing auditor of an issuer.
(f) Where the sponsor is not a trading member of SGX-ST, notify the Exchange in writing at least 14 days before it establishes a business function which may create a conflict of interest with sponsor activities, including research, broking and market-making. The sponsor must supply the Exchange with information regarding the proposed function and the procedures in place to avoid any conflict of interest with sponsor activities.
4. The sponsor must adhere to the following practices within the function undertaking sponsor activities:
(a) An employee within the function undertaking sponsor activities may, either directly or indirectly, have an interest* of 5% or more in the securities of the sponsored issuer, provided adequate safeguards are in place to prevent any conflict of interest.
* Reference to an 'interest in securities' in this Appendix shall include rights, options and warrants (or similar financial products, where applicable) as if they have been exercised.
* Reference to an 'interest in securities' in this Appendix shall include rights, options and warrants (or similar financial products, where applicable) as if they have been exercised.
(b) An employee within the function undertaking sponsor activities may not, either directly or indirectly, have an interest of more than 10% in the securities of a sponsored issuer. If the limit is breached, the sponsor must immediately inform the Exchange and use its best endeavours to sell down to within the guidelines as soon as practicable.
(c) A sponsor should not advise other parties in a transaction, including any acquisition or takeover, involving its sponsored issuers, other than the issuer itself.
(d) A sponsor must take care to avoid the appearance of a conflict between interests of its sponsored issuers and those of any other party.
5. A sponsor should have controls over trading in restricted securities:
(a) A sponsor, or a partner or director of a sponsor, or associate of any such partner or director, may individually or collectively, have an interest either directly or indirectly of 5% or more in the securities of a sponsored issuer, provided that adequate safeguards are in place to prevent any conflict of interest. With proper safeguards, an asset management business operated by the sponsor is not subject to this limit.
(b) A sponsor, or a partner or director of a sponsor, or associate of any such partner or director, may not either individually or collectively, have an interest either directly or indirectly of more than 10% in the securities of a sponsored issuer. If the limit is breached, the sponsor must immediately inform the Exchange and use its best endeavours to sell down to within the guidelines as soon as practicable. With proper safeguards, an asset management business operated by the sponsor is not subject to this limit.
(c) No partner, director or employee of a sponsor, or associate of any such partner, director or employee, may deal in the securities or any related financial product of a sponsored issuer during any closed period of that issuer.
(d) No partner, director or employee of a sponsor, or associate of any such partner, director or employee, may deal in the securities or any related financial product of a sponsored issuer during any open period of that issuer without the prior written approval of a senior management staff. If the sponsor also has a dealing function, the person intending to deal in the securities must be independent of sales or dealing. Each trade must be separately approved.
(e) Policies, procedures and controls must ensure that any partner, director, or employee of a sponsor who is privy to confidential information regarding a sponsored issuer or any other issuer does not use such information to trade for their own benefit or for an associate of any such partner, director or employee. For this purpose, a sponsor should maintain a list of restricted securities which should be circulated only to the relevant personnel.
(f) Policies, procedures and controls must be implemented to monitor the trading activities of all partners, directors, employees of a sponsor and associates of any such partner, director or employee in sponsored issuers. The frequency of reviews should be at a level where the sponsor is confident that its policies, procedures and controls are being complied with.
6. No partner, director, employee of a sponsor or associate of any such partner, director or employee may hold the position of a director of a sponsored issuer.
Appendix 2E Sponsor's Annual Return
Cross-referenced from Rule 233
Part I Sponsor's Details
A sponsor must lodge an annual return no later than 90 calendar days after its financial year end.
1. The return must attach the following documents:
(a) Latest audited accounts
(b) Details of any material adverse change in financial position
(c) Details of registered professionals as below
(d) Details of changes in the sponsor's substantial shareholders, directors or key officers
(e) Details of censures, disciplinary actions or investigations or other relevant matters involving the sponsor or any member of the Group^, or its substantial shareholders, directors, officers, registered professionals and employees
^ Group means the applicant's parent entity, subsidiaries, and related entities.
^ Group means the applicant's parent entity, subsidiaries, and related entities.
(f) Details of issuers for whom the sponsor acts
(g) Details of fees earned from each issuer for non-sponsor work (including the type of work performed), where such fees are in excess of 100% of the fees earned from sponsor work
(h) Details of any material changes to the information previously supplied in the sponsor application form
2. The return must also include a confirmation that:
(a) The documents and information supplied in this return are accurate, complete and not misleading.
(b) The sponsor continues to meet the eligibility requirements in the Rules, and the conditions and restrictions imposed by the Exchange.
(c) The sponsor continues to have a sufficient number of registered professionals.
(d) There are no changes to the information previously supplied to the Exchange except as identified in the return.
(e) The following issuers are sponsored:
| Name of issuer | Sponsor activities undertaken | Name of registered professionals involved | Date when contract entered | Date when contract expires |
(f) The following listing applicants were rejected by the sponsors (to provide names of the listing applicants and reasons for the rejection).
Part II Registered Professionals' Details
3. This return must attach the following documents:
(a) Names of all registered professionals
(b) Details of any additional qualifications obtained for any of its registered professionals
4. This return must also include confirmation that:
(a) There has been no material change to any of its registered professionals' declarations in the registration forms submitted to the Exchange, except as identified in this return.
(b) The following registered professionals are/ were involved in the following transactions :
| Transaction | Details | Name of registered professionals involved |
(c) No disciplinary actions are being conducted, or threatened, against any registered professional except __________________________ (if none, write nil).
Appendix 4A Pre-Admission Notification
Cross-referenced from Appendix 4F
Part I Initial Public Offering
1. A sponsor must submit to the Exchange a pre-admission notification for an initial public offering that includes the following information:
(a) Summary information on the listing applicant, including:
(i) Name and registration number
(ii) Address
(iii) Country of incorporation
(iv) Principal place of business
(v) Description of its business
(vi) Number and type of securities to be quoted
(vii) Description of the terms of the securities
(viii) Expected date of admission
(ix) Sponsorship details
(x) Reporting auditor and ongoing auditor.
2.
(a) Declaration by each of the listing applicant's director, executive officer, controlling shareholder, and officer occupying a managerial position and above who is a relative of such director or controlling shareholder, in the form set out in paragraph 8, Part 7 of the Fifth Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018, as amended from time to time.
(b) Resumes and particulars of each of the listing applicant's director, executive officer and controlling shareholder, and if the controlling shareholder is a company or partnership, resumes and particulars of each of its director, executive officer, controlling shareholder and partner. In the case where such entity is listed on a stock exchange and the relevant information relating to each relevant person is publicly available, this requirement is not applicable, but the sponsor must inform the Exchange of any material changes.
3. Details of any other listing application made by the listing applicant to any exchange or market in the last 5 years, and to any exchange or market on which the listing applicant is currently listed.
4. Whether the listing applicant has approached or engaged a sponsor or issue manager to sponsor a listing application in the last 5 years.
5. Details of any conditions that the sponsor intends to require the listing applicant to fulfil after admission.
6. Confirmation that the sponsor holds a proper mandate for introducing and continuing activities on behalf of the listing applicant.
7. Confirmation by the Board of Directors and the sponsor pursuant to Rule 225(1)(f) that, in relation to the appointment of auditors, the listing applicant is in compliance with Rule 712 and Rule 715 or 716.
Part II Very Substantial Acquisition / Reverse Takeover
1. A sponsor must submit to the Exchange a pre-admission notification for very substantial acquisitions or reverse takeovers that includes the following information, where applicable:
2. Summary information on the enlarged group, including:
(a) Any change to the name and registration number
(b) Any change of address
(c) Any change of country of incorporation
(d) Any change of principal place of business
(e) Description of its new business
(f) Number and type of additional securities to be quoted
(g) Description of the terms of the additional securities
(h) Expected date of listing and quotation of additional securities
(i) Any change of sponsorship details
(j) Reporting auditor and ongoing auditor.
3.
(a) For reverse takeovers, declaration by each of the enlarged group's director, executive officer, controlling shareholder, and officer occupying a managerial position and above who is a relative of such director or controlling shareholder, in the form set out in paragraph 8, Part 7 of the Fifth Schedule, Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018, as amended from time to time. For very substantial acquisitions, this requirement applies only to each new relevant person.
(b) For reverse takeovers, resumes and particulars of each of the enlarged group's director, executive officer and controlling shareholder, and if the controlling shareholder is a company or partnership, resumes and particulars of each of its director, executive officer, controlling shareholder and partner. In the case where such entity is listed on a stock exchange and the relevant information relating to each relevant person is publicly available, this requirement is not applicable, but the sponsor must inform the Exchange of any material changes.
4. Details of any other listing application made in respect of the assets/business/company that is being injected into the enlarged group, to any exchange or market in the last 5 years and to any exchange or market on which the assets/business/company is currently listed.
5. Whether the listing applicant has approached or engaged a sponsor or issue manager to sponsor a listing application in the last 5 years.
6. Details of any conditions that the sponsor intends to require the enlarged group to fulfil after re-quotation of the securities.
7. Confirmation that the sponsor holds a proper mandate for introducing and continuing activities on behalf of the enlarged group.
8. Confirmation by the Board of Directors and the sponsor pursuant to Rule 225(1)(f) that, in relation to the appointment of auditors, the listing applicant is in compliance with Rule 712 and Rule 715 or 716.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
Appendix 4B Initial Public Offering Listing Confirmation
Cross-referenced from Rule 406(4)
We __________________________, sponsor of _______________________ (listing applicant) notify the Exchange that the listing applicant may be admitted to Catalist and the following securities quoted:
___________________________ (details of securities)
Part I Confirmation (Lodgement)
Please provide the following statements of confirmation.
1. We confirm that:
(a) We have given written consent to being named as sponsor and issue manager in the preliminary offer document, and a statement of such consent appears in the preliminary offer document.
(b) Each issue manager and underwriter named in the preliminary offer document has given his written consent to being named, and a statement of such consent appears in the preliminary offer document.
(c) Where the preliminary offer document contains a statement purporting to be made by, or based on a statement made by, an expert, the expert has given his written consent to the issue of such statement, and a statement of his consent appears in the preliminary offer document.
(d) The written consents referred to in paragraphs 1(a), (b) and (c) above have been lodged with the Exchange.
(e) The preliminary offer document has been signed in accordance with section 240(4A) of the SFA.
(f) [Deleted]
2. The indicative range of the issue price for the offer is: _____________________
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Part II Confirmation (Registration)
Please provide the following statements of confirmation where applicable.
1. We confirm that:
(a) We have given and not withdrawn our written consent to being named as sponsor and issue manager in the offer document, and a statement that we have given and not withdrawn our consent appears in the offer document.
(b) Each issue manager and underwriter named in the preliminary offer document has given and not withdrawn his written consent to being named, and a statement that he has given and not withdrawn his consent appears in the offer document.
(c) Where the offer document contains a statement purporting to be made by, or based on a statement made by, an expert, the expert has given and not withdrawn his written consent to the issue of such statement, and a statement that he has given and not withdrawn his consent appears in the offer document.
(d) The written consents referred to in paragraphs 1(a), (b) and (c) above have been lodged with the Exchange.
(e) The offer document has been signed in accordance with section 240(4A) of the SFA.
2. We confirm that, to the best of our knowledge and belief, having made reasonable due diligence enquiries and considered all relevant matters under the Rules in relation to this application for listing:
(a) All applicable requirements of the Rules are met (except as waived by the Exchange in writing).
(b) We are satisfied that the listing applicant is suitable for listing on Catalist.
(c) We are satisfied that the profit forecast, if any, has been made by the listing applicant's directors after due and careful enquiry.
(d) The offer document contains all information required by the relevant laws and regulations.
(e) There are no other matters known to us that should be taken into account except ____________ (if none, write nil).
(f) No material information has changed from the preliminary offer document except ___________ (if no change, write nil. If any changes, identify the attachment with the changes marked.).
(g) The listing applicant has all the requisite approvals, and is in compliance with all laws and regulations, that materially affect its business operations.
(h) The listing applicant has established adequate procedures, systems and controls (including accounting and management systems) to meet its obligations under the Rules.
(i) The directors of the listing applicant have received adequate advice and guidance from us (and other appropriate professional advisers) on their legal and regulatory obligations as an issuer on Catalist.
(j) All documents required by the Rules are included with this listing confirmation.
(k) We complied with the due diligence guidelines issued by The Association of Banks in Singapore or _____________ (such other satisfactory and no less strict due diligence guidelines or processes).
(l) We are independent from the listing applicant/issuer and are able to demonstrate it to the Exchange, if required.
(m) We hold a full mandate to undertake the relevant sponsorship activities for the listing applicant for at least three years.
3. In relation to paragraph 2(l) of the above declaration, we disclose the following.
(a) *We, our partners, directors, employees and associates of such partners, directors and employees, either individually or collectively, *have/do not have, or may as a result of the listing or a transaction *have/do not have, any interest1 in any class of securities of the listing applicant above 5% of the total issued securities. Details of such interest (if any) are as follows: ______________________.
(b) Our *partners, directors, employees and associates of such partners, directors and employees involved in providing advice to the listing applicant/issuer *have/do not have a directorship in the listing applicant. Details of such directorship (if any) are as follows: ______________________.
*Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Part III Confirmation (After Allotment)
Please provide the following statements of confirmation where applicable.
1. We confirm that:
(a) The securities to be quoted are eligible for deposit with CDP.
(b) All share certificates have been issued and despatched (if applicable).
(c) A copy of the return of allotment has been duly filed with the Accounting and Corporate Regulatory Authority (ACRA).
(d) Any allocation and allotment of securities pursuant to a placement has been made in compliance with Rule 424.
(f) The distribution (after allotment if applicable) of the applicant's securities is not expected to result in a disorderly market when trading begins.
(g) The number of public shareholders is _____________ and the percentage of issued share capital held in public hands is ________ %.
(h) The following details in respect of moratorium shares are attached to this confirmation:
(i) the name of the registered shareholder (and beneficial shareholder if different);
(ii) the share certificate number and number of shares represented;
(iii) the endorsement on the share certificate; and
2. No further information relevant to the listing application should be advised to the Exchange.
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
1 An interest is a direct or indirect interest and includes options or rights to subscribe for securities.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
Appendix 4C Articles of Association
Cross-referenced from Rule 406(8)
The Articles of Association and other constituent documents of an issuer must contain the provisions set out below. Only in exceptional circumstances will the Exchange grant an exemption from compliance with any of the provisions.
1. Capital
(a) The total number of issued preference shares shall not exceed the total number of issued ordinary shares issued at any time.
(b) The rights attaching to shares of a class other than ordinary shares must be expressed.
(c) Whether the company has power to issue further preference capital ranking equally with, or in priority to preference shares already issued must be expressed.
(d) Preference shareholders must have the same rights as ordinary shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the issuer. Preference shareholders must also have the right to vote at any meeting convened for the purpose of reducing the capital, or winding up, or sanctioning a sale of the undertaking of the issuer, or where the proposition to be submitted to the meeting directly affects their rights and privileges, or when the dividend on the preference shares is in arrear for more than six months.
(e) Subject to any direction to the contrary that may be given by the company in the general meeting or except as permitted under the Exchange's listing rules, all new shares shall, before issue, be offered to such persons who as at the date of the offer are entitled to receive notices from the company of general meetings in proportion, as far as circumstances admit, to the amount of the existing shares to which they are entitled. The offer shall be made by notice specifying the number of shares offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined. After the expiration of the aforesaid time or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares offered, the directors may dispose of those shares in a manner as they think most beneficial to the company. The directors may likewise dispose of any new shares which (by reason of the ratio which the new shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion of the directors, be conveniently offered under this provision.
(f) Subject to the provisions of the Companies Act, if any share certificates shall be defaced, worn-out, destroyed, lost or stolen, it may be renewed on such evidence being produced and a letter of indemnity (if required) being given by the shareholder, transferee, person entitled, purchaser, member company of the Exchange or on behalf of its/their client(s) as the directors of the company shall require, and in the case of defacement or wearing out, on delivery of the old certificate and in any case on payment of such sum not exceeding two dollars as the directors may from time to time require. In the case of destruction, loss or theft, a shareholder or person entitled to whom such renewed certificate is given shall also bear the loss and pay to the company all expenses incidental to the investigations by the company of the evidence of such destruction or loss.
2. Certificate
(a) Every member shall be entitled to receive share certificates in reasonable denominations for his holding and where a charge is made for certificates, such charge shall not exceed two dollars.
3. Forfeiture and Lien
(a) The company's lien on shares and dividends from time to time declared in respect of such shares, shall be restricted to unpaid calls and instalments upon the specific shares in respect of which such monies are due and unpaid , and to such amounts as the company may be called upon by law to pay in respect of the shares of the member or deceased member.
(b) If any shares are forfeited and sold, any residue after the satisfaction of the unpaid calls and accrued interest and expenses, shall be paid to the person whose shares have been forfeited, or his executors, administrators or assignees or as he directs.
4. Transfer and Transmission
(a) The company will accept for registration a transfer in the form approved by the Exchange.
(b) Any fee charged on the transfer of securities shall not exceed two dollars per transfer.
(c) There shall be no restriction on the transfer of fully paid securities except where required by law or by the Rules, Bye-Laws or Listing Rules of the Exchange.
(d) Any articles which entitle a company to refuse to register more than three persons as joint holders of a share must be expressed to exclude the case of executors or trustees of a deceased shareholder.
5. Modification of Rights
(a) The repayment of preference capital other than redeemable preference capital, or any alteration of preference shareholders' rights, may only be made pursuant to a special resolution of the preference shareholders concerned, provided always that where the necessary majority for such a special resolution is not obtained at the meeting, consent in writing if obtained from the holders of three-fourths of the preference shares concerned within two months of the meeting, shall be as valid and effectual as a special resolution carried at the meeting.
6. Borrowing Powers
(a) The scope of the borrowing powers of the board of directors shall be expressed.
7. Meetings
(a) The notices convening meetings shall specify the place, day and hour of the meeting, and shall be given to all shareholders at least fourteen days before the meeting (excluding the date of notice and the date of meeting). Where notices contain special resolutions, they must be given to shareholders at least twenty-one days before the meeting (excluding the date of notice and the date of meeting). Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolutions in respect of such businesses. At least fourteen days' notice of every such meeting shall be given by advertisement in the daily press and in writing to each stock exchange on which the company is listed.
8. Voting and Proxies
(a) A holder of ordinary shares shall be entitled to be present and to vote at any general meeting in respect of any share or shares upon which all calls due to the company have been paid.
(b) In the case of joint holders of shares, any one of such persons may vote, but if more than one of such persons is present at a meeting, the person whose name stands first on the Register of Members shall alone be entitled to vote.
(c) A proxy need not be a member of the company.
(d) An instrument of proxy shall be deemed to confer authority to demand or join in demanding a poll.
(e) A proxy shall be entitled to vote on any matter at any general meeting.
9. Directors
(a) All the directors of the company shall be natural persons.
(b) Where provision is made for the directors to appoint a person as a director either to fill a casual vacancy, or as an addition to the board, any director so appointed shall hold office only until the next annual general meeting of the company, and shall then be eligible for re-election.
(c) Fees payable to non-executive directors shall be by a fixed sum, and not by a commission on or a percentage of profits or turnover. Salaries payable to executive directors may not include a commission on or a percentage of turnover.
(d) Fees payable to directors shall not be increased except pursuant to a resolution passed at a general meeting, where notice of the proposed increase has been given in the notice convening the meeting.
(e) A director shall not vote in regard to any contract or proposed contract or arrangement in which he has directly or indirectly a personal material interest.
(f) The office of a director shall become vacant should he become of unsound mind or bankrupt during his term of office.
(g) A person who is not a retiring director shall be eligible for election to office of director at any general meeting if some member intending to propose him has, at least eleven clear days before the meeting, left at the office of the company a notice in writing duly signed by the nominee, giving his consent to the nomination and signifying his candidature for the office, or the intention of such member to propose him. In the case of a person recommended by the directors for election, nine clear days' notice only shall be necessary. Notice of each and every candidature for election to the board of directors shall be served on the registered holders of shares at least seven days prior to the meeting at which the election is to take place.
(h) Where a managing director or a person holding an equivalent position is appointed for a fixed term, the term shall not exceed five years.
(i) A managing director or a person holding an equivalent position shall be subject to the control of the board.
(j) The continuing directors may act notwithstanding any vacancy in the board, provided that if their number is reduced below the minimum number fixed by or pursuant to the regulations of the company, the continuing directors may, except in an emergency, act only for the purpose of increasing the number of directors to such minimum number, or to summon a general meeting of the company.
(k) A director may appoint a person approved by a majority of his co-directors to act as his alternate, provided that any fee paid by the company to the alternate shall be deducted from that director's remuneration. No director may act as an alternate director of the company. A person may not act as an alternate director for more than one director of the company.
(l) Where two directors form a quorum, the chairman of a meeting at which only such a quorum is present, or at which only two directors are competent to vote on the matter at issue, shall not have a casting vote.
(m) Where a director is disqualified from acting as a director in any jurisdiction for reasons other than on technical grounds, he must immediately resign from the board.
10. Annual General Meeting
(a) An issuer must hold its annual general meeting within four months from the end of its financial year.
11. Winding Up
(a) The basis on which shareholders would participate in a distribution of assets on a winding up shall be expressed.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
Appendix 4D Transfer Confirmation by Sponsor
Cross referenced from Rule 410(2)
We __________________________ , sponsor of _______________________ (SGX Main Board issuer applying for transfer) notify the Exchange that the issuer may be transferred to Catalist and the following securities quoted:
____________________________ (details of securities)
We confirm:
1. Having made reasonable due diligence enquiries and having considered all relevant matters as required by the Rules for sponsors, we are satisfied that the issuer is suitable to be listed on Catalist.
2. The requirements in Rule 410 have been complied with.
3. There are no other matters known to us that should be taken into account except ____________ (if none, write nil).
4. We are not aware of any material information which has yet to be announced.
5. We hold a full mandate to undertake continuing activities for the issuer.
6. The directors of the issuer have been informed of their obligations under the Rules and relevant Singapore laws and regulations.
7. The issuer has all the requisite approvals, and is in compliance with all laws and regulations, that materially affect its business operations.
8. The number of shareholders is _____________ and the percentage of issued share capital held in public hands is ________ %.
9. No further information relevant to the transfer should be advised to the Exchange.
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Appendix 4E Applicant's Listing Agreement
Cross-referenced from Appendix 4F and Rule 410(3)
For *initial public offerings / very substantial acquisitions / reverse takeovers / transfers from SGX Main Board to Catalist:
We, ........................................................................... (listing applicant/enlarged group), in consideration of Singapore Exchange Securities Trading Limited (SGX) admitting us to the Official List of Catalist and quoting our securities, agree to the following.
1. Agreement
We agree:
(a) that the listing and quotation of our securities, or refusal, suspension or removal thereof, is in SGX's absolute discretion. SGX may admit or quote on any conditions it decides. SGX is not obliged to give reasons;
(b) to comply with the Rules and requirements if admitted (as amended from time to time);
(c) that the Rules may be modified or waived by the Exchange in its discretion;
(d) that SGX may enforce any action, disciplinary or otherwise, under the Rules;
(e) that SGX may make public any action taken and the reasons as set out in the Rules;
(f) that SGX may contact any organisation (regulatory or professional) regarding the proposed listing and quotation of our securities, and may give them and receive from them any information or documents considered by SGX or that organisation to be relevant;
(g) to pay all fees when due;
(h) to accept as final, binding & conclusive any decision made by SGX;
(i) to pay all costs required by SGX;
(j) to submit to the non-exclusive jurisdiction of the courts of Singapore; and
(k) that the proper law of this agreement is Singapore law.
2. Warranty
We warrant to SGX that:
(a) there is no reason not disclosed to our sponsor why our securities should not be listed and quoted on Catalist; and
(b) the information and documents provided to our sponsor, or provided to SGX as requested, are complete and accurate.
3. Indemnity
We indemnify SGX and its staff, agents and delegates to the fullest extent permitted by law in respect of any claim, action, other civil liability, or expense arising from or connected with:
(a) anything done or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of their obligations under the law or the Rules;
(b) any breach of the above warranties; or
(c) any breach of our agreement.
Dated:
| ____________________________ Proper execution by applicant (eg. seal) | ____________________________ Signed by ................... (name and position) pursuant to authority granted by resolution of the Board on .................. (date) |
* Delete where not applicable.
Amended on 29 September 201129 September 2011.
Appendix 4F Steps in the Initial Public Offering / Very Substantial Acquisition / Reverse Takeover Process
Cross-referenced from Rules 431 and 1015(5)
The steps in the initial public offering/very substantial acquisition/reverse takeover process and the documents to be lodged with, or submitted by the sponsor to, the Exchange are as follows.
Part I Initial Public Offering
The usual timeline for an initial public offering is indicated in the far right column. In a particular case, the Exchange may change the timeline. Requirements for lodgement of documents are set out in Practice Note 4B.
| Steps | Activity | Usual Timeline |
| Pre-admission | Sponsor submits to the Exchange (Listings Department): 1. The pre-admission notification as described in Appendix 4A. 2. The requisite listing fee. | Registration day minus 29 calendar days |
| Lodgement of preliminary offer document | 1. Sponsor lodges on behalf of the issuer, the preliminary offer document with the Exchange (Catalist Regulation) for posting on the SGX website. The preliminary offer document will be exposed for public comment for a minimum period of 14 calendar days, unless extended by the Exchange. The period cannot be shortened. 2. Sponsor submits Part I of the listing confirmation in Appendix 4B, the undertaking by the issuer not to make an exempt offer (Rule 406(11)) and the required written consents (Rule 406(12)). 3. The sponsor may, on behalf of the issuer, lodge an amendment to the offer document under section 240(9A) of the SFA with the Exchange acting as agent of the Authority. The public comment period may commence again at the Exchange's discretion. | Registration day minus 15 calendar days |
| Registration of offer document | 1. Sponsor submits to the Exchange (Catalist Regulation) Part II of the listing confirmation in Appendix 4B, the required written consents (Rule 406(12)), the undertakings from each of the issuer's directors and executive officers in Appendix 7H and the Applicant's Listing Agreement in Appendix 4E, with requisite attachments. 2. The Exchange issues a registration notice and posts the marked-up and clean copies of the offer document on the SGX website. 3. This must be at least 4 market days before trading begins. 4. If, after registration, a replacement or supplementary offer document is required, the replacement or supplementary offer document must be lodged with the Exchange (Catalist Regulation) and the offer must be kept open for at least 14 days. | Registration day |
| Offer | 1. The applicant invites applications to subscribe for or purchase the securities. 2. The offer must be kept open for at least 2 market days. 3. After the offer closes, the applicant announces the outcome of the offer, and where appropriate, the level of subscription and the basis of allocation and allotment, and the subscription rate reflecting the true level of demand for the offer. In computing the subscription rate, subscriptions by connected persons and the persons mentioned in Rule 428 must be excluded. | Offer period |
| Confirmation of allotment | Sponsor submits to the Exchange (Catalist Regulation): 1. The information in Part III of the listing confirmation in Appendix 4B. 2. A list of the directors and substantial shareholders and their respective shareholdings. | Trading day minus 1 market day |
| Listing | Trading begins | Trading day |
Part II Very Substantial Acquisition/Reverse Takeover
| Steps | Activity |
| Pre-admission | 1. Sponsor submits to the Exchange (Listings Department) the pre-admission notification as described in Appendix 4A at least 14 calendar days before lodgement of the shareholder's circular and requisite listings fee. 2. Sponsor submits to the Exchange (Catalist Regulation) a draft shareholder's circular. |
| Lodgement of shareholder's circular | 1. Sponsor lodges shareholder's circular with the Exchange (Catalist Regulation) for posting on the SGX website at least 14 calendar days before the shareholder's meeting. Sponsor submits Part I of the listing confirmation in Appendix 10A. The shareholder's circular will be exposed for public comment for a minimum period of 14 calendar days, unless extended by the Exchange. The period cannot be shortened. 2. Sponsor submits to the Exchange (Catalist Regulation) Part II of the listing confirmation in Appendix 10A (where applicable), and Appendix 4E, with requisite attachments. 3. If there is a change in the sponsor for the enlarged group, sponsor submits Appendix 2C. |
| Issue of listing and quotation notice | The Exchange issues a listing and quotation notice (where applicable) upon the lodgement of the shareholder's circular. |
| Confirmation of allotment | Sponsor submits to the Exchange (Catalist Regulation) the information in Part III of the listing confirmation in Appendix 10A (where applicable). |
| Listing and quotation | Listing and quotation of the enlarged group (where applicable). |
Amended on 7 October 20157 October 2015 and 7 February 20207 February 2020.
Appendix 7A Corporate Disclosure Policy
Cross-referenced from Rule 703(4)
Part I Introduction
1. This Appendix sets out the Exchange's corporate disclosure policy.
2. Rule 703(4)(a) obligates an issuer to provide timely disclosure of material information in accordance with this policy. The Exchange regards disclosure as fundamentally important to the operation of a fair, orderly and transparent market for the trading of securities.
3. It is the sponsor's responsibility to advise the issuer on timely and adequate disclosure of material information.
Part II Issuers' Obligations Under Rule 703
4. Under Rule 703, an issuer must disclose information:
(a) Necessary to avoid the establishment of a false market in its securities. A false market may exist if information is not made available that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the securities. For this reason, an issuer may be required to clarify or confirm a rumour (see "Clarification or Confirmation of Rumours or Reports" below).
(b) That would be likely to have a material effect on the price or value of securities of that issuer.
5. Material information includes information, known to the issuer, concerning the issuer's property, assets, business, financial condition and prospects; mergers and acquisitions; and dealings with employees, suppliers and customers; material contracts or development projects, whether entered into in the ordinary course of business or otherwise; as well as information concerning a significant change in ownership of the issuer's securities owned by insiders, or a change in effective or voting control of the issuer, and any developments that affect materially the present or potential rights or interests of the issuer's shareholders.
6. The fact that information is generally available is not a reason for failing to disclose under Rule 703. For example, if an issuer releases material information to the media but did not announce it to the market via SGXNET, the issuer is in breach of Rule 703. Rule 702 requires an issuer to make announcements via SGXNET, unless specified otherwise.
7. It is the responsibility of each issuer to disclose material information in its possession as required by the listing rules.
8. Information must not be divulged to any person (outside of the issuer and its advisers) in such a way as to place in a privileged dealing position any person. Information must not be released in such a way that transactions in the issuer's listed securities (whether on market or off market) may be entered into at prices which do not reflect the latest publicly available information.
Some events requiring disclosure under Rule 703
9. Under Rule 703, the following events, while not comprising a complete list of all the situations which may require disclosure, are likely to require immediate disclosure:—
(a) a joint venture, merger or acquisition;
(b) the declaration or omission of dividends or the determination of earnings;
(c) firm evidence of significant improvement or deterioration in near-term earnings prospects;
(d) a subdivision of shares or stock dividends;
(e) the acquisition or loss of a significant contract;
(f) the purchase or sale of a significant asset;
(g) a significant new product or discovery;
(h) the public or private sale of a significant amount of additional securities of the issuer;
(i) a change in effective control or a significant change in management;
(j) a call of securities for redemption;
(k) the provision or receipt of a significant amount of financial assistance;
(l) occurrence of an event of default under debt or other securities or financing or sale agreements;
(m) significant litigation;
(n) a significant change in capital investment plans. Examples include building of factories, increasing plant and machinery, and increasing production lines;
(o) a significant dispute or disputes with sub-contractors, customers or suppliers, or with any parties;
(p) a tender offer for another company's securities;
(q) a valuation of the real assets of the group that has a significant impact on the group's financial position and/or performance. The valuation of real property must be carried out by a property valuer in accordance with the property valuation standards. A copy of the valuation report, or for real property, a copy of the property valuation report, must be made available for inspection at the issuer's registered office during normal business hours for 3 months from the date of the announcement;
(r) if its sponsor will cease or ceases to sponsor it for any reason, stating the reasons and effective date of such cessation;
(s) the appointment of a new sponsor;
(t) involuntary striking-off of the issuer's subsidiaries;
(u) an investigation on a director or an executive officer of the issuer;
(v) loss of a major customer or a significant reduction of business with a major customer; and
(w) major disruption to supply of critical goods or services.
Part III Exception to Rule 703
10. Rule 703 includes two exceptions from the requirement to make immediate disclosure. One allows information not to be disclosed if to do so breaches the law (Rule 703(2)). The other allows an issuer to temporarily refrain from publicly disclosing particular information, provided that the information is of a certain type, a reasonable person would not expect it to be disclosed, and the information is kept confidential (Rule 703(3)).
11. An issuer can rely on the exception under Rule 703(3) while each of the three conditions is satisfied. Should any of the conditions cease to be satisfied, the exception will similarly cease to be available, and the issuer must disclose the information immediately. The three conditions are:
Condition 1: A reasonable person would not expect the information to be disclosed
Condition 1: A reasonable person would not expect the information to be disclosed
(a) A reasonable person would not expect information to be disclosed if such disclosure would prejudice the ability of the issuer to pursue its corporate objective. Also, a reasonable person would not expect the disclosure of an inordinate amount of detail.
(b) If conditions 2 and 3 are satisfied but a reasonable person would expect the information to be disclosed, the exception is not available. In considering if this condition is satisfied, the Exchange will balance the needs of the market and the interests of the issuer while having regard to the principle on which the listing rule is based.
Condition 2: The information is confidential
Generally, information may be regarded as confidential if the issuer has control of the use that can be made of the information. Confidentiality also means that no one in possession of the information is entitled to trade in that issuer's listed securities. In this regard, unusual activity in the issuer's securities may suggest that the information is no longer confidential. If so, this condition is not met. (See also "Confidentiality")
Condition 3: The information is of the type in one of the listed categories.
If the information is not of the type in one of the listed categories, or if it loses that character, then the condition is not satisfied.
Generally, information may be regarded as confidential if the issuer has control of the use that can be made of the information. Confidentiality also means that no one in possession of the information is entitled to trade in that issuer's listed securities. In this regard, unusual activity in the issuer's securities may suggest that the information is no longer confidential. If so, this condition is not met. (See also "Confidentiality")
Condition 3: The information is of the type in one of the listed categories.
If the information is not of the type in one of the listed categories, or if it loses that character, then the condition is not satisfied.
Part IV Examples of the Operation of Rule 703
12. The following examples explain in more detail the operation of Rule 703. They illustrate the general principles only and do not affect the operation of the listing rule.
(a) Example (1): Information concerning an incomplete proposal or negotiation
In the course of a successful negotiation for the acquisition of another company, for example, the only information known to each party at the outset may be the willingness of the other to hold discussions. Shortly thereafter, it may become apparent to the parties that it is likely an agreement can be reached. Finally, agreement in-principle may be reached on specific terms. In such circumstances, an issuer need not issue a public announcement at each stage of the negotiations, describing the current state of constantly changing facts but may await agreement in-principle on specific terms. If, on the other hand, progress in the negotiations should stabilise at some other point, disclosure should then be made if the information is material.
In the course of a successful negotiation for the acquisition of another company, for example, the only information known to each party at the outset may be the willingness of the other to hold discussions. Shortly thereafter, it may become apparent to the parties that it is likely an agreement can be reached. Finally, agreement in-principle may be reached on specific terms. In such circumstances, an issuer need not issue a public announcement at each stage of the negotiations, describing the current state of constantly changing facts but may await agreement in-principle on specific terms. If, on the other hand, progress in the negotiations should stabilise at some other point, disclosure should then be made if the information is material.
(b) Example (2): Information generated for internal management purposes
Disclosure of an issuer's internal estimates or projections of its earnings or of other data relating to its affairs is not necessary. If such estimates or projections are released, they should be prepared carefully, be soundly based and should be realistic. The estimates or projections should be qualified, if necessary, to ensure that they are properly understood. Should subsequent developments indicate that performance will not match earlier estimates or projections, this too should be reported promptly and the variances adequately explained.
Disclosure of an issuer's internal estimates or projections of its earnings or of other data relating to its affairs is not necessary. If such estimates or projections are released, they should be prepared carefully, be soundly based and should be realistic. The estimates or projections should be qualified, if necessary, to ensure that they are properly understood. Should subsequent developments indicate that performance will not match earlier estimates or projections, this too should be reported promptly and the variances adequately explained.
Part V Confidentiality
13. Where an issuer relies on Rule 703(3) to temporarily withhold material information, the strictest confidentiality must be maintained. Access to the information should be restricted, to the extent possible, to the highest possible levels of management and should be disclosed to officers, employees and others only on a need-to-know basis. Distribution of paperwork and other data should be kept to a minimum. The issuer should establish clear protocols with its sponsor about who within the sponsor will receive and advise on company information.
14. It may be appropriate to require each person who gains access to the information to report to the issuer, any transaction which he effects in the issuer's securities.
15. During this period, both the issuer and its sponsor should keep a close watch on the trading activity of the issuer's securities. The sponsor should be prepared to advise the issuer to make an immediate public announcement if necessary, and the issuer should be prepared to make an immediate public announcement if necessary.
Part VI Clarification or Confirmation of Rumours or Reports
16. Public circulation of information, whether by an article published in a newspaper, by a broker's market letter, or by word-of-mouth, either correct or false, which has not been substantiated by the issuer and which is likely to have, or has had, an effect on the price of the issuer's listed securities or would be likely to have a bearing on investment decisions must be clarified or confirmed promptly.
17. If rumours indicate that material information has been leaked, a frank and explicit announcement is required. This is because one of the conditions for withholding information, i.e. confidentiality of the information, is no longer fulfilled. If rumours are in fact false or inaccurate, they should be promptly denied or clarified. A statement to the effect that the issuer knows of no corporate developments that could account for the unusual market activity can have a salutary effect. In addition, a reasonable effort should be made to bring the announcement to the attention of the party that initially distributed the information (in the case of an erroneous newspaper article, for example, by sending a copy of the announcement to the newspaper's financial editor, or in the case of an erroneous market letter, by sending a copy to the broker responsible for the letter). If rumours are correct or there are developments, an immediate statement to the public as to the state of negotiations or corporate plans in the rumoured area must be made. Such statements are essential despite the business inconvenience which may result, even if the matter had yet to be presented to the issuer's board of directors for consideration.
18. In the case of a rumour or report predicting future sales, earnings or other data, no response from the issuer is ordinarily required. However, the issuer must make a prompt announcement so that the market remains properly informed if the rumour or report is materially incorrect and may mislead investors, or is specific enough to suggest that information came from an inside source, or the market moves in a way that appears to be referable to the rumour or report.
Part VII Unusual Trading Activity
19. It is the duty of an issuer to request for the trading halt or suspension if the need arises. In support of the issuer, it is the sponsor's responsibility to monitor trading activity in the issuer's securities and advise the issuer if a trading halt or suspension is warranted.
20. Where unusual trading activity in an issuer's securities occurs without any apparent publicly available information which could account for the activity, it may signify trading by persons who are acting on unannounced material information or on a rumour or report, whether true or false. Unusual market activity may not be traceable either to insider trading 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 the issuer's securities reflects a corresponding change in its business or prospects.
21. Similarly, unusual trading volume, even when not accompanied by a significant change in price, tends to encourage rumours and give rise to excessive speculative trading activity which may be unrelated to actual developments in the issuer's affairs.
22. In such situations, the issuer, in consultation with its sponsor, should undertake a review to seek the causes of the unusual trading activity in its securities and take appropriate steps, including making announcements where necessary. The issuer should consider whether any information about its affairs, which would account for the activity, has recently been publicly disclosed, whether there is any material information that has not been publicly disclosed (in which case, the unusual trading activity may signify that a "leak" has occurred), and whether the issuer is the subject of a rumour or report. The issuer and its sponsor should respond promptly to any enquiries made by the Exchange concerning the unusual trading activity and may be guided by the following:
(a) If the issuer determines that the unusual trading activity results from material information that has been publicly disseminated via SGXNET, generally no further announcement is required. However, if the market activity indicates that such information may have been misinterpreted, it may be helpful, after discussion with the sponsor and the Exchange, to issue an announcement to clarify the matter;
(b) If the unusual trading activity results from the "leak" of material information, the information in question must be announced promptly. If the unusual trading activity results from a false rumour or report, the Exchange's policy on correction of such rumours and reports, (discussed in "Clarification or Confirmation of Rumours or Reports") should be observed; and
(c) If the issuer is unable to determine the cause of the unusual trading activity, the Exchange may suggest that the issuer makes a public announcement to the effect that there have been no undisclosed recent developments affecting the issuer or its affairs which would account for the unusual trading activity.
Part VIII Policy on Thorough Public Dissemination
23. Material information must be disclosed when it arises, even if during trading hours. The Exchange will expect the issuer to request a trading halt to facilitate the dissemination of the material information during trading hours. As a guide, a trading halt requested for dissemination of material information will last at least 30 minutes after the release of the material information, or such other period as the Exchange considers it appropriate. The request for a trading halt, and the request for the lifting of a trading halt, must be announced. There must be at least 15 minutes of dissemination time for an announcement on the request for the lifting of trading halt, before trading resumes. The issuer may request a temporary suspension if it is unable to release the material information by the end of the trading halt. Otherwise, the Exchange will consider whether a temporary suspension in trading of the issuer's securities is necessary to enable the material information to be properly disseminated. As a guide, the temporary suspension may last 30 minutes after the announcement has been released to the Exchange, or such other period as the Exchange considers it appropriate. The request for a suspension in trading, and the request for the resumption of trading from suspension, must be announced. There must be at least 30 minutes of dissemination time for an announcement on the request for the resumption of trading from suspension, before trading resumes.
Refer to Practice Note 13A — Procedures for Trading Halt and Suspension.
Refer to Practice Note 13A — Procedures for Trading Halt and Suspension.
24. Public disclosure of material information must be made by an announcement released to the Exchange via SGXNET. To facilitate the dissemination of information, copies of the announcement may be provided simultaneously to newspapers and newswire services.
25. The Exchange recommends that issuers observe an "open door" policy in dealing with analysts, journalists, stockholders and others. However, under no circumstances should disclosure of material information be made on an individual or selective basis to analysts, stockholders, or other persons unless such information has previously been fully disclosed and disseminated to the public. If material information is inadvertently disclosed at meetings with analysts or others, it must be publicly disseminated as promptly as possible by the means described in this Part.
26. The Exchange recognizes that there may be limited instances where selective disclosure is necessary. One example is the pursuit of the issuer's business or corporate objectives, such as when the issuer is undertaking a major corporate exercise. Another example is due diligence when the issuer is the subject of an acquisition. In these circumstances, selective disclosure may be required to facilitate the exercise. However, such disclosure should be made on a need to know basis and subject to appropriate confidentiality restraints.
Part IX Content and Preparation of Public Announcement
27. The content of a press release or other public announcement is as important as its timing. Each announcement should:
(a) be factual, clear and succinct;
(b) contain sufficient quantitative information to allow investors to evaluate its relative importance to the activities of the issuer;
(c) be balanced and fair. Thus, the announcement should avoid:
(i) omission of important unfavourable facts, or the slighting of such facts (for example by "burying" them at the end of a press release);
(ii) presentation of favourable possibilities as certain, or as more probable than is actually the case;
(iii) presentation of projections without sufficient qualification or without sufficient factual basis;
(iv) negative statements phrased to create a positive implication, for example, "The company cannot now predict whether the development will have a materially favourable effect on its earnings," (implying that the effect will be favourable even if not materially favourable), or "The company expects that the development will not have a materially favourable effect on earnings in the immediate future," (implying that the development will eventually have a materially favourable effect);
(v) use of promotional jargon calculated to excite rather than to inform; and
(vi) in periodic updates on performance, selective presentation of information without sufficient comparability across periods. For example, a company should not publish performance measures that are inconsistent across periods to highlight favourable performance or omit poor performance in selected periods;
(d) avoid over-technical language, and should be expressed to the extent possible in language comprehensible to the layman;
(e) explain the consequences or effects of the information on the issuer's future prospects. If the consequences or effects cannot be assessed, explain why; and
(f) include the statement in Rule 753(2).
28. The following guidelines for the preparation of press releases and other public announcements should help issuers ensure that the content of such announcements meet the principles discussed in paragraph 27:
(a) Every announcement should be prepared or reviewed by (i) an official of the issuer familiar with the matters to be disclosed, and (ii) an official of the issuer familiar with the requirements of the Exchange and any applicable requirements of securities laws. Every announcement should be reviewed by the issuer's sponsor.
(b) Since skill and experience are important to the preparation and editing of accurate, fair and balanced public announcements, the Exchange recommends that a limited group of individuals within the issuer be given this assignment on a continuing basis.
(c) Review of press releases and other public announcements by legal counsel is often desirable or necessary, depending on the importance and complexity of the announcement.
Part X Policy on Insider Trading
29. Issuers and parties who may be regarded as insiders should be fully aware of the provisions in any applicable legislation on insider trading.
30. Persons who come into possession of material information, before its public release, are considered insiders for the purposes of the Exchange's corporate disclosure policies. Such persons include sponsors, substantial shareholders, directors, executive officers and other employees, and frequently also include the issuer's lawyers, accountants, bankers, investment bankers, public relations consultants, advertising agencies, consultants, valuers and other third parties. The associates (as defined in "Definitions and Interpretation") of, and those under the control of, insiders may also be regarded as insiders. Where an issuer is involved in the negotiation of an acquisition or transaction, the other parties to the negotiation may also be regarded as insiders.
31. Issuers should make insiders (and others who have access to material information on the issuer before it is publicly disclosed) aware that trading in the issuer's securities while in possession of undisclosed material information or tipping such information is an offence under Singapore's securities laws and may also give rise to civil liability. Issuers are advised to refer to Rule 1204(19) which provides guidance on the principles and best practices with regard to dealings by the issuer and its officers in the issuer's securities.
32. Issuers should establish, publish and enforce effective procedures applicable to the purchase and sale of the securities of the issuer and listed members of its group by officers, directors, employees and other insiders. The procedures should be designed not only to prevent improper trading, but also to avoid any question of the propriety of insider purchases or sales.
Part XI Role of Market Surveillance
33. An issuer and its sponsor should monitor the trading in the issuer's securities to detect any unusual trading activity. Where such unusual trading activity is observed, issuers should note Part VII above. The Exchange also monitors trading of listed securities. Where there is unusual trading activity in a listed security, and it appears to the Exchange that the unusual trading activity cannot be explained by known factors, the Exchange may require the issuer to make an announcement. The announcement should, inter alia, state whether the issuer and its directors are aware of the reasons for the unusual trading activity and whether there is any material information which has not been publicly disclosed. If the issuer or its directors are aware of any matters concerning the substantial shareholders that may account for the unusual trading activity, they must take this into consideration when responding to any query by the Exchange.
Amended on 29 September 201129 September 2011, 7 February 20207 February 2020, 7 February 20207 February 2020 and 12 February 2021.
Appendix 7C Financial Statements and Dividend Announcement
Cross-referenced from Rule 704(10) and Rule 705
Part I Information Required for Quarterly (Q1, Q2 & Q3), Half-Year and Full Year Announcements
1. In the case of Q1, Q2 and Q3 announcements, issuers may present the following statements in any format provided that the same format is used for each quarter. In the case of half-year and full year announcements, issuers must present the following statements in the form presented in the issuer's most recently audited annual financial statements:
(a)
(i) An income statement and statement of comprehensive income, or a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year.
(ii) The following items (with appropriate breakdowns and explanations), if significant, must either be included in the income statement or in the notes to the income statement for the current financial period reported on and the corresponding period of the immediately preceding financial year:
(A) Investment income
(B) Other income including interest income
(C) Interest on borrowings
(D) Depreciation and amortisation
(E) Allowance for doubtful debts and bad debts written off
(F) Write-off for stock obsolescence
(G) Impairment in value of investments
(H) Foreign exchange gain/loss (where applicable)
(I) Adjustments for under or overprovision of tax in respect of prior years
(J) Profit or loss on sale of investments, properties, and/or plant and equipment
(K) [Deleted]
(L) [Deleted]
(b)
(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
(ii) In relation to the aggregate amount of the group's borrowings and debt securities, specify the following as at the end of the current financial period reported on with comparative figures as at the end of the immediately preceding financial year:
(A) the amount repayable in one year or less, or on demand;
(B) the amount repayable after one year;
(C) whether the amounts are secured or unsecured; and
(D) details of any collaterals.
(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.
(d)
(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.
(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, subdivision, consolidation, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State the number of shares that may be issued on conversion of all the outstanding convertibles, if any, against the total number of issued shares excluding treasury shares and subsidiary holdings of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. State also the number of shares held as treasury shares and the number of subsidiary holdings, if any, and the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.
(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.
(iv) A statement showing all sales, transfers, cancellation and/or use of treasury shares as at the end of the current financial period reported on.
(v) A statement showing all sales, transfers, cancellation and/or use of subsidiary holdings as at the end of the current financial period reported on.
2. Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice.
3. Where the figures have been audited or reviewed, the auditors' report (including any modifications or emphasis of a matter).
3A. Where the latest financial statements are subject to an adverse opinion, qualified opinion or disclaimer of opinion:—
(a) Updates on the efforts taken to resolve each outstanding audit issue.
(b) Confirmation from the Board that the impact of all outstanding audit issues on the financial statements have been adequately disclosed.
This is not required for any audit issue that is a material uncertainty relating to going concern.
4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends:
(a) based on the weighted average number of ordinary shares on issue; and
(b) on a fully diluted basis (detailing any adjustments made to the earnings).
7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:
(a) current financial period reported on; and
(b) immediately preceding financial year.
8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following:
(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and
(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.
9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
11. If a decision regarding dividend has been made:
(a) Whether an interim (final) ordinary dividend has been declared (recommended); and
(b)
(i) Amount per share ......... cents
(ii) Previous corresponding period ...... cents
(c) Whether the dividend is before tax, net of tax or tax exempt. If before tax or net of tax, state the tax rate and the country where the dividend is derived. (If the dividend is not taxable in the hands of shareholders, this must be stated).
(d) The date the dividend is payable.
(e) The date on which Registrable Transfers received by the company (up to 5.00 pm) will be registered before entitlements to the dividend are determined.
12. If no dividend has been declared (recommended), a statement to that effect and the reason(s) for the decision.
13. If the group has obtained a general mandate from shareholders for IPTs, the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect.
14. Negative confirmation pursuant to Rule 705(5). (Not required for announcement on full year results)
15. Confirmation that the issuer has procured undertakings from all its directors and executive officers (in the format set out in Appendix 7H) under Rule 720(1).
Part II Additional Information Required for Full Year Announcement
16. Segmented revenue and results for operating segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year.
17. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the operating segments.
18. A breakdown of sales as follows:
| Latest Financial Year $'000 | Previous Financial Year $'000 | % increase/ (decrease) | |
| Group | Group | Group | |
| (a) Sales reported for first half year | |||
| (b) Operating profit/loss after tax before deducting non-controlling interests reported for first half year | |||
| (c) Sales reported for second half year | |||
| (d) Operating profit/loss after tax before deducting non-controlling interests reported for second half year |
19. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year as follows:—
(a) Ordinary
(b) Preference
(c) Total
20. Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(10) in the format below. If there are no such persons, the issuer must make an appropriate negative statement.
| Name | Age | Family relationship with any director and/or substantial shareholder | Current position and duties, and the year the position was first held | Details of changes in duties and position held, if any, during the year |
Amended on 29 September 201129 September 2011, 7 October 20157 October 2015, 31 March 201731 March 2017, 1 January 20191 January 2019, 7 February 20207 February 2020 and 7 February 20207 February 2020.
Appendix 7D Summary of Reserves and Resources
Cross-referenced from Rule 705(7), 1204(23) and Practice Note 4C
The following information must be provided for each asset of the issuer:
Date of report:
Date of previous report (if applicable):
1. Summary of Mineral Reserves and Resources
Name of Asset/Country/Project:
1 To state reason if this is different from net entitlement to issuer
* To state whether the Mineral Resources are reported additional to, or inclusive of, the Mineral Reserves.
Name of Asset/Country/Project:
| Category | Mineral Type | Gross Attributable to Licence | Net Attributable to Issuer1 | Remarks | |||
| Tonnes (millions) | Grade | Tonnes (millions) | Grade | Change from previous update (%) | |||
| Reserves | |||||||
| Proved | |||||||
| Probable | |||||||
| Total | |||||||
| Resources* | |||||||
| Measured | |||||||
| Indicated | |||||||
| Inferred | |||||||
| Total | |||||||
1 To state reason if this is different from net entitlement to issuer
* To state whether the Mineral Resources are reported additional to, or inclusive of, the Mineral Reserves.
2. Summary of Oil and Gas Reserves and Resources
Name of Asset/Country/Project:
2 Applicable to Resources. "Risk Factor" for Contingent Resources means the estimated chance, or probability, that the volumes will commercially extracted. "Risk Factor" for Prospective Resources, means the chance or probability of discovering hydrocarbons in sufficient quantity for them to be tested to the surface. This, then, is the chance or probability of the Prospective Resources maturing into a Contingent Resource
Name of Asset/Country/Project:
| Category | Gross Attributable to Licence (MMbbl / Bcf) | Net Attributable to Issuer1 | Risk Factors2 | Remarks | |
| (MMbbl / Bcf) | Change from previous update (%) | ||||
| Reserves | |||||
| Oil Reserves | |||||
| 1P | |||||
| 2P | |||||
| 3P | |||||
| Natural Gas Reserves | |||||
| 1P | |||||
| 2P | |||||
| 3P | |||||
| Natural Gas Liquids Reserves | |||||
| 1P | |||||
| 2P | |||||
| 3P | |||||
| Contingent Resources | |||||
| Oil | |||||
| 1C | |||||
| 2C | |||||
| 3C | |||||
| Natural Gas | |||||
| 1C | |||||
| 2C | |||||
| 3C | |||||
| Natural Gas Liquids | |||||
| 1C | |||||
| 2C | |||||
| 3C | |||||
| Prospective Resources | |||||
| Oil | |||||
| Low Estimate | |||||
| Best Estimate | |||||
| High Estimate | |||||
| Natural Gas | |||||
| Low Estimate | |||||
| Best Estimate | |||||
| High Estimate | |||||
2 Applicable to Resources. "Risk Factor" for Contingent Resources means the estimated chance, or probability, that the volumes will commercially extracted. "Risk Factor" for Prospective Resources, means the chance or probability of discovering hydrocarbons in sufficient quantity for them to be tested to the surface. This, then, is the chance or probability of the Prospective Resources maturing into a Contingent Resource
1P: Proved
2P: Proved + Probable
3P: Proved + Probable + Possible
MMbbl: Millions of barrels
Bcf : Billions of cubic feet
Name of Qualified Person :
Date :
Professional Society Affiliation / Membership:
Added on 1 February 20111 February 2011 and amended on 29 September 201129 September 2011, 27 September 201327 September 2013 and 23 August 201823 August 2018.
Appendix 7E Minimum Terms of Sponsorship
Cross-referenced from Rule 748(1)
An issuer's written contract with a sponsor must include terms to the following effect. The contract may contain any other terms the parties wish to include, provided they do not contradict these terms.
1. Acknowledgement that the terms of sponsorship are intended to enable the sponsor and the issuer to comply fully with the Rules.
2. To meet the issuer's obligations under the Rules, the issuer gives the sponsor authority to:
(a) peruse all documents or records of the issuer and for this purpose have access to the issuer's premises and other places where its records are kept;
(b) review all documents to be released by the issuer to shareholders or the market;
(c) make all necessary inquiries with the issuer's directors, employees, or auditors;
(d) contact the Exchange on behalf of the issuer;
(e) bind the issuer in dealings with the Exchange;
(f) take external professional advice in relation to any matter relevant to the sponsorship;
(g) include the sponsor's details on any announcements or any documents to be sent to shareholders; and
(h) in the case of a conflict for the sponsor, take directions from the Exchange.
3. The sponsorship is exclusive.
4. The sponsorship will not be terminated without notice:
(a) by the issuer of at least 1 month (unless otherwise agreed by the Exchange); and
(b) by the sponsor of at least 3 months (unless otherwise agreed by the Exchange).
5. The issuer will take all steps, execute all documents, pay all fees, liaise with the sponsor, and do (or procure to be done) all things necessary to comply with the Rules.
6. The sponsor will be available to advise the issuer as necessary in respect of the issuer's compliance with the Rules.
7. The issuer must consult the sponsor as necessary in respect of the issuer's compliance with the Rules and give due consideration to such advice.
8. Acknowledgement that the sponsor owes duties to the Exchange that it may discharge without liability to the issuer.
9. The sponsor will not take any action or do anything that might result in a breach of a law or the Rules.
10. Any term of the sponsorship that contradicts the requirements of the Rules (including this Appendix) is void and of no effect.
Appendix 7F Announcement of Appointment
Cross referenced from Rule 406(3)(d) and Rule 704(6)
Date of Appointment
Date of last re-appointment (if applicable)
Name of person
Age
Country of principal residence
The Board's comments on this appointment (including rationale, selection criteria, board diversity considerations, and the search and nomination process).
Whether appointment is executive, and if so, the area of responsibility
Job Title (e.g. Lead ID, AC Chairman, AC Member etc.)
Professional qualifications
Working experience and occupation(s) during the past 10 years
Shareholding interest in the listed issuer and its subsidiaries
Any relationship (including immediate family relationships) with any existing director, existing executive officer, the issuer and/or substantial shareholder of the listed issuer or of any of its principal subsidiaries
Conflict of interest (including any competing business)
Undertaking (in the format set out in Appendix 7H) under Rule 720(1) has been submitted to the listed issuer Yes No
Other Principal Commitments* Including Directorships#
* "Principal Commitments" has the same meaning as defined in the Code.
# These fields are not applicable for announcements of appointments pursuant to Listing Rule 704(8)
Past (for the last 5 years)
Present
Information required
Disclose the following matters concerning an appointment of director, chief executive officer, chief financial officer, chief operating officer, general manager or other officer of equivalent rank. If the answer to any question is "yes", full details must be given.
| (a) Whether at any time during the last 10 years, an application or a petition under any bankruptcy law of any jurisdiction was filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within 2 years from the date he ceased to be a partner? | Yes | No | |
| (b) Whether at any time during the last 10 years, an application or a petition under any law of any jurisdiction was filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within 2 years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency? | Yes | No | |
| (c) Whether there is any unsatisfied judgment against him? | Yes | No | |
| (d) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose? | Yes | No | |
| (e) Whether he has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach? | Yes | No | |
| (f) Whether at any time during the last 10 years, judgment has been entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or he has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part? | Yes | No | |
| (g) Whether he has ever been convicted in Singapore or elsewhere of any offence in connection with the formation or management of any entity or business trust? | Yes | No | |
| (h) Whether he has ever been disqualified from acting as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust? | Yes | No | |
| (i) Whether he has ever been the subject of any order, judgment or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity? | Yes | No | |
| (j) Whether he has ever, to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of the affairs of :— | |||
| (i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or | Yes | No | |
| (ii) any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or | Yes | No | |
| (iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or | Yes | No | |
| (iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, | Yes | No | |
| in connection with any matter occurring or arising during that period when he was so concerned with the entity or business trust? | |||
| (k) Whether he has been the subject of any current or past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Monetary Authority of Singapore or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere? | Yes | No | |
Information required
Disclosure applicable to the appointment of Director only.
| Any prior experience as a director of an issuer listed on the Exchange? | Yes | No |
If yes, please provide details of prior experience.
If no, please state if the director has attended or will be attending training on the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange.
Please provide details of relevant experience and the nominating committee's reasons for not requiring the director to undergo training as prescribed by the Exchange (if applicable).
Added on 29 September 201129 September 2011 and amended on 7 October 20157 October 2015, 1 January 20191 January 2019 and 1 January 2022.
Appendix 7G Announcement of Cessation
Cross-referenced from Rule 704(6)
| Name of person | ||
| Age | ||
| Is Effective Date of Cessation known? | Yes | No |
| If yes, please provide the date. | ||
| If no, please advise when the date will be announced. | ||
| Detailed Reason(s) for cessation | ||
| Are there any unresolved differences in opinion on material matters between the person and the board of directors including matters which would have a material impact on the group or its financial reporting? | ||
| If yes, please elaborate. | ||
| Is there any matter in relation to the cessation that needs to be brought to the attention of the shareholders of the listed issuer? | Yes | No |
| If yes, please elaborate. | ||
| Any other relevant information to be provided to shareholders of the listed issuer? | Yes | No |
| If yes, please elaborate. | ||
| Date of appointment to current position | ||
| Job Title (e.g. Lead ID, AC Chairman, AC Member etc.) | ||
| Role and responsibilities | ||
| Does the AC have a minimum of 3 members (taking into account this cessation)? | Yes | No |
| Number of Independent Directors currently resident in Singapore (taking into account this cessation). | ||
| Do Independent Directors make up at least one-third of the board (taking into account this cessation)? | Yes | No |
| Number of cessations of appointments specified in Listing Rule 704(6) over the past 12 months | ||
| Shareholding interest in the listed issuer and its subsidiaries | ||
| Familial relationship with any director and/or substantial shareholder of the listed issuer or of any of its principal subsidiaries | ||
| Other Directorships Past (for the last 5 years) Present |
Added on 29 September 201129 September 2011 and amended by 1 January 20221 January 2022.
Appendix 7H Form of Undertaking with Regard to Directors or Executive Officers
Cross-referenced from Rule 720(1) and Appendix 7F
To: Singapore Exchange Securities Trading Limited
c/o__________(Insert the name of the Issuer)
In consideration of the listing and quotation of the securities of__________ (insert the name of the Issuer) (the "Issuer") on the Official List of the SGX Catalist:—
(a) In the exercise of my powers and duties as a director or executive officer of__________
(Insert the name of the Issuer) I, the undersigned, shall:—
(Insert the name of the Issuer) I, the undersigned, shall:—
(i) use my best endeavours to comply with the requirements of Singapore Exchange Securities Trading Limited (the "Exchange") pursuant to or in connection with the SGX-ST Listing Manual from time to time in force; and
(ii) use my best endeavours to procure that the Issuer shall so comply;
(b)
[] I hereby irrevocably appoint the Issuer as my agent, for so long as I remain a director of the issuer or executive officer of the Issuer, for receiving on my behalf any correspondence from and/or service of notices and other documents by the Exchange.
[] Any correspondence from and/or service of notices and other documents by the Exchange may be sent to my correspondence address set out below. In the event of any change to my correspondence address, I undertake to promptly inform the Issuer and update the correspondence address set out below.
Correspondence Address: _____________________
*Please tick accordingly.
Correspondence Address: _____________________
*Please tick accordingly.
(c) I understand the possible consequences of giving to the Exchange information including those referred to in this Form which is false or misleading pursuant to section 330 of the Securities and Futures Act, Chapter 289 of Singapore; and
(d) I undertake to the Exchange in the terms set out in this Form.
Signature:__________________
Name of director/executive officer:_____________________[full name (including non-English characters as reflected in identification documents)]
Nationality:_____________________
Singapore NRIC Number:_____________________
In case of a non-Singapore NRIC cardholder, state the passport number or any identification number and name of issuing authority:
_____________________
Date:_____________________
Note:
If you have any queries you should consult the Exchange or your professional adviser immediately.
Added on 7 October 20157 October 2015 and amended on 30 April 201630 April 2016.
Appendix 8A Disclosure Requirements for Rights Issues or Bought Deals
Cross-referenced from Rule 814
1. Apart from providing the information prescribed by the law, an issuer that is required to comply with the offer information statement requirements in Rule 865, must also provide the information set out in paragraphs 3(b) and, if applicable, (c) below.
2. An issuer that is not required to comply with the offer information statement requirements is required to provide the same disclosures in its offering circular as an issuer that is required to comply with the offer information statement requirements. The issuer is also required to provide the information set out in paragraph (3)(a), (b), (d) and, if applicable, (c) below in its offering circular.
3. The following information must be included in the offer information statement or offering circular, where applicable, OR announced separately before trading of nil-paid rights commences:
(a) On the cover page of the offering circular:
(i) The statements required in Rule 865(2) in respect of an offer information statement.
(ii) A statement that the issuer intends to list the securities which are the subject of the rights issue or bought deal and that acceptance of applications will be conditional upon issue of the securities and SGX-ST's listing and quotation notice.
(iii) A statement that a listing and quotation notice has been obtained from SGX-ST for listing of new securities arising from the rights issue or bought deal, which will commence after all securities certificates have been issued and the allotment letter from the CDP has been dispatched.
(b) Working Capital
A review of the working capital for the last three financial years and the latest half year, if applicable.
A review of the working capital for the last three financial years and the latest half year, if applicable.
(c) Convertible Securities
(i) Where the rights issue or bought deal involves an issue of convertible securities, such as company warrants or convertible debt, the information in Rule 832.
(ii) Where the rights issue or bought deal is underwritten and the exercise or conversion price is based on a price-fixing formula, to state that the exercise or conversion price must be fixed and announced before trading of nil-paid rights commences.
(d) Responsibility Statements
A statement by the sponsor and each financial adviser in the form set out in Practice Note 12A.
A statement by the sponsor and each financial adviser in the form set out in Practice Note 12A.
Amended on 29 September 201129 September 2011.
Appendix 8B Confirmation for Corporate Actions / Additional Listing
Cross-referenced from Rule 864(1)
We __________________________ , sponsor of _______________________ (issuer) notify the Exchange that the issuer *will be undertaking the following corporate action / has the following securities for additional listing:
*For corporate action:
__________________________ (details of corporate action)
*For additional listing:
__________________________ (details of securities)
The issue is a result of __________________________ (insert details)
Part I Confirmation for Corporate Actions / Additional Listing
1. We, ____________________, sponsor of _____________________ (issuer), confirm that, to the best of our knowledge and belief, having made reasonable due diligence enquiries and considered all relevant matters under the Rules in relation to this *circular/additional listing application:
(a) All applicable requirements of the Rules for issuers and sponsors are met (except as waived by the Exchange in writing).
(b) All documents required by the Rules are included with this confirmation.
(c) Where applicable, we complied with the due diligence guidelines issued by The Association of Banks in Singapore or _____________ (such other satisfactory and no less strict due diligence guidelines or processes).
2. We confirm that:
(a) We have given written consent to being named as sponsor in the offer information statement, and a statement of such consent appears in the offer information statement. Where we act as issue manager to the offer of securities, we have given written consent to being named as issue manager in the offer information statement.
(b) Each issue manager and underwriter named in the offer information statement has given his written consent to being named, and a statement of such consent appears in the offer information statement.
(c) Where the offer information statement contains a statement purporting to be made by, or based on a statement made by, an expert, the expert has given his written consent to the issue of such statement, and a statement of his consent appears in the offer information statement.
(d) The written consents referred to in paragraphs 2(a), (b) and (c) above have been lodged with the Exchange.
(e) The offer information statement has been signed in accordance with Regulation 38 of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
3. With regards to an additional listing of securities:
(a) We are satisfied that the securities are suitable for additional listing.
(b) That in our opinion, the issue of securities does not result in a change of control of the type under Rule 1015, and the basis for such opinion is __________________________ .
4. The corporate action/additional listing circular contains all information:
(a) Required by the relevant laws and regulations.
(b) Necessary to allow shareholders to make a properly informed decision.
5. This additional listing confirmation is accompanied by:
(a) The listing fee
(b) The information required as follows:
• For exercise of company warrants/ convertible preference shares — Appendix 8C
• For convertible loan stocks/ bonds — Appendix 8C
• For options exercised under an employee share options scheme — Appendix 8C
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Part II Confirmation for Additional Listing (After Allotment)
Please provide the following statements of confirmation where applicable.
We confirm that:
1. The distribution of the applicant's securities after allotment of the additional securities is not expected to result in a disorderly market when trading begins.
2. The additional securities to be quoted are eligible for deposit with CDP.
3. All share certificates have been issued and despatched (if applicable).
4. A copy of the return of allotment has been duly filed with the Accounting and Corporate Regulatory Authority (ACRA).
5. The new shares *do/do not rank pari passu in all respects with the existing shares of the Company.
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Amended on 7 February 20207 February 2020.
Appendix 8C Notification for Listing of Securities Arising from Exercise of Company Warrants / Convertible Preference Shares / Convertible Loan Stocks/Bonds / Options Exercised Under an Employees' Share Option Scheme*
Cross-referenced from Rule 864(2)
Name of Issuer: __________________________________________________________
Notification for listing of _______________________________________________ additional securities of $ ___________ each fully paid arising from the exercise of ______________ Company Warrants / Convertible Preference Shares / Convertible Loan Stocks / Bonds / options exercised under the Employees' Share Option Scheme (the "Scheme")*.
1. State how the additional securities rank with existing securities.
(If they do not rank pari passu, confirm that the new certificates have been endorsed accordingly, and provide a specimen copy of the endorsed certificate to the Exchange)
(If they do not rank pari passu, confirm that the new certificates have been endorsed accordingly, and provide a specimen copy of the endorsed certificate to the Exchange)
2. In respect of each class of securities, provide the following details:
Class of security : ______________________
Class of security : ______________________
3. **We confirm that the:
(a) Company Warrants / Convertible Preference Shares* were exercised in compliance with the terms of the Deed Poll dated _____________ ; or
(b) Convertible Loan Stocks / Bonds* were converted in compliance with the terms of the Trust Deed dated _____________ ; or
(c) Attached list of options were granted and exercised in compliance with the terms of the Scheme approved by shareholders at the Extraordinary General Meeting held on _____________ .
(d) Listing and Quotation Notice in respect of the securities has been issued by the Exchange.
Enclosures:
(a) A copy of the Return of Allotment (Form 24) (if any) filed with the ACRA.
(b) Confirmation of despatch of Share/Stock Certificates.
(c) Cheque for any additional listing fee, if applicable.
(d) Listing and Quotation Notice.
* Delete where not applicable.
** Complete as applicable.
| Dated: ________________ | |
| Signed on behalf of issuer: | ________________________________ |
| (Name and designation of person signing) | |
| Dated: ________________ | |
| Signed on behalf of issuer: | ________________________________ |
| (Name and designation of person signing) |
Appendix 8D Daily Share Buy-Back Notice
Cross-referenced from Rule 871
Name of Overseas Exchange if Company has Dual Listing: ___________________
(1) Share Buy-Back Authority
Maximum number of shares authorised for purchase
Maximum number of shares authorised for purchase
(2) Details of Purchases Made
(a) Purchases made by way of market acquisition
| Singapore Exchange | Overseas Exchange | ||
| 1. | Date of Purchases | ||
| 2. | (a) Total number of shares purchased (b) Number of shares cancelled (c) Number of shares held as treasury shares | ||
| 3. | (a) Price paid per share or (b) • Highest price per share • Lowest price per share (specify currency) | ||
| 4. | Total consideration (including stamp duties, clearing charges, etc) paid or payable for the shares |
(b) Purchase made by way of off-market acquisition on equal access scheme
| Singapore Exchange | Overseas Exchange | ||
| 1. | Date of Purchases | ||
| 2. | (a) Total number of shares purchased or agreed to be purchased (b) Number of shares cancelled (c) Number of shares held as treasury shares | ||
| 3. | Price paid or payable per share (specify currency) | ||
| 4. | Total consideration (including stamp duties, clearing charges, etc) paid or payable for the shares |
(3) Cumulative Purchases
| By way of market acquisition | By way of off-market acquisition on equal access scheme | Total | ||||
| Number | %* | Number | % | Number | % | |
| Cumulative number of shares purchased to date^ | ||||||
(4)
| Number of issued shares excluding treasury shares and subsidiary holdings after purchase | |
| Number of treasury shares held after purchase | |
| Number of subsidiary holdings after purchase |
* Percentage of company's total number of issued shares excluding treasury shares and subsidiary holdings as at the date of the share buy-back resolution.
^ From the date on which the share buy-back mandate is obtained.
Amended on 31 March 201731 March 2017.
Appendix 8E Notification For Listing And Quotation Of Securities To Be Issued Pursuant To A Scrip Dividend Scheme
Cross-referenced from Part IX of Chapter 8
We __________________________, sponsor of _______________________ (issuer) notify the Exchange for listing of __________________ additional securities arising from shares issued in respect of dividend announced on _________________________________
Ranking of shares: ____________________________________________________________
(if they do not rank pari passu, confirm that the new certificates have been endorsed accordingly, and provide a specimen copy of the endorsed certificate to the Exchange)
Issue Price: __________________________________________________________________
The shares are issued pursuant to (tick one as appropriate):—
Specific shareholder approval obtained for the adoption of the Scrip Dividend Scheme on [Date of general meeting]; OR
Specific annual shareholder approval obtained for the issue of shares pursuant to the Scrip Dividend Scheme on [Date of general meeting] under Section 161 of the Act; OR
Shareholder approval obtained for the share issue mandate obtained pursuant to Listing Rule 806 on [Date of general meeting]. Please include the following:
| (a) No. of shares at the time of mandate obtained | |
| (b) [non-pro rata limit applicable under Rule 806] of (a) | |
| (c) Less: No. of shares previously issued under the mandate | |
| (d) Less: No. of shares to be issued for this dividend declared | |
| (e) No. of shares available under the mandate (b) – [(c)+(d)] |
We, ____________________, sponsor of _____________________ (issuer), confirm that, to the best of our knowledge and belief, having made reasonable due diligence enquiries and considered all relevant matters under the Rules in relation to this additional listing application:
(a) The Scrip Dividend Scheme is in force; and
(b) All applicable requirements of the Rules for issuers and sponsors are met (except as waived by the Exchange in writing).
Enclosures:—
(1) A copy of the Return of Allotment (if any) filed with the relevant authority for the issue of the shares;
(2) Confirmation of despatch of Share / Stock Certificates; and
(3) Cheque for additional listing fee;
Note: —
(a) Form must be submitted to CDP by 12 noon, 2 market days before listing date
Dated: _________________
Signed on behalf of sponsor: ____________________________
(Name and designation of person signing)
Added on 29 September 201129 September 2011 and amended on 7 February 20207 February 2020.
Appendix 10A Reverse Takeover / Very Substantial Acquisition Listing Confirmation
Cross-referenced from Rule 1015(6)
We __________________________ , sponsor of _______________________ (issuer) notify the Exchange that the enlarged group is suitable for continued listing and the following additional securities will be quoted:
____________________________ (details of securities)
Part I Confirmation (Lodgement)
1. We confirm that, to the best of our knowledge and belief, having made reasonable due diligence enquiries and considered all relevant matters under the Rules in relation to this application for listing:
(a) All applicable requirements of the Rules are met (except as waived by the Exchange in writing).
(b) We are satisfied that the enlarged group is suitable for listing on Catalist.
(c) The *very substantial acquisition/reverse takeover circular contains all information required by the relevant laws and regulations.
(d) The *very substantial acquisition/reverse takeover circular contains all information necessary to allow shareholders to make a properly informed decision.
(e) There are no other matters known to us that should be taken into account except ____________ (if none, write nil).
(f) No material information has changed from the *very substantial acquisition/reverse takeover circular except ___________ (if no change, write nil. If any changes, identify the attachment with the changes marked.).
(g) The issuer has all the requisite approvals, and is in compliance with all laws and regulations, that materially affect its business operations.
(h) The issuer has established adequate procedures, systems and controls (including accounting and management systems) to meet its obligations under the Rules.
(i) The directors of the issuer have received adequate advice and guidance from us (and other appropriate professional advisers) on their legal and regulatory obligations as an issuer on Catalist.
(j) All documents required by the Rules are included with this listing confirmation.
(k) We complied with the due diligence guidelines issued by The Association of Banks in Singapore or _____________ (such other satisfactory and no less strict due diligence guidelines or processes).
(l) We are independent from the issuer and are able to demonstrate it to the Exchange, if required.
(m) We hold a full mandate to undertake the relevant sponsorship activities for the issuer for at least three years.
2. In relation to paragraph 1(l) of the above declaration, we disclose the following.
(a) *We, our partners, directors, employees and associates of such partners, directors and employees, either individually or collectively, *have/do not have, or may as a result of the listing or a transaction *have/do not have, any interest^ in any class of securities of the listing applicant/issuer/enlarged group above 5% of the total issued securities. Details of such interest (if any) are as follows: _____________.
^ An interest is a direct or indirect interest and includes options or rights to subscribe for securities.
^ An interest is a direct or indirect interest and includes options or rights to subscribe for securities.
(b) Our *partners, directors, employees and associates of such partners, directors and employees involved in providing advice to the listing applicant/issuer *have/do not have a directorship in the listing applicant/issuer/enlarged group. Details of such directorship (if any) are as follows: _________________.
For additional listing of securities:
3. The indicative range of the issue price for the offer is: __________________________.
4. We confirm that:
(a) We have given written consent to being named as sponsor in the offer information statement, and a statement of such consent appears in the offer information statement. Where we act as issue manager to the offer of securities, we have given written consent to being named as issue manager in the offer information statement.
(b) Each issue manager and underwriter named in the offer information statement has given his written consent to being named, and a statement of such consent appears in the offer information statement.
(c) Where the offer information statement contains a statement purporting to be made by, or based on a statement made by, an expert, the expert has given his written consent to the issue of such statement, and a statement of his consent appears in the offer information statement.
(d) The written consents referred to in paragraphs 4(a), (b) and (c) above have been lodged with the Exchange.
(e) The offer information statement has been signed in accordance with Regulation 38 of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
(f) We are satisfied that the securities are suitable for additional listing.
5. This additional listing confirmation is accompanied by:
(a) The listing fee
(b) The information required as follows:
• For exercise of company warrants/ convertible preference shares — Appendix 8C
• For convertible loan stocks/ bonds — Appendix 8C
• For options exercised under an employee share options scheme — Appendix 8C
* Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Part II Confirmation for Additional Listing (After Allotment)
Please provide the following statements of confirmation where applicable.
1. We confirm that:
(a) The distribution of the applicant's securities after allotment of the additional securities is not expected to result in a disorderly market when trading begins.
(b) The additional securities to be quoted are eligible for deposit with CDP.
(c) All share certificates have been issued and despatched (if applicable).
(d) A copy of the return of allotment has been duly filed with the Accounting and Corporate Regulatory Authority (ACRA).
(e) The new shares *do/do not rank pari passu in all respects with the existing shares of the Company.
(f) The number of shareholders is _____________ and the percentage of issued share capital held in public hands is ________ % (if applicable).
(h) The following details in respect of moratorium shares are attached to this confirmation:
(iv) the name of the registered shareholder (and beneficial shareholder if different);
(v) the share certificate number and number of shares represented;
(vi) the endorsement on the share certificate.
*Delete where not applicable.
| Dated: _________________ | |
| Signed on behalf of sponsor: | __________________________________ |
| (Name and designation of person signing) |
Amended on 10 August 201210 August 2012 and 7 February 20207 February 2020.
Appendix 14A Existing Issuer's Undertaking
Cross-referenced from Rule 1403(3)
We, ........................................................................... (existing issuer), intend to comply with the Catalist Rules.
1. Agreement
We agree:
(a) That the listing and quotation of our securities, or refusal, suspension or removal thereof, is in the absolute discretion of the Singapore Exchange Securities Trading Limited (SGX). SGX may admit or quote on any conditions it decides. SGX is not obliged to give reasons.
(b) To comply with the Rules if admitted (as amended from time to time).
(c) That the Rules may be modified or waived by SGX in its discretion.
(d) That SGX may enforce any action, disciplinary or otherwise, under the Rules.
(e) That SGX may make public any action taken and the reasons as set out in the Rules.
(f) That SGX may contact any organisation (regulatory or professional) regarding the proposed listing and quotation of our securities, and may give them and receive from them any information or documents considered by SGX or that organisation to be relevant.
(g) To pay all fees when due.
(h) To accept as final, binding & conclusive any decision made by SGX.
(i) To pay all costs required by SGX.
(j) To submit to the non-exclusive jurisdiction of the courts of Singapore.
(k) That the proper law of this agreement is Singapore law.
2. Warranty
We warrant to SGX that:
(a) There is no reason not disclosed to our sponsor why our securities should not be listed and quoted on Catalist.
(b) The information and documents provided to our sponsor, or provided to SGX as requested, are complete and accurate.
3. Indemnity
We indemnify SGX and its staff, agents and delegates to the fullest extent permitted by law in respect of any claim, action, other civil liability, or expense arising from or connected with:
(a) Anything done or omitted to be done with reasonable care and in good faith in the course of, or in connection with, the discharge or purported discharge of their obligations under the law or the Rules.
(b) Any breach of the above warranties.
(c) Any breach of our agreement.
Dated:
| ____________________________ Proper execution by applicant (eg, seal)* | ____________________________ Signed by ................... (name and position) pursuant to authority granted by resolution of the Board on .................. (date) * |
* Delete where not applicable.
Practice Note 2A Eligibility Criteria for Sponsors
1. Introduction
(a) This Practice Note sets out the Exchange's expectations in relation to some of the eligibility criteria for becoming and remaining a sponsor.
2. Minimum Capital (Rules 204(1) and 205(1))
(a) A full sponsor must maintain a minimum base capital of S$500,000 and a continuing sponsor must maintain a minimum base capital of S$250,000. The Exchange will calculate minimum base capital in a similar way to that applicable for a capital market services licence.
3. Physical Office (Rules 204(2) and 205(2))
(a) As part of operating out of a physical office in Singapore, a sponsor should have at least 2 registered professionals based in Singapore.
4. Fit and Proper Criteria(Rules 204(3) and 205(3))
(a) The Exchange will assess whether an applicant's substantial shareholders, directors and officers are fit and proper, using the guidelines applicable to capital market services licence holders. In general, the substantial shareholders, directors and officers must demonstrate the following:
(i) honesty, integrity and reputation;
(ii) competence and capability; and
(iii) financial soundness.
(b) When assessing honesty, integrity and reputation, the Exchange will take into account whether the substantial shareholders, directors and officers have any links with money laundering or terrorist financing activities.
5. Experience (Rules 204(4) and 205(4))
(a) For an applicant intending to undertake introducing activities, the Exchange would normally regard relevant experience as having managed at least 3 initial public offerings or reverse takeovers in the last 2 years on the Exchange or an exchange from an acceptable jurisdiction (i.e. within a market of comparable regulatory standards to Singapore).
(b) For an applicant intending to undertake continuing activities, the Exchange would normally regard relevant experience as having advised on corporate finance transactions in the last 2 years on the Exchange or an exchange from an acceptable jurisdiction (i.e. within a market of comparable regulatory standards to Singapore). Relevant transactions include acquisitions and disposals, rights/bonus issues, placements of securities, and takeovers.
(c) An applicant relying on overseas experience must provide documentary proof of the work done on overseas exchanges and, where available, any formal communication indicating the quality of work. The Exchange may contact the overseas exchange(s) to verify the information.
6. Reputation and Work Record (Rules 204(5), 204(6), 205(5) and 205(6))
(a) The Exchange will take into consideration any previous breaches by the applicant, its directors or key officers, of any relevant rule or law, and past disciplinary action by any regulatory authority. The Exchange will also take into account whether the applicant has been denied of any membership or licence in other jurisdictions.
(b) The Exchange will normally not accept an applicant if complaints, warning letters, fines, private or public censures or reprimands, or other disciplinary action by any regulatory authority has occurred in the last 2 years. The Exchange may require proof that an applicant has rectified any problems or weaknesses if they have been subject to disciplinary actions more than 2 years ago.
(c) The Exchange will consider the quality of the applicant's past submissions, including initial public offering/reverse takeover applications rejected in the last 5 years.
(d) The applicant should be financially sound and the Exchange will take into account whether the applicant or any member of its group is under receivership, judicial management, liquidation or experiencing other financial difficulties.
7. Sufficient Skills and Resources (204(7), 205(7) and 224(3)(a))
(a) For a sponsor to ensure that it has sufficient skills and resources as required in Rules 204 and 205, it must engage enough corporate finance, compliance and other employees to support its duties and responsibilities so that each employee has enough time to properly consider the position in respect of each of the sponsored entities.
(b) Every employee performing continuing sponsorship work must be supervised by a registered professional. The employee involved must have appropriate competency to be considered suitable.
(c) In connection with continuing activities, the ratio of sponsored issuers to suitable employees performing Catalist continuing sponsorship work should generally not exceed 8:1. This means that each employee can only be responsible for monitoring a maximum of 8 issuers at any one time.
(d) Even if the ratio is maintained, the sponsor should still assess whether this provides it with sufficient resources. The sponsor must consider the number and type of issuers it sponsors, the workload in its organisation (such as how many initial public offerings/reverse takeovers are being undertaken at one time), the work ethic and compliance culture of the organisation, the work ethic and compliance culture of the issuers it is sponsoring, the internal management and supervision arrangements in the organisation, and any other factors that might influence its ability to fulfil its obligations.
Amended on 7 February 20207 February 2020.
Practice Note 2B Guidelines for Preparing a Listing Applicant for Admission or Advising an Issuer in a Very Substantial Acquisition or Reverse Takeover
1. Introduction
(a) A sponsor undertaking introducing activities for a listing applicant or an issuer must comply with the guidelines in this Practice Note, in order to assess the suitability of a listing applicant or the continued listing of an issuer on Catalist.
2. Understanding the Listing Applicant/Enlarged Group (Rules 225(1)(a) and 226(1)(a))
(a) To achieve a thorough understanding of a listing applicant/enlarged group and its business, the sponsor should do the following.
(i) Ensure that it has, or has access to, appropriate experience in the listing applicant's/enlarged group's sector. (ii) Use in-house specialists or external experts where necessary.
(iii) Consider the listing applicant's/enlarged group's sector, proposition, business plan or similar, historical financial information and other corporate information, including the due diligence performed further to the due diligence requirements.
(iv) Consider any issues relating to its country of incorporation and operation and any other issues that might affect its appropriateness.
(v) Undertake a visit of the listing applicant's/enlarged group's material site(s) of operation and meet the directors and key managers. The necessity of meeting any other relevant material stakeholders (e.g. key shareholders) should also be considered.
(vi) Consider appointing its own legal advisers who are independent from the listing applicant/enlarged group to assist in the sponsor's understanding of the listing applicant/enlarged group and to provide advice to the sponsor that is independent of the listing applicant/enlarged group.
(vii) Consider and advise on the suitability and competence of other professional advisers involved in the admission, including consultants.
3. Listing Applicant's/Enlarged Group's Directors and Board (Rule 225(1)(b) and 226(1)(b))
(a) To assess the appropriateness of a listing applicant/enlarged group and its securities for Catalist, the sponsor should do the following.
(i) Investigate and consider the suitability of each director and proposed director of the listing applicant/enlarged group and consider the efficacy of the board as a whole for the company's needs.
(ii) Issue and review directors' questionnaires and review directors' CVs.
(iii) Test the information revealed by the above questionnaires and CVs, for example by conducting third party checks, press searches, Accounting and Corporate Regulatory Authority (ACRA) checks and taking-up references. For directors who are not Singapore-based, other appropriate investigations should be undertaken.
(iv) Extend these investigations and considerations as appropriate to key managers and consultants who are disclosed in the offer document.
(v) Consider undertaking such investigations in relation to substantial shareholders at admission as appropriate, especially where there is uncertainty as to their identity or where they are not established institutions, in particular to ascertain the existence of shadow or de facto directors.
(vi) Analyse any issues arising from these investigations, in particular as to how they could affect the listing applicant's/enlarged group's appropriateness to be admitted to Catalist and be publicly traded.
(vii) Consider each director's suitability and experience in relation to their (proposed) company role.
(viii) Consider the board of directors as a whole in relation to the listing applicant's/enlarged group's needs, for example given its type, size, expected profile and that the listing applicant/enlarged group will be admitted to a Singapore-based, English-language public market.
(ix) Consider, with the directors of a listing applicant/enlarged group, the adoption of appropriate corporate governance measures.
4. Due Diligence (Rule 225(1)(c))
(a) When preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, the sponsor should do the following.
(i) Undertake due diligence including at a minimum, complying with the due diligence guidelines issued by The Association of Banks in Singapore where applicable, or such other satisfactory and no less strict due diligence guidelines or processes, in addition to any other appropriate due diligence.
(ii) Exercise its own judgment on the nature and extent of due diligence work needed to satisfy itself as to suitability to list and have knowledge of all relevant facts and circumstances concerning a listing applicant's/enlarged group's ability to meet the Exchange's listing requirements.
(iii) Take all reasonable steps to verify the facts and, if requested, be readily able to confirm them to the Exchange. The sponsor must be in a position to substantiate its opinions, such as in respect of the integrity of the management and controlling shareholders or that the accounts are genuine and conform to applicable standards.
(iv) Oversee the entire due diligence process, satisfying itself that it is appropriate to the listing applicant/enlarged group and transaction being done.
(v) Ensure that any material issues arising are dealt with or otherwise do not affect the suitability of the listing applicant/enlarged group for Catalist.
(vi) Look at the connection to Singapore of every foreign applicant. This is to ensure sufficient local representation and the ability to take steps in the event of a problem. A foreign issuer is required to have a resident director. To meet the objective of sufficient connection, residence means either citizenship or permanent residence status.
(vii) Ensure appropriate professional firms are engaged as needed — particularly for financial and legal due diligence.
(viii) Be able to satisfy the Exchange that it has conducted due diligence through independently-sourced information, by a reputable agent, on the applicant or its management or controlling shareholders. The Exchange may request a sponsor to furnish the results of any independent verification undertaken.
(ix) Exercise due care to prevent any leakage of confidential information to persons not entitled to receive it.
(x) Continually review its due diligence procedures to see how they might be refined or improved.
(b) Without affecting the sponsor's obligation to undertake due diligence, the Exchange may conduct checks using an agency the Exchange appoints. However, the Exchange will usually make inquiries of the sponsor before it decides to conduct such checks. The cost would be borne by the listing applicant/enlarged group. If the Exchange undertook such a check, it would be likely to involve (as circumstances warranted):
(i) 2 or 3 key persons, and their personal and business backgrounds and integrity, role in the listing applicant's/enlarged group's business, interests in other companies, and any criminal or other records or links to money laundering or organized crime.
(ii) The listing applicant's/enlarged group's history, structure, accounts, business reputation and development, its related companies, its other businesses, and the influence of key persons.
5. Preparing the Offer Document or Very Substantial Acquisition/Reverse Takeover Circular (Rule 225(1)(d))
(a) To properly oversee the preparation of the offer document or circular, the sponsor should:
(i) Be actively involved in the preparation of the document.
(ii) Satisfy itself that the document has been prepared in compliance with the Regulations under the Securities and Futures Act and relevant Rules and that the statements and information in it have been made after due and careful enquiry.
(iii) Lead the drafting of the sections of the document that relate to the business of the listing applicant/enlarged group and the risk factors, being satisfied that they take account of matters raised by due diligence.
(iv) Be satisfied that the financial and additional information sections have been appropriately prepared.
(v) Consider whether any specialist third party reports are required.
(vi) Be satisfied that appropriate verification of the document and any related notifications has taken place.
(vii) Liaise with the Exchange to the extent that any rule interpretation may be required.
(viii) Ensure the sponsor's declaration is on the cover (or first page if no cover) of the document.
6. Rule Compliance (Rule 225(1)(e) and 226(1)(c))
(a) To satisfy itself that the listing applicant/enlarged group has in place sufficient systems, procedures and controls, the sponsor should:
(i) Be satisfied that procedures within the listing applicant/enlarged group have been established to ensure compliance with the Rules.
(ii) Be satisfied that the listing applicant's/enlarged group's directors understand their obligations under the Rules.
(iii) Be satisfied that the listing applicant's/enlarged group's directors have been fully advised of both their own and the entity's continuing responsibilities and obligations under the Rules.
(iv) Be satisfied that the listing applicant's/enlarged group's directors are aware of when they should consult with, or seek the advice of, the sponsor.
(v) Be satisfied that the listing applicant's/enlarged group's directors are aware of the practical consequences of the rule requirements.
7. Listing Applicant's/Enlarged Group's Professionals and Consultants (Rule 225(1)(f))
(a) When considering and advising on the suitability and competence of other professionals and consultants, the sponsor should also assess the suitability of the listing applicant's/enlarged group's reporting and ongoing auditors, including their reputation, track record, relevant experience and adequacy of resources.
8. Suitability for Listing (Rule 225)
(a) Under Rule 225, a sponsor conducting introducing activities must be satisfied, having made reasonable due diligence enquiries and having considered all relevant matters, that a listing applicant is suitable to be listed, or in the case of a very substantial acquisition or reverse takeover, that the issuer is suitable for continued listing. Apart from addressing the Rule in detail, the sponsor must also address whether the entity's structure or operations are suitable for the marketplace.
(b) Entities that may be involved in or connected with any money laundering, terrorist financing, or other illicit activities should not be listed. Other entities may be unsuitable because their businesses are not currently addressed by the Rules (e.g. companies engaged in scientific research and development with no established financial track record, investment funds, trust structures or structured warrants), or because their structures are not currently addressed (e.g. differential voting rights). A sponsor should consult the Exchange if in doubt as to the suitability of an entity.
Amended on 1 February 20111 February 2011.
9. Conditions to be Fulfilled After Listing
(a) There may be conditions imposed by a sponsor on a listing applicant/enlarged group that the listing applicant (issuer) must meet after it is admitted. Such conditions should not be material to the suitability of the listing applicant for listing or the issuer for continued listing, e.g. conditions related to interested persons transactions.
(b) Proposed conditions must be disclosed to the Exchange as part of Appendix 4A.
Amended on 7 February 20207 February 2020.
Practice Note 2C Guidelines for Continuing Sponsorship
Cross-referenced from Rules 226(2), 226(3), 226(4) and 228
1. Introduction
(a) A sponsor undertaking continuing activities for an issuer must comply with the guidelines in this Practice Note.
2. Regular Contact (Rule 226(2)(a))
(a) As part of maintaining regular contact with its issuer, the continuing sponsor should:
(i) Assess whether the issuer continues to understand its obligations under the Rules.
(ii) Assess whether it is being kept up-to-date with developments at the issuer so that it can advise the company.
(iii) Establish a regular contact routine.
(iv) Hold discussions with the directors where appropriate.
(v) Be satisfied that any procedures established at admission continue to be effective.
(vi) Review the trading and financial performance of the issuer on a regular basis.
(vii) Endeavour to attend shareholder meetings of the issuer.
(viii) In the case of an overseas issuer, arrange for visits as necessary to get a proper understanding of their operations and personnel.
3. Review of Documents Released to the Market (Rule 226(2)(b))
(a) When reviewing documents to be released by the issuer to shareholders or to the market, the sponsor should:
(i) Be readily accessible for reviewing all such documents so that the requirement of immediate disclosure can be met.
(ii) Review the document with a view to ensuring rule compliance and in particular proper disclosure.
(iii) Establish in advance a procedure for the issuer to identify and notify the sponsor of all documents to be released to the market.
(iv) Ensure that the statement required in Rule 753(2) is included prominently in all documents to be released to its shareholders or the market.
4. Monitor Trading (Rule 226(2)(c))
(a) As part of monitoring the trading of the listed securities of its issuer, the sponsor should:
(i) Be aware of the issuer's daily trading activity.
(ii) Contact the issuer if there is a substantial movement in the price or volume of the issuer's securities, to ascertain whether an announcement or other action is required.
(iii) Arrange for regular press monitoring to identify any material information reported in the press which has not been released via SGXNET. This is particularly important when the sponsor is aware of material undisclosed price-sensitive information in existence.
(iv) Respond speedily to enquiries from the Exchange.
(b) The sponsor may put in place arrangements with third parties for assistance in monitoring.
5. Advise on Changes to the Board (Rule 226(2)(d))
(a) In advising its issuer on the suitability of directors arising from proposed changes in the issuer's board of directors, the sponsor should:
(i) Investigate and consider the suitability of each director and proposed director of the issuer and consider the efficacy of the board as a whole for the company's needs.
(ii) Issue and review directors' questionnaires and review directors' CVs.
(iii) Test the information revealed by the above questionnaires and CVs, for example by conducting third party checks, press searches, ACRA checks and taking-up references. For directors who are not Singapore-based, other appropriate investigations should be undertaken.
(iv) Analyse any issues arising from these investigations, in particular as to how they could affect the issuer's appropriateness for continued listing on Catalist and trading in a public market.
(v) Consider each director's suitability and experience in relation to their (proposed) company role.
(vi) Consider the board of directors as a whole in relation to the issuer's needs, for example given its type, size, profile and that the issuer is listed on a Singapore-based, English-language public market.
6. Trading Halt or Suspension of a Counter (Rule 226(2)(f))
(a) As part of its review of trading, or when an announcement should be made, the sponsor may form the view that the issuer needs to halt the trading in, or suspend, its securities. If so, the sponsor must inform the issuer, together with its reasons, and inform the Exchange at the same time. This allows the Exchange to watch the counter and to expect the request for a trading halt or suspension from the issuer.
(b)The issuer, not the sponsor, requests the Exchange to halt or suspend trading in its securities. If the issuer does not contact the Exchange, the Exchange will contact the issuer for an explanation as to why it has not accepted the advice of its sponsor. The Exchange may take action under the Rules to halt or suspend the securities in the usual way.
7. Listing of Additional Securities (Rule 226(4)(b))
(a) In assessing whether an issuer's listing of additional securities complies with rule and legal requirements, a sponsor should take the following into consideration and determine if disclosure in a circular and/or announcement is necessary:
(i) The financial position of issuer, including:
(A) if the group is currently under pressure from its bankers to repay any of its borrowings and whether there are any arrangements for refinancing of the group's borrowings; and
(B) whether the group has sufficient resources to meet its capital commitments.
(ii) In a rights issue:
(A) the amount of cash raised from issues of securities in the past 2 years and whether the proceeds were used for the intended purposes; and
(B) if applicable, whether a valid share issue mandate is available and sufficient for the proposed issue of securities.
(iii) In an issue of convertible securities:
(A) the form, basis of allotment, exercise price, exercise period and whether the convertible securities are detachable;
(B) the number of new shares that will be issued upon full exercise or conversion of the proposed convertible securities as a percentage of the applicant's issued shares as at the date of the application; and
(C) the number of new shares that will be issued upon full exercise or conversion of the proposed convertible securities and all outstanding convertible securities as a percentage of the applicant's issued shares as at the date of the application.
(iv) In an issue of shares for cash under Part IV of Chapter 8:
(A) the issue price and the weighted average price for the period specified in Rule 811;
(B) the amount of cash raised from issues of securities in the market in the past 2 years and a statement on whether the proceeds had been used for the intended purposes;
(C) where the end-placee(s) is not procured by a placement agent, that the end-placee(s) and its(their) directors and substantial shareholders (if applicable) have no connections (including any business relationship) with the issuer and its directors and substantial shareholders; and
(D) if applicable, whether a valid share issue mandate is available and sufficient for the proposed issue of securities.
8. Ending of Sponsorship (Rule 228)
(a) An outgoing sponsor should discuss its experience of the issuer and the reasons for ending the sponsorship. The Rules require an outgoing sponsor to be constructive and open with a prospective new sponsor.
(b) The outgoing sponsor must disclose any compliance issues to the incoming sponsor in order to meet its obligation under Rule 228(5). If the issuer is not in compliance with the Rules, or is in poor financial health, the new sponsor may require rectification or disclosure before it starts its sponsorship role. In this event, the incoming sponsor should liaise with the Exchange to ensure that a smooth transfer of responsibilities from the outgoing sponsor to the incoming sponsor is possible.
Practice Note 4A Equity Securities Listing Procedure
Cross-referenced from Chapters 4 and 10
1. Introduction
(a) This Practice Note explains:
• the Exchange's procedures for an initial public listing, a very substantial acquisition or reverse takeover; and
• the principles in dealing with comments the Exchange occasionally receives from the public on a proposed initial public listing, very substantial acquisition or reverse takeover.
2. Exchange's Procedure
(a) A sponsor has the primary responsibility for assessing a listing applicant's suitability for listing, or an issuer's suitability for continued listing when an issuer makes a very substantial acquisition or is the subject of a reverse takeover. If the sponsor considers that the listing applicant is suitable for listing or that an issuer is suitable for continued listing, it should complete the required documents. The Exchange will normally admit the listing applicant on receipt of conforming documents. If there are concerns, the Exchange will ask the sponsor for clarification or explanation. The Exchange may require the sponsor to produce information to satisfy it of the listing applicant's suitability to be listed or the issuer's suitability for continued listing.
(b) The Exchange may require the sponsor to undertake more due diligence. It may require the listing to be subject to conditions or may require the listing applicant or issuer to provide additional disclosure.
(c) If the sponsor is of the view that the listing applicant is suitable for listing or the issuer for continued listing, but some rules need to be waived, the sponsor will have to consider whether waivers should be granted, and make the appropriate application to the Exchange. If waivers are granted, they must be disclosed in the offer document, or as pre-quotation disclosure if given later, in a case of a new listing; or in the circular or by way of an announcement in a case of a very substantial acquisition or reverse takeover.
3. Comments Received
(a) The Exchange will give consideration to comments received on the offer document or circular from the public (whether anonymous or not).
(b) All comments will be forwarded to the sponsor who must take such actions as it deems fit.
(c) The Exchange may require the sponsor to investigate and report its findings to the Exchange.
(d) The Exchange may also carry out its own investigation and, where appropriate, enter into correspondence with the person who sent the comments.
(e) The Exchange may delay the listing until it is satisfied with the findings. The Exchange is not obliged to disclose any findings or its conclusion.
Practice Note 4B Requirements for Lodgement or Submission of Documents
Cross-referenced from Rules 406(10), (11) and (12), 407, 865 and Appendix 4F
Part I Introduction
1. This Practice Note sets out the general requirements for the lodgement of documents with the Exchange.
2. The documents which must be lodged with or submitted to the Exchange include:
(a) an offer document;
(b) a preliminary offer document;
(c) a supplementary offer document;
(d) a replacement offer document;
(e) an offer information statement;
(f) a circular to the shareholders of an issuer seeking the approval of a very substantial acquisition or reverse takeover; and
(g) an issuer's undertaking not to make an exempt offer.
Part II Requirements for Lodgement or Submission in Electronic Form
3. A document to be lodged with the Exchange under the Rules must be lodged or submitted in electronic form (in searchable format) and must comply with the following requirements:
(a) The document must be in portable document format (PDF), or such other format as the Exchange may from time to time allow.
(b) The document must be lodged or submitted to the Exchange in a CD-ROM, or such other medium as the Exchange may from time to time allow, containing the document.
(c) The medium by which the document is lodged or submitted must be labelled with:
(i) the names of the person making the offer and the listing applicant;
(ii) the nature of the document; and
(iii) the date the document is lodged with or submitted to the Exchange.
4. When the document is lodged with or submitted to the Exchange in electronic form under paragraph 3 above, an electronic image of each of the following must be lodged with or submitted together with the document:
(a) every signature on or accompanying the document;
(b) any duly signed form which is part of or which accompanies the document;
(c) any duly signed statement referred to in paragraph 8(b) that the copy of the document submitted in paper form is a true copy of the document lodged with the Exchange in electronic form;
(d) any duly signed letter or report (other than a statutory audit report) enclosed in or forming part of the document;
(e) any duly signed expert's consent required to be lodged;
(f) any duly signed sponsor's consent and (if applicable) issue manager's consent required to be lodged;
(g) any duly signed underwriter's consent required to be lodged;
(h) if applicable, the authorisation referred to in Part IV;
(i) any pre-deal research report which has been issued in respect of the securities to which the document relates; and
(j) any other duly signed statement or letter required under the Rules to be lodged or submitted together with the document.
5. An electronic image to be lodged with or submitted to the Exchange under paragraph 4 must comply with the following requirements:
(a) The image must be in portable document format (PDF), or such other format as the Exchange may from time to time allow.
(b) The image must be lodged or submitted by submitting to the Exchange a CD-ROM, or such other medium as the Exchange may from time to time allow, containing the image.
(c) The medium by which the image is lodged or submitted must be labelled with:
(i) a description of what the electronic image relates to; and
(ii) the nature and date of lodgement of the document lodged with the Exchange in electronic form under paragraph 3 together with which the electronic image is lodged or submitted.
6. For the avoidance of doubt, a document lodged with or submitted to the Exchange in electronic form under paragraph 3 and every electronic image lodged with or submitted to the Exchange together with that document under paragraph 4 may be contained in the same medium.
Part III Requirements for Lodgement in Paper Form
7. A person who lodges any document in electronic form must also provide a copy of that document in paper form to the Exchange:
8. A copy of any document in paper form required under paragraph 7:
(a) must comply with the following requirements:
(i) the copy of the document must be on paper that is 297 millimetres in length and 210 millimetres in breadth (A4 paper size); and
(ii) the contents of the copy of the document must be legible; and
(b) must be accompanied by a true and complete electronic image of a signed statement of:
(i) in the case where the person making the offer is an individual:
(A) the person making the offer;
(B) a person authorised in writing by him; or
(C) an advocate and solicitor acting on his behalf;
(ii) in case where the person making the offer is an entity:
(A) a director or an equivalent person of the entity;
(B) a person authorised in writing by a director or an equivalent person of the entity; or
(C) an advocate and solicitor acting on behalf of the entity; or
(iii) in a case where the person making the offer is the government of a State:
(A) an official of the government of the State who is authorised to sign the statement on its behalf; or
(B) an advocate and solicitor acting on behalf of the government of the State,
verifying that the copy of the document in paper form is a true copy of the electronic document lodged with or submitted to the Exchange under paragraph 3.
9. The electronic image of the signed statement under paragraph 8(b) must comply with the requirements in paragraph 5.
Part IV Authorisation
10. A person making an offer of securities may authorise another person to sign, on its behalf:
(a) any document lodged with the Exchange; or
(b) any verification statement referred to in paragraph 8(b).
11. The following persons may be authorised:
(a) in a case where the person making the offer is an individual, a person authorised in writing by the individual;
(b) in a case where the person making the offer is an entity, a person authorised in writing by a director or an equivalent person, or a proposed director or an equivalent person, of the entity; or
(c) in a case where the person making the offer is the government of a State, an official of the government of the State who is authorised to sign the document or statement, as the case may be, on its behalf.
12. A true and complete electronic image of the authorisation must be submitted to the Exchange, together with the document lodged with the Exchange or statement, as the case may be. The electronic image of the authorisation must comply with the requirements in paragraph 5.
13. The authorisation submitted to the Exchange should not, as a general rule, be more than 3 months old.
Part V Administrative Procedures
14. Lodgement of documents must be made by appointment between 9am and 5pm from Mondays to Fridays (except public holidays).
15. The timetable for initial public offerings and very substantial acquisitions/reverse takeovers is contained in Appendix 4F.
Part VI Specific Requirements for Documents
Preliminary Offer Document
16. Where an issuer wishes to exclude information from a preliminary offer document, other than that permitted under Rule 407(6), an application must be made to the Exchange for the relevant exemption before the document is lodged with the Exchange.
17. Where the issuer lodges a preliminary offer document with the Exchange, a final offer document must be lodged subsequently, which includes such information required by Rule 407(1) to (5) that was omitted in the preliminary offer document.
Amended Offer Document
18. Any amendment to an offer document must be lodged with the Exchange in accordance with the requirements in Parts II and III.
19. Both the electronic copy and paper copy of the amended offer document must show the amendments tracked over the originally lodged offer document. Reasonable steps should be taken (including the use of different fonts, colours or highlights) to distinguish between:
(a) amendments made due to the insertion of information required under Rules 407(1) to (5) for registration; and
(b) any other amendments made.
20. In addition, a clean electronic copy of the amended offer document must be lodged for posting on the Exchange's website.
Supplementary or Replacement Offer Document
21. Any supplementary or replacement offer document must be lodged with the Exchange in accordance with the requirements in Parts II and III.
22. Both the electronic copy and paper copy of a replacement offer document must show the amendments tracked over the originally lodged offer document.
Amended on 7 February 20207 February 2020.
Practice Note 4C Requirements for Mineral, Oil and Gas Companies
Cross-referenced from Rules 440, 441,704(35), 705(7), 1014(2) and 1204(23)
Added on 1 February 20111 February 2011.
1. Introduction
1.1 This Practice Note sets out guidance on the requirements for mineral, oil and gas companies.
1.2 Exploration, development or production of mineral, oil or gas may be considered as principal activities of the issuer if the mineral, oil and gas activity of the issuer and/or its subsidiaries, based on the issuer's latest audited consolidated financial statements: (i) represents 50% or more of the total assets, revenue or operating expenses of the group; or (ii) is the single largest contributor based on any of the tests in (i) above.
The issuer is required to make an announcement when any of the above situation occurs and will thereafter be required to comply with all the continuing listing rules applicable to mineral, oil and gas companies.
The issuer is required to make an announcement when any of the above situation occurs and will thereafter be required to comply with all the continuing listing rules applicable to mineral, oil and gas companies.
1.3 A mineral, oil and gas company must demonstrate plans to obtain all necessary approvals required to proceed with development. The qualified person must provide basis for expecting that all required approvals will be granted and the directors must provide evidence of the company's intention to proceed with development within a reasonable time frame. The qualified person should highlight and discuss any material unresolved matter that is dependent on a third party on which extraction is contingent.
1.4 The following sets out the Listing Rules specifically applicable to mineral, oil and gas companies:
(a) Rule 438;
(b) Rule 439;
(c) Rule 440;
(d) Rule 441;
(e) Rule 442;
(f) Rule 443;
(g) Rule 444;
(h) Rule 704(35);
(i) Rule 705(6);
(j) Rule 705(7);
(k) Rule 712;
(l) Rule 718;
(m) Rule 1006(e);
(n) Rule 1014(2);
(o) Rule 1015(2);
(p) Rule 1015(3);
(q) Rule 1207(23); and
(r) Appendix 7D.
Other generally applicable Listing Rules also apply to mineral, oil and gas companies.
2. General Requirements for Disclosure of Reserves, Resources or Exploration Results
2.1 All mineral, oil and gas companies must comply with the following requirements:
(a) All statements and reports in relation to reserves, resources or exploration results mustbe prepared and presented in accordance with a Standard. The listing applicant or issuer muststate in the offer document, circular or announcement, as the case may be, the Standard used.
(b) Tabuldated estimates of reserves and resources should be presented in the format as set out in Appendix 7D.
(c) Assay results must include disclosure of the analytical methods used and the name of the analytical laboratories which assayed the material sampled, together with details of their relationship, if any, to the listing applicant or issuer. The accreditation of each laboratory, or lack thereof, must also be disclosed.
3. Additional Disclosure Requirements for Offer Document
3.1 In addition to paragraph 2 of this Practice Note, the prospectus, offering memorandum or introductory document relating to a mineral, oil and gas company must include the following:
(a) Information required in paragraph 1.3 above;
(b) the directors' opinion which must state, without requiring a profit forecast that in their reasonable opinion, the working capital available to the applicant is sufficient for the present requirements and for at least 18 months after listing;
(c) a statement by the listing applicant that no material changes have occurred since the effective date of the qualified person's report. Where there are material changes, these should be prominently disclosed together with a statement that the listing applicant will as soon as practicable following its listing, announce the qualified person's report or the independent qualified person's report, as the case may be, on the material changes in accordance with Rule 704(35);
(d) the listing applicant's plans and milestones to advance to production stage with capital expenditure for each milestone for an issuer applying for listing pursuant to Rule 439. These plans must be substantiated by the opinion of an independent qualified person;
(e) the listing applicant's policies and practices in relation to operating in a sustainable manner, including:
(i)the listing applicant's policy with regards to environmental and social issues;
(ii)impact of the listing applicant's business practices on the environment and the communities in which it operates; and
(iii)environmental and social risks faced by the listing applicant.
(f) In relation to a listing applicant whose principal activities consist of exploration for mineral, oil or gas, a clear and prominentstatement on the front cover highlighting that fact; that the listing applicant may not progress to the next stage of development or to a stage where it is able to generate revenue; and industry-specific risks.
4. Additional Continuing Obligations
4.1 In addition to paragraph 2 of this Practice Note, a mineral, oil and gas company must also comply with the following:
(a) Exploration, development and production activities mustbe reported in a timely and responsible manner. If the issuer releases partial results, e.g. the first two holes of a six hole program, it must ensure that the balance of the results are disclosed in a timely manner whether the results are positive or negative.
(b) Where work has been discontinued on properties about which the issuer has made prior disclosure, there must be further information provided as to any undisclosed results and reasons for the cessation of work.
5. Qualified Person's Report
5.1 The qualified person's report must be prepared in accordance with a Standard.
5.2 The qualified person must review the information contained in the offer document, circular or announcement, as the case may be, which relates to the qualified person's report and confirm that the information presented is accurate, balanced, complete and not inconsistent with the qualified person's report. The qualified person's report must not include blanket disclaimers or contain indemnities for fraud and gross negligence. If the qualified person's report includes a statement on the qualified person not accepting any responsibility for the completeness or adequacy of the information provided by the company and its advisors and for information extracted from public sources, this qualification must be subject to the qualified person having: (i) made reasonable enquiries and exercised his judgement on the reasonable use of such information; and (ii) found no reason to doubt the accuracy or reliability of the information.
5.3 A qualified person's report must include the following:
(a) Executive summary
(b) Introduction
• Full name and if applicable, the partner/director in charge of the report; professional qualifications, years of relevant experience, Professional Society Affiliations and Membership (including details of a recognised professional association) of the qualified personand the address of the qualified person's firm/company;
• Aim of the report;
• Scope of the report;
• Basis of the report — including data sources, data validation and reliance on other experts; and
• Standard used
(c) Property description, size, location, access, natural and cultural environment, including:
• listing applicant's/issuer's assets and liabilities, including the following summary table of assets:
| Asset name/Country | Issuer's interest (%) | Development Status | Licence expiry date | Licence Area | Type of mineral, oil or gas deposit | Remarks |
• nature and extent of listing applicant's/issuer's rights of exploration or extraction; and
• description of the economic conditions for the working of the licenses, concessions or similar, with details of the duration and other principal terms and conditions of the concessions including fiscal conditions, environmental and rehabilitation requirements, abandonment costs and any necessary licenses and consents including planning permission.
(d) History of the property, including exploration history and any production history.
(e) Geological and geophysical setting, type and characteristics of the deposit/accumulation
(f) Exploration data including drilling and sampling, sampling and analysis methods, sample preparation and security, quality assurance and quality control on the sample analyses.
(g) Mineral processing and metallurgical testing, if applicable.
(h) Resource and reserve estimates and exploration results, as applicable, in accordance with the relevant Standard, including a summary of reserves and resources in the form of Appendix 7D.
(i) Planned extraction method, processing method, capital costs, operating costs, considerations including social, environmental, health and safety factors that may affect exploration and/or exploitation activities; and production schedule, if applicable.
(j)) Financial analysis of the operations, taxes, liabilities, marketing if applicable.
(k))Interpretation and conclusions
(n) [deleted]
(o) [deleted]
(p) [deleted]
(q) [deleted]
(r) [deleted]
6. Summary Qualified Person's Report
6.1 A summary report prepared by a qualified person shall contain the following:
(a) Appendix 7D and a commentary of material changes to the issuer's reserves and resources. The commentary should include information on the changes to the reserves estimates, indicating explanation for the changes (e.g. extensions and improved recovery, technical revisions, discoveries, acquisitions, dispositions, economic factors, production);
(b) with regard to minerals, Table 1 of the JORC Code; and
(c) with regard to oil and gas, paragraphs 5.3(b) and 5.3(c) of Practice Note 4C.
7. Valuation Report
7.1 The prospectus, offering memorandum or introductory document relating to a mineral, oil and gas company must include a valuation report on the assets of the listing applicant. The valuation report must be prepared by an independent expert in accordance with the VALMIN Code, SPEPRMS or an equivalent standard that is acceptable to the Exchange. The effective date of the valuation report must not be more than 6 months from the date of lodgement of the offer document.
7.2 With regard to any valuation, the following must be disclosed:
(a) the Standard used;
(b) principal assumptions used in arriving at the valuation, including but not limited to, assumed commodity prices, rate of discount and rate of inflation, and the basis for each assumption. Contracted commodity prices must be used where applicable and available. If unavailable, either forecast or constant prices may be used. Where forecast commodity prices are used, this should be accompanied by a statement by the qualified person that such forecast was arrived at after due and careful enquiry and reflects their view of a reasonable outlook of the future;
(c) analysis of the sensitivity of such valuations to variation in the principal assumptions provided in (b) above. In relation to commodity prices, the scenarios must include both constant and forecast prices. In relation to the rate of discount, the scenarios must include the weighted average cost of capital;
(d) an estimate of net present value. If the valuation is arrived at on an alternative basis, an explanation of the basis and the reasons for adopting the basis; and
(e) risk factor in the prospectus highlighting the uncertainties inherent in the assumptions made in arriving at the valuation and the effects they may have on the valuation of the mineral, oil and gas assets and the value of the offering shares.
8. Farm-in and Farm-out Transactions
8.1 A farm-in transaction refers to an acquisition of a partial interest of an existing asset by a company from a third party. A farm-out transaction refers to a sale of a partial interest of an existing asset owned by a company to a third party.
8.2 Farm-in and farm-out transactions are excluded from the requirements in Chapter 10 if they are in the ordinary course of business of the issuer under Rule 1002.
8.3 Where a farm-in or farm-out transaction only changes an issuer's effective interest in the asset, Rule 704(35) is not applicable. However, the issuer must consider if the transaction needs to be disclosed under Rule 703. If so, the issuer must disclose its new working interest and/or net entitlement.
Amended on 29 September 201129 September 2011, 27 September 201327 September 2013 and 23 August 201823 August 2018.
Practice Note 4D Training for Directors with No Prior Experience
- Introduction
- Rule 406(3)(a) provides that a director who has no prior experience as a director of a listing applicant listed on the Exchange (a "First-time Director") must undergo training in the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange.
- This Practice Note prescribes the training that a First-time Director must undergo within one year from the date of his appointment to the board ("Mandatory Training"). If any director of an issuer which is newly listed on the Exchange has not attended any training as prescribed in paragraph 2 below, such director must attend Mandatory Training by the end of the first year of the issuer's listing.
- Mandatory Training
- To fulfil the Mandatory Training requirements, First-time Directors must attend one of the training programmes conducted by a training provider as specified in Schedule 1 to this Practice Note.
- Persons with Relevant Experience
- The Exchange expects all First-time Directors to attend Mandatory Training.
- In exceptional circumstances, First-time Directors assessed by the issuer's Nominating Committee to possess relevant experience need not attend Mandatory Training. In assessing the relevant experience, the Nominating Committee must have regard to whether the experience is comparable to the experience of a person who has served as a director of an issuer listed on the Exchange. The issuer's Nominating Committee must disclose its reasons for its assessment that the First-time Director possesses relevant experience. Such reasons shall be disclosed in the announcement of the appointment of the First-time Director as director of the issuer or in the offer document.
- Notwithstanding paragraph 3.2 above, the Exchange has the discretion to direct a First-time Director to attend Mandatory Training.
Schedule 1
| Training Provider | Mandatory Training |
| Singapore Institute of Directors | Listed Entity Directors Programme The First-time Director must attend all the core modules. The First-time Director must also attend the elective modules relevant to his appointment on the board of the issuer. |
| Singapore Institute of Directors | Listed Entity Directors Bridging Programme The First-time Director must also have completed one of the recognised programmes, and attend the elective modules for the Listed Entity Directors Programme that are relevant to his appointment on the board of the issuer. |
| Institute of Singapore Chartered Accountants and SAC Capital | Board Of Directors (BOD) Masterclass Programme The First-time Director must attend all the mandatory classes and modules. The First-time Director must also attend the optional classes and modules relevant to his appointment on the board of the issuer. |
Added on 1 January 20191 January 2019 and amended on 1 January 2022, 1 February 2024 and 1 October 2024.
Practice Note 4E Summary Property Valuation Report
Rule 416(3)(c) requires a summary property valuation report to contain the information required for prospectuses and circulars in accordance with the standards of the Singapore Institute of Surveyors and Valuers. The information required for prospectuses and circulars is set out in a Practice Guide published by the Singapore Institute of Surveyors and Valuers.
Please click here to view the Practice Guide.
Added on 12 February 2021.
Practice Note 7A Continuing Disclosure
Cross-referenced from Rule 703 and Appendix 7A
1. Introduction
1.1 This Practice Note provides guidance on the continuing obligations of issuers in respect of Listing Rule 703 on the disclosure of material information and Appendix 7A on the Exchange's Corporate Disclosure Policy. Issuers should apply the principles outlined in the Practice Note flexibly and sensibly. Issuers are still obliged to make their own judgments when determining whether a particular piece of information is material and requires disclosure. The purpose of timely disclosure of material information is to allow the operation of a fair, orderly and transparent market. The following discussion should be read in that light.
1.2 Issuers should consult with their sponsors with respect to the application of the rules.
1.3 In case of doubt, sponsors must consult the Exchange.
2. Interaction with the SFA
2.1 The Exchange's continuous disclosure rules are given statutory backing under Section 203 of the SFA. A breach of the Exchange's continuous disclosure obligations may be considered an offence under the SFA and may have serious legal consequences for the issuer and its officers.
3. Guidance on what constitutes material information
3.1 Rule 703(1) requires an issuer to announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which:
(a) is necessary to avoid the establishment of a false market in the issuer's securities (Rule 703(1)(a)). Appendix 7A explains that a false market may exist if information is not made available that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the securities. Such information may be referred to as “trade-sensitive” information; or
(b) would be likely to materially affect the price or value of the issuer's securities (Rule 703(1)(b)). Information would be likely to have such material price impact if it is likely to prompt a significant change in the price or value of the issuer's securities. Such information may be referred to as “materially price-sensitive” information.
3.2 Information is considered material and required to be disclosed under Rule 703(1) as long as it is either trade-sensitive or materially price-sensitive. Issuers must exercise judgment when deciding whether information is material using both these tests. If an issuer is unable to ascertain whether the information is material, the recommended course of action is to announce the information via SGXNET.
Materially price-sensitive information
Materially price-sensitive information
3.3 The test of whether information is materially price-sensitive is an objective one. Issuers must assess, on an ex-ante basis, if the information is likely to have a material impact to the price of its securities. It requires issuers to foresee how investors will react to any particular information when it is disclosed.
3.4 Issuers' assessment should consider the significance of the information in the context of the issuer's business. Information that might be immaterial to another entity may be material to the issuer, as the impact to the issuer would depend on its business and market expectations of the issuer's performance. Issuers should therefore rely on experience and knowledge of past market impact of similar type of disclosures made under comparable circumstances to form their assessment.
3.5 Issuers should also consider prevailing market conditions in their assessment of price impact. Factors to be considered could include liquidity of the issuer's securities, macroeconomic or sector-specific factors and the general market sentiment. Information that might be considered immaterial during stable macroeconomic and industry conditions but could become material when the industry is undergoing extreme volatility or a protracted downcycle.
3.6 For the purposes of assessing if a breach of Rule 703(1)(b) has occurred, the Exchange will examine actual market reaction to the information when it is disclosed. If information that is disclosed does not result in a significant change in price of the securities, then it is likely that the information may not be considered to be materially price-sensitive. The Exchange may examine market reaction over a length of time suitable for the liquidity of the securities. For example, if the securities are not actively traded, it may be necessary to look at a longer period of activity.
Trade-sensitive information
Trade-sensitive information
3.7 The test for trade-sensitive information does not focus on the potential price impact of information, but rather the likelihood that the omission or failure to disclose such information will result in the market trading on an uninformed basis. Such information must be disclosed to avoid the establishment of a false market in the securities. As set out in the Corporate Disclosure Policy in Appendix 7A, a false market may exist if information is not made available that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the securities.
3.8 The test of whether information is trade-sensitive is also an objective one. The question to ask is, is the information expected to influence an investor who commonly invests in securities to subscribe for, or buy or sell the issuer's securities in reliance of that information, if it had been known beforehand? If so, the information is trade-sensitive.
3.9 The term “persons who commonly invest” is defined in Section 214 of the SFA. MAS has also issued guidelines on the interpretation of the term, which set out that the class of investors that are considered “persons who commonly invest” will be product-specific, and will include retail investors for listed shares. The Exchange will employ the same definition and interpretation for the purposes of the Listing Rules.
3.10 For practical purposes, information which is materially price-sensitive would likely also be trade-sensitive. If information has a material price impact, it would also influence investors in their investment decisions. However, trade-sensitive information need not necessarily have a material price impact. For example, information on a transaction may have a neutral effect on share price, but may be considered to be trade-sensitive if the transaction is material to the issuer and likely to influence investors' decision to invest in the securities.
3.11 Therefore, the Exchange's assessment of whether information is trade-sensitive is broader than that for materially price-sensitive information. The test for trade-sensitive information assesses the likelihood that the information, if undisclosed, will cause investors to trade on an uninformed basis. In that regard, the Exchange may consider information to be trade-sensitive, even if there is no significant market reaction to the information when disclosed.
3.12 Issuers should make their own judgment on whether information would be trade-sensitive. In particular, an issuer should consider whether a person who commonly invests in that security would likely trade in the security in reliance of that piece of information. As with the test for materially price-sensitive information, which requires issuers to assess the impact of the information to the price of the issuer's securities, issuers should review the information in the context of the issuer's business as well as prevailing market conditions in making their assessment.
4. Exceptions to Rule 703(3)
4.1 Rule 703(3) allows exception from disclosure provided that three conditions are met. These conditions are that (a) a reasonable person would not expect information to be disclosed, (b) the information is confidential and (c) the information either (i) concerns an incomplete proposal or negotiation, (ii) comprises matters of supposition or is insufficiently definite to warrant disclosure, (iii) is generated for internal management purposes, or (iv) is a trade secret. Information should be disclosed if any one of the three conditions is not satisfied.
Confidential information
Confidential information
4.2 Where material, non-public information has been reported but not released via SGXNET, the Exchange will require clarification from an issuer to ensure that the market is trading on accurate information. If information has been reported in a reasonably specific manner or from a reliable identified source, the Exchange is likely to consider that the information is no longer confidential. For example, should the report contain the salient terms of a contract or the information has been attributed to the issuer or a reliable source, this indicates that there may have been a leakage of material information. Leakage of material information would result in a loss of confidentiality and thus an issuer can no longer rely on the confidentiality exemption under Rule 703(3).
4.3 An issuer is required to announce any material, non-public information that has leaked to the market even though it was covered by the exemptions in Rule 703(3) (for example, regardless of whether the transaction is still undergoing negotiation). This is regardless of the issuer's original intentions to keep the information confidential. It is therefore important for issuers to put in place strong safeguards to preserve confidentiality of its information. If the issuer is not ready to confirm the information that was leaked or there is too much uncertainty (for example, if the transaction is undergoing negotiation), the issuer should release a holding statement to sufficiently explain its position.
4.4 If an issuer is of the view that there has been no leak, but there is unusual market activity that could be attributable to the report, the issuer should release a statement to provide clarity on the actual situation and deny or confirm the matters in the report, even if the statement may be a reiteration of information previously announced. Where there are no media reports, but unusual market activity is observed, the issuer should undertake a review to seek the causes of the unusual market activity and take action as set out in paragraph 22 of Appendix 7A. The issuer should also respond promptly to any queries made by the Exchange concerning the unusual trading activity. Failing which, the Exchange may suspend the issuer's securities from trading.
Positive example:
The Exchange issued a query to an issuer due to unusual market activity observed on the issuer's securities.
The issuer requested a trading halt on the same day, and responded that it had received a non-binding proposal from a third party who had expressed interest to purchase certain businesses of the issuer and was currently in discussions with the third party. The issuer also clarified that as at the date of the announcement, no binding offer has been made and no definitive agreements have been entered into in relation to any merger and acquisition, joint venture or strategic alliance opportunity.
Upon the subsequent confirmation of the transaction, the issuer followed up with another announcement that it had entered into a conditional share purchase agreement for the sale of a certain part of its business to a third party.
4.5 An issuer must not agree to a confidentiality clause with any other parties, for example as part of contractual terms, which may result in it not being able to comply with the continuous disclosure rules in the Listing Manual. If the test for disclosure under Rule 703 is otherwise met (for example, the entering into of a material agreement), the Exchange will expect the information to be disclosed notwithstanding that the information is confidential or that the issuer has signed a non-disclosure agreement. This requirement does not apply if Rule 703(2) applies.
Rumours or speculation
Rumours or speculation
4.6 The Exchange generally does not expect issuers to respond to rumours or speculation (including reports predicting future sales, earnings or other data) unless there is a price or volume movement in the market. However, an issuer is expected to clarify the position if the information contained in the report or rumour is reasonably specific to suggest that the information came from an insider or a reliable source. For example, if there are media reports setting out material allegations involving an issuer or its business, its Board or its management, the issuer should, where necessary, request a trading halt and promptly release an announcement to clarify its position.
Information concerns an incomplete proposal or negotiation
Information concerns an incomplete proposal or negotiation
4.7 Information that concerns an incomplete proposal or negotiation is excluded on the basis that the likelihood of such agreements proceeding is low or uncertain. Issuers cannot rely on this exception for material developments or arrangements where commitments to or from the issuer have already been made, even if there are expected to be subsequent developments that may change the potential impact.
4.8 For example, if a material transaction is subject to conditions precedent, the issuer must make prompt disclosure when commitment to undertake the transaction is made, even if the conditions precedent have yet to be satisfied. If and when there is subsequent development, issuers should then provide further updates to the market.
4.9 As another example, the service or receipt of a letter of demand or the commencement of a lawsuit may require disclosure if the amount or action claimed otherwise has a material impact, notwithstanding that negotiations on the letter of demand may be ongoing or the outcome of the lawsuit is not yet known. This is particularly so if the claim may, so long as it succeeds in part, materially impact the issuer's performance, even if the exact quantum of the claim may still be uncertain. However, if the claim or action could reasonably be characterised as bound to fail (for example, if the issuer has received legal advice to that effect), disclosure may not be necessary.
Negative example:
An issuer received a letter of demand from its lender. The amount owed by the issuer to the lender was substantial. The issuer did not immediately announce the receipt of the letter of demand, nor did it request a trading halt. The issuer said that it was still in negotiations with the lender to seek a time extension to make repayment and hence did not think that disclosure was necessary.
The Exchange determined that the receipt of the letter of demand was material and took disciplinary action against the issuer for failure to disclose the matter promptly. The Exchange considered that the receipt of a letter of demand by the issuer from its lender would be considered material information for the issuer, given the amount owed. The fact that a time extension was being sought should not have altered the decision to disclose immediately, as there was already certainty of the claim. The issuer should have announced the receipt of the letter of demand promptly.
Trade secrets
4.10 An issuer also cannot rely on reasons, such as possible erosion of the issuer's competitiveness or unfavourable impact on the issuer's business to avoid complying with the disclosure rules, unless the matter is a trade secret. Trade secrets are intellectual property of the issuer, such as a specific process, system or know-how belonging to the issuer which provides it with a competitive advantage. It does not include general information that can be easily discoverable or observed.
5. Guidance on particular situations
5.1 Examples of the types of information that could be material are provided under paragraphs 5 and 9 of Appendix 7A. However, no definitive list can be given. What may be considered material to one issuer may not be material to another. Hence each issuer must exercise its own judgment when deciding whether information is material. Apart from considering quantitative factors, an issuer should consider qualitative and circumstantial factors when deciding whether it is necessary to disclose a particular piece of information. These include trading history of the issuer, unexplained change in price or volume of the issuer's shares, volatility of the issuer's shares, operating environment of the issuer, and the total mix of information that is publicly available. As a guiding principle, an issuer should always consider whether a reasonable person would expect the information to be disclosed.
Change in the issuer's near-term earnings prospects
Change in the issuer's near-term earnings prospects
5.2 During the course of preparing its financial reports, an issuer may become aware that the company's financial position will significantly deviate from previously reported results. In such a situation, the issuer should disclose the significant deviation immediately, and not withhold it until the scheduled release of the financial report. This is made clear in paragraph 9 of Appendix 7A, which states that where there is firm evidence of significant improvement or deterioration in the near-term earnings prospects, this is likely to be considered material information which must be disclosed immediately. The same obligation also applies if there are material adjustments to the issuer's previously announced financial statements.
5.3 Issuers should take into account the information currently available to the public that might inform investors' expectations on the issuer's future performance. This will necessarily include previous prospect statements made by the issuer in its financial reports.
5.4 Apart from the financial reporting cycle, an issuer may also become aware of material changes to its near-term earnings prospects caused by general trading trends or by specific events or developments during the course of its business which may be likely to materially affect its earnings (for example, a loss of a major customer or disruption to a major supplier). The issuer should assess if such events or developments are material and require immediate disclosure. The issuer should put in place internal controls to escalate material information to the Board expediently for consideration.
Ongoing developments
Ongoing developments
5.5 In certain situations, a matter may still be developing or undergoing further assessment, and issuers may not be able to quantify the impact at the occurrence of the material event. Issuers must still make disclosure of the event without delay. Their announcement should contain sufficient information for investors to understand the potential magnitude of the event and its relevance in the context of the issuer's prospects. Useful information will include a description of the risks or uncertainties and mitigating measures to be taken by the issuer. Issuers should follow up with further announcements to the market when there are subsequent material developments.
Positive example:
A fire occurred at a storage facility of a major supplier of an issuer. The issuer made immediate announcement of the incident on SGXNET, while it was still in the process of assessing the scale of the impact.
In its announcement, the issuer included information on the extent of its reliance on that particular supplier, the immediate impact of the fire to its supply operations and obligations to existing customers, as well as mitigating measures undertaken to minimise impact of the disruption.
The issuer also stated that it was conducting further assessment of the impact, and would provide updates to the market if it is concluded that there is material impact.
Investigation on a director or an executive officer of the issuer
5.6 Under Rule 704(6)(a), an announcement of the appointment of key persons by an issuer must contain material background information as set out in Appendix 7F. Such information includes, among others, whether the key person has been concerned with the management or conduct of the affairs of any corporation or entity which has been investigated, or the subject of civil or criminal proceedings (including pending proceedings), in each case, involving a breach of law or regulatory requirement as set out in Appendix 7F relating to the securities or futures industry, or involving fraud or dishonesty.
5.7 Under Rule 720(1), an issuer must also comply with Rule 406(3) on a continuing basis, which requires, among others, a consideration of the character and integrity of directors and management.
5.8 Issuers should put in place internal controls to ensure that where directors or executive officers are notified by a regulatory authority, an exchange, a professional body or a government agency (“relevant authority”), that they are to be interviewed or under investigation, such information is escalated expediently to the Board, including the Nominating Committee. The Board should conduct an independent assessment of the matter and not rely solely on the representations made by the director or executive officer. Where investigations are on-going, directors and executive officers must continue to provide updates to the Board on material development relating to the investigations, including the conclusion of investigations, so long as they are not prohibited from doing so by the regulatory requirements.
5.9 In determining whether the information is material for disclosure, the Board should consider, among others:
(a) whether the information is material to the affairs of the issuer, taking into account factors such as:
(i) the extent to which the interview or investigation concerns the affairs of the issuer or the group;
(ii) the extent to which the issuer is reliant on the director or executive officer for the proper oversight and management of the issuer; and
(iii) the extent to which the director's or executive officer's ability to oversee or manage the issuer is compromised; and
(b) whether the investigation would affect the information previously disclosed in accordance with Rule 704(6)(a) or the assessment of the character and integrity of the director or executive officer; and
(c) the severity of the potential breach.
5.10 Subject to paragraph 5.9 above, the following events are likely to require immediate disclosure:
(a) the director or executive officer has been served with an order for the production of documents to assist in an investigation in relation to a breach of law, rule or regulation;
(b) the director or executive officer was investigated and interviewed by the relevant authority;
(c) the director or executive officer has surrendered his passport to a relevant authority, has been arrested (with or without posting bail) by a relevant authority, has been formally charged by a relevant authority or a relevant authority has imposed conditions or restrictions on the director or executive officer; or
(d) the director or executive officer has been convicted or disqualified or is the subject of any judgement or ruling.
5.11 To give clarity to such events, an announcement made pursuant to paragraph 5.10 above should contain:
(a) the name and position of the relevant director or executive officer;
(b) the relevant fact (for example, that the director has surrendered his passport to the relevant authority) and details of any other conditions or restrictions imposed by the relevant authority, where applicable;
(c) the alleged offences and the identity of the offender whom the authorities were investigating as stated in the order, where applicable;
(d) the Nominating Committee’s assessment of the suitability of the continued appointment of the director or executive officer and continued compliance with Rule 720(1) (read with Rule 406(3)) as well as the measures (if any) put in place to safeguard against risks associated with his continued appointment, where applicable;
(e) a statement by the director or executive officer that he undertakes to inform the Board of the ongoing investigation and subsequent developments; and
(f) the Board’s statement that it will continue to monitor the progress of the investigation and the Nominating Committee will continue to re-assess the suitability of the continued appointment of the relevant director or executive officer as and when there are material developments to the investigation. If no measures to safeguard against risks associated with the retention of such individual are considered necessary by the Board, this should be stated in the announcement, along with the reasons.
5.12 Where a person is a director or executive officer in multiple listed issuers, the onus is on the person to notify the Boards of all these listed issuers of his involvement in an ongoing investigation. Where an issuer has been notified by its director or executive officer of his involvement in an ongoing investigation that does not directly concern the affairs of the issuer, the Nominating Committee must still assess the suitability of the continued appointment of the relevant director or executive officer. For instance, the Nominating Committee must assess whether the investigation is material to the issuer, and whether the investigation would affect the assessment of the character and integrity of the director or executive officer. Where the Nominating Committee opines that the investigation is material to the issuer or has a bearing on the character and integrity of the director or executive officer, the issuer must announce the Nominating Committee’s assessment of the suitability of the continued appointment of the relevant director or executive officer and continued compliance with Rule 720(1) (read with Rule 210(5)) as well as the measures (if any) put in place to safeguard against the risks associated with his continued appointment. If no measures are considered necessary by the Board, this should be stated in the announcement, along with the reasons.
5.13 Where the Nominating Committee finds that it is not in the best interest of the Company for the relevant director or executive officer to continue with his current appointment, an announcement should be made on the suspension or cessation of service pursuant to Rule 704(6)(a) and the reason for the suspension or cessation.
5.14 On the other hand, where a relevant conduct has resulted in a private sanction by the relevant authority, such information need not be disclosed as the breach is likely to be of a less serious nature and the relevant authority has deemed it appropriate for the sanction to remain confidential.
Investigation on an issuer
5.15 In the case where the issuer itself is involved in an investigation, the market should similarly be updated in a timely manner. In determining whether the information is material for disclosure, the Board should consider, among others:
(a) whether the information is material to the affairs of the issuer; and
(b) the severity of the potential breach.
5.16 Subject to paragraph 5.15 above, the following events are likely to require immediate disclosure::
(a) it has been contacted by a relevant authority or served with an order for the production of documents to assist in an investigation in relation to a breach of law, rule or regulation; or
(b) it has been informed or becomes aware that any of its subsidiaries or associated companies are under investigation by a relevant authority.
5.17 To give clarity to such events, an announcement made pursuant to paragraph 5.15 above should contain:
(a) the name of the relevant subsidiary or associated company, where applicable;
(b) the relevant fact and details of any other conditions or restrictions imposed by the relevant authority, where applicable;
(c) the alleged offences and identity of the offender whom the authorities was investigating as stated in the order, where applicable; and
(d) the Board’s statement that it will continue to monitor the progress of the investigation and to provide updates on material developments.
6. Content of announcements
Publication of promotional material
6.1 Announcements on SGXNET must be balanced and fair. That is, both the positive and negative aspects of the development or prospects must be disclosed honestly and without bias. Issuers should be cautious not to mislead investors with the presentation or emphasis of certain favourable information, or omission of certain unfavourable key facts.
6.2 In particular, paragraph 27 of Appendix 7A states that issuers should avoid the use of promotional jargon in their announcements. This does not mean that issuers should avoid disclosing developments or presenting forward looking information that are positive in nature. For example, a property development company may announce updates of its key projects attaining certain sales milestones; a technology company may announce the launch of a breakthrough product. Such announcements enable investors to assess the impact of such developments on the issuer's business and future prospects. In this regard, issuers should refer to the specific guidance provided in Appendix 7A, to ensure that their disclosures meet the requirements of being balanced and fair.
6.3 Issuers should also avoid using SGXNET to publish third party research reports that present a favourable valuation of the issuer's shares, with the aim of driving up the share price. The publication of research reports by an issuer could be interpreted as tacit representation that its results will be close to the estimate and will likely be considered by the Exchange as a prospect statement. The report will also be subject to the same requirements as any other announcement from the issuer (for example, it must not mislead investors and must be presented in a balanced and fair manner). In addition, as stated in paragraph 12 of Appendix 7A, estimates or projections should be prepared carefully, be soundly based and should be realistic.
Negative example:
An issuer announced a third party research analyst's projected valuation of the issuer's securities. Upon investigation, the Exchange found that the issuer had omitted key facts from the research report in its announcement. In particular, the issuer only presented the most optimistic scenario of the analyst's valuation in the announcement, without sufficient qualification or explanation. The issuer had failed to highlight the range of possible valuation scenarios and key assumptions for each scenario that had been included in the research report.
The Exchange took the view that the issuer was in breach of the Listing Rule requirements for announcements to be balanced and fair and took disciplinary action against the issuer.
Sufficient information
6.4 Announcements should contain sufficient detail to allow investors to evaluate the relative importance of the announced information to the issuer. When announcing the award of any contract or new business arrangements, for example distributorships, joint ventures and strategic alliances, an issuer must state clearly the financial impact arising from the transaction or, if there is no material impact, provide a statement to that effect. By providing the financial impact on the issuer, investors will be able to put the announcement in perspective.
6.5 The Exchange recognises that there may be some instances where an issuer is prevented from disclosing the financial impact with certainty. One example may be the existence of certain variables that are outside the issuer's control, such as fulfillment of a contract on an ad-hoc basis or poor visibility as to when revenue is generated. Under these circumstances, the issuer should provide an explanation for the non-disclosure and sufficient information to enable investors to independently assess the financial impact taking into consideration the variables disclosed.
6.6 The inclusion of generic or boilerplate statements is of limited use to investors. For example, vague statements such as “the issuer expects to remain profitable” or imprecise terms such as “double digit performance” do not provide useful information to investors as to the possible scale of performance expected. As another example, if a transaction will only be conducted in the next financial year, a statement merely stating that the transaction is not expected to have a material impact for the current financial year will not be meaningful. In this regard, issuers should set out the specific facts or circumstances that has affected or may affect performance, and provide insightful analysis on the impact for investors to make an informed assessment of the issuer's prospects.
7. Other issues
Information from third parties
7.1 Announcements by third parties, such as industry regulators, may be considered material information. If the issuer assesses that there is material impact from these developments, it should make the necessary disclosure, with an assessment of the impact of the event.
7.2 There may be instances where a third party releases information on behalf of, or relevant to, an issuer, for example in the case of a takeover. Where possible, issuers should ensure that the announcement provided by the third parties is made under the issuer's name, so that investors can locate all announcements relating to an issuer when they access SGXNET. Third parties and professional advisers who do not represent the issuer are also encouraged to liaise with the issuer and make necessary arrangements to release any material announcement pertaining to the issuer under the issuer's name.
Publication on the issuer's website
Publication on the issuer's website
7.3 The Exchange does not prohibit issuers from disseminating information through other media such as the Internet. Issuers are reminded that any material information released on the Internet, including posting of information on its own website, should have been previously released via SGXNET, or should be simultaneously released via SGXNET.
Analyst briefings
Analyst briefings
7.4 The Exchange does not prohibit issuers from conducting briefings with analysts and holding meetings with groups of investors and the media. However, such meetings might create a perception that analysts, institutional investors, fund managers or media have access to information that is not generally available to the public and this may undermine investors' confidence in the existence of a level playing field. Hence, an issuer should have in place policies to minimise the risk of being perceived to be practising selective disclosure. Such policies might include pre-release of any prepared information intended for the briefings and meetings, for example slides or speeches, via SGXNET. Alternatively, as such information must not be material, non-public information, it could be released on the issuer's website with an accompanying SGXNET announcement to inform investors that additional information is available on the issuer's website. The second alternative may be preferred if the issuer intends to release large-sized files or provide a webcast of the briefing.
7.5 Where an issuer inadvertently discloses material, non-public information during these briefings or meetings, the issuer must disseminate the information via SGXNET as promptly as possible. An issuer may, if necessary, request a trading halt in its securities.
Response to queries from the Exchange
Response to queries from the Exchange
7.6 The Exchange may suspend the trading of an issuer's securities if an issuer fails to respond to a query issued by the Exchange before the commencement of trading or where there is unusual market activity upon commencement of trading. The issuance of a holding announcement by the issuer stating that the Exchange is querying the issuer is not acceptable, as the investing public would still be trading on an uninformed basis. Issuers may request a trading halt to facilitate the release of announcements.
Amended on 7 February 20207 February 2020 and 1 August 2021.
Practice Note 7B Monitoring and Querying Unusual Trading Activity
Cross-referenced from Rule 703, Appendix 7A and Practice Note 7A
Part I Introduction
1. This Practice Note provides information on the role of the surveillance function ("Surveillance") and the procedures normally employed when an issuer is queried regarding trading in its securities.
2. Surveillance continues to monitor price and volume movements on all Catalist securities, even though an issuer's sponsor is also responsible for having arrangements to monitor trading.
Part II Unusual Trading Activity
3. As set out under paragraph 20 of Appendix 7A, 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.
4. 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.
Part III Role of Surveillance
5. 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.
6. 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.
7. Query by Surveillance
(a) All queries will be posted on SGXNET by the Exchange immediately. The Surveillance officer will make every effort to contact the issuer's authorized representatives to alert the issuer to the Exchange's query.
(b) The query will be emailed to the issuer and its sponsor.
Part IV Response on Receiving a Query on Unusual Trading Activity
8. If the issuer does not have undisclosed material information it must inform its sponsor. The sponsor is responsible for advising it regarding the response it should give to the Exchange.
9. If the issuer has undisclosed material information it must inform its sponsor. The sponsor should advise the issuer on the response it should give to the Exchange's query and where necessary, advise the issuer to request for a trading halt or suspension.
10. 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, orderly and transparent market, issuers and sponsors must, upon receiving a query from the Exchange, immediately undertake an enquiry to ascertain the cause of the unusual trading activity. Issuers and sponsors 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.
11. Paragraph 22 of Appendix 7A sets out some possible causes for unusual trading and how issuers should respond to the queries based on different causes.
12. An issuer may wish to, where appropriate, request for a trading halt or suspension of trading in its securities. If so, the issuer should contact Securities Market Control and provide a SGXNET announcement requesting for a trading halt or suspension, stating the reason for the trading halt or suspension. Where possible, it would be useful for issuers to inform investors when the issuer can respond to the Exchange's query and when the trading halt or suspension of its securities is expected to be lifted.
13. 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.
Part V: Keeping Track of Persons With Access to Material Information
14. Paragraph 13 of Appendix 7A explains that material information, which is otherwise required to be disclosed under Rule 703(1), may be temporarily withheld under Rule 703(3), provided that the strictest confidentiality is maintained.
15. To ensure the confidentiality of the information and as a matter of good corporate governance, where an issuer relies on Rule 703(3) to withhold material information, the issuer must be able to keep track of persons who gained access to the information. These persons may include internal staff or external advisers. The issuer's supervision aids in the control of information flow, as well as assists in investigations in case of information “leaks”.
16. Unusual trading activity observed in an issuer's securities could indicate possible “leaks” of 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.
17. The issuer must have proper procedures in place to provide the privy persons list expeditiously to the Exchange upon request. Such procedures may include the maintenance of the privy persons list from the date the issuer first started withholding information under Rule 703(3).
Part VI Conclusion
18. 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.
19. Issuers should also familiarize themselves with the Exchange's Continuing Obligations, Corporate Disclosure Policy and any other relevant Practice Notes.
20. Issuers should consult their sponsors if they have queries on this matter.
Amended on 3 March 20143 March 2014, 1 December 20151 December 2015 and 15 September 201715 September 2017.
Practice Note 7C Guide for Operating and Financial Review
Cross-referenced from Rule 1204(4)
Part I Introduction
1. This Practice Note publishes the guide provided by the Council on Corporate Disclosure and Governance on the Operating and Financial Review in an annual report.
2. Issuers are encouraged to follow the OFR Guide, but it is not compulsory.
Part II OFR Guide
3. The OFR Guide is enclosed.
Guide for Operating and Financial Review
INTRODUCTION
1. The objective of the Operating and Financial Review ("OFR") in annual reports is to provide users with an understanding of the company by providing an analysis of the company's businesses as seen through the eyes of the directors and management. The OFR serves to facilitate assessment of the company's business and business objectives, its principal drivers of performance, the dynamics of the business, and the performance and financial condition of the company.
2. Companies listed on the Singapore Exchange ("SGX") are currently required to include a discussion of their operating and financial performance and business outlook under the SGX listing rules1. This Guide provides a set of best practice guidance to listed companies in the preparation of the OFR in their annual reports, which will complement and supplement the financial statements.
3. The approach taken in this Guide is to set out general guidance, in the form of Principles and Guidelines, on the OFR, rather than to prescribe a set of mandatory rules or requirements. Adherence with the Guide is voluntary. The Principles set out in the Guide should be regarded as fundamental to the preparation of a good OFR. The Guidelines elaborate on how those principles can be applied.
4. Listed companies are encouraged to apply these best practices for disclosure of information in their OFRs. It is recognised that not all items in the guidelines may be relevant to all companies, as companies vary by size, industry group and other factors. The guidance should also not be regarded as a comprehensive list of the matters that might be considered by the directors and management to be relevant to an assessment of the company. The OFR should focus on those matters that are considered significant to that company as a whole. It is for the directors and management to decide how best to apply the framework of this Guide to the particular circumstances of the company.
OBJECTIVES AND TENETS OF THE OPERATING AND FINANCIAL REVIEW
1. The objective of the OFR is to provide users with a good understanding of the company by providing a historical and prospective analysis of the company's businesses as seen through the eyes of the directors and management. The OFR should assist the user's assessment of its performance and understanding of the future direction of the company. The OFR should focus on matters of significance to the company as a whole.
2. The focus of the OFR is on explanations and analysis. It should contain analytical description, rather than replicate information in the financial statements. It should discuss and interpret the performance and financial condition of the company, in the context of opportunities and risks impacting the operations of the company and known or reasonably expected changes in the environment in which it operates. The OFR should discuss known trends and factors relevant to forming a view as to likely future performance. An explanation of the trends and uncertainties known to be facing the company would not require a forecast of the outcome of such uncertainties. Rather, the explanation should be sufficient to permit readers of the financial report to form their own judgements of the outcomes of such uncertainties.
3. The benefits of particular disclosures should be balanced against any potential commercial risks to the company from the disclosure of commercially sensitive information. This Guide does not expect that disclosure be made by listed companies of information of a commercially prejudicial or sensitive nature that a reasonable person would not expect to be disclosed, for example where:—
(a) the information concerns a trade secret;
(b) the information concerns an incomplete proposal or negotiation; or
(c) information comprises matters of supposition and is insufficiently definite to warrant disclosure.
4 Information and analysis contained in the OFR should, as far as possible, be neutral and free from bias, dealing even-handedly with both good and bad aspects. The directors and management should ensure that material information is not omitted. Where the information in the OFR relates to financial information, it should be consistent with information in the audited financial statements. This should not be taken to mean that an audit of the OFR is required.
PRINCIPLES AND GUIDELINES
(A) Presentation of the OFR
Principle 1
Principle 1
1 The OFR should focus on matters that are relevant to investors. It should be easy for users of financial reports to understand.
Guidelines
Guidelines
1.1 The OFR should be written in a style that is clear and readily understood. It should avoid the use of technical language as far as possible. Figures and graphics may be useful to assist understanding of discussions in the OFR.
1.2 To facilitate reference to OFR disclosures by users of the annual report, it could be useful to include the key discussions of the OFR in a distinct, stand-alone section of the annual report. However, companies may decide that, in the context of the format of their annual report, it would be preferable to incorporate some of the discussion within other sections of the annual report, such as the Chairman's statement or the Chief Executive Officer's statement.
1.3 While the approach adopted for the presentation of the OFR may evolve over time, or differ from that adopted by other companies, disclosure should be sufficient for the user to be able to compare the information presented in the OFR of the company with that in previous periods, and with information about other companies in the same industry or sectors, where practical.
(B) Company Overview, Objectives and Strategy
Principle 2
Principle 2
2 The OFR should describe the nature of the company, its objectives and broad strategies, and explain the main areas of operation of the company's business, as context for the discussion and analysis of performance and financial position. The discussion in the OFR should cover the group business of the listed company, including its principal subsidiaries.
Guidelines
Guidelines
2.1 The OFR should discuss the objectives for the business and broadly, management's strategy for achieving them. Objectives may be defined in terms of financial performance. Non-financial objectives may also be discussed, where relevant.
2.2 Depending on the nature of the business, discussion of the company's business and operations might cover areas such as:—
• the industries, locations and markets in which the company operates;
• its main products and services, business processes and distribution methods, and intellectual property;
• the structure of the company and main operating facilities; and
• any significant changes to the legal, social, political and regulatory environments that influence the company.
Principle 3
3 The key financial and non-financial performance indicators used by management to assess the company and its performance should be discussed.
Guidelines
Guidelines
3.1 The OFR would normally include a range of financial and non-financial measures used to measure the company's performance. Comparability would be enhanced if the measures disclosed are accepted and widely used within the industry sector or more generally. Where practical, performance indicators should be compared with previous periods to outline trends.
3.2 The measures used should be defined, and the basis for calculation explained. Comparative amounts should be disclosed. Material changes in the financial measures disclosed, including significant changes in the underlying accounting policies applied, should be identified and explained. Comparative amounts should be restated on the new basis, where practical.
(C) Operating Review
Principle 4
Principle 4
4 The OFR should discuss the significant features of performance for the period covered by the financial report, focusing on the overall company as well as those business or geographic segments that are relevant to an understanding of the performance as a whole.
Guidelines
Guidelines
4.1 The OFR should identify and explain the main factors that affect the activities and performance of the company, and in particular discuss those that either have varied in the past or are expected to change in the future. Discussion of past performance should be supplemented by known trends and factors that are likely to affect future performance.
4.2 Key components of the result of operations should be discussed, including major sources of revenues, where appropriate. The OFR should also discuss any significant changes in capital employed. The OFR should discuss the results in comparison with prior periods and any projections publicly disclosed by the company.
4.3 The OFR should set out the analysis of any significant effect on performance of changes in the industry or the environment in which the company operates and of developments within the company, for example:—
• changes in market conditions;
• the introduction or announcement of new products and services;
• new activities, discontinued activities and other acquisitions and disposals;
• asset impairments; and
• results of any material acquisition, and extent to which published expectations at the time of acquisition have been realised.
4.4 The analysis should cover any other special factors that have affected performance in the period under review, even where the effect cannot be quantified. Where unusual or infrequent events or transactions have affected the result for a period, the OFR should discuss their nature and impact on the company. The discussion should comment on the impact on future operations of significant post-balance sheet events. The OFR should enable users to assess the significance of the ongoing and core activities of the company and the sustainability of performance relating to those activities.
Principle 5
5 The OFR should discuss the dynamics and risk factors of the business. Guidelines
5.1 This should include a discussion identifying the significant opportunities, risks and threats facing the business, together with a commentary on the strategies and processes applied to managing them, and in qualitative terms, the nature of their potential impact on performance. Known factors and influences that may have a material effect on future performance and financial position, particularly within the 12 months from the date when the financial statements are authorised for issue, should be discussed.
5.2 A commentary on the strengths and resources of the business that should assist the company in the pursuit of its objectives would be useful. This could include items that are not reflected in the balance sheet, e.g corporate reputation and brand equity, licences, patents, copyrights and trademarks, and research and development.
Principle 6
6 The OFR should comment on investments and measures to maintain and enhance the position and profitability of the company.
Guidelines
Guidelines
6.1 The nature of activities and expenditure by the company to maintain and enhance the position and profitability of the company should be discussed. It could include description of major projects that involve capital expenditure being undertaken by the company. Qualitative information as to the benefits expected from such activities and expenditure could be given.
(D) Financial Review
Principle 7
Principle 7
7 The OFR should identify and explain significant matters which affect the company's financial condition. It should discuss the capital structure and capital management policies of the company, its treasury policy, the dynamics of the company's financial position and its funding and liquidity position.
Guidelines
Guidelines
7.1 The OFR should contain a discussion of the capital structure of the company, including the maturity profile of its debt, type of financial instruments used and currency and interest rate exposures. This could include comments on the company's debt rating and relevant ratios such as interest cover and debt/equity ratios. The purpose and effect of major financing transactions undertaken up to the date the financial statements are authorised for issue should be explained.
7.2 The discussion should cover the capital funding and treasury policies and objectives that are significant to the company's performance. The types of items that might be discussed include:—
• the currencies in which borrowings are made and in which cash and cash equivalents are held;
• maturity profile of borrowings and extent of fixed-rate borrowings;
• mix between equity and debt financing;
• significant investments held;
• risk management policies;
• hedging policies and the use of financial instruments for hedging;
• use of special purpose entities and other off-balance sheet arrangements; and
• capital management, including share buy-backs and capital restructuring.
7.3 To assist understanding of the cash flow and liquidity position of the company, the cash generated from operations, and other cash flows during the period under review should be discussed. The OFR should comment on any special factors that influenced cash flows in the current period and any known factors that may have a significant effect on future cash flows.
7.4 The company's liquidity and funding at the end of the period under review should be discussed. Discussion of significant funding requirements for capital expenditure and servicing of borrowings would be useful. The OFR could also comment on the level of borrowings, the seasonality of borrowing requirements, undrawn financing facilities and the maturity profile of both borrowings and undrawn committed borrowing facilities.
7.5 Where the company has entered into covenants with lenders which could have the effect of restricting the use of credit facilities and a material breach of a covenant has occurred or is expected to occur, the measures taken or proposed to remedy the situation should be disclosed.
7.6 To facilitate the user's understanding of the financial statements, it would be useful for the OFR to identify and discuss the critical accounting policies, estimates and judgements made that are key to the interpretation of the company's financial statements. Such information would be particularly relevant for areas where subjective judgements are involved or for companies with complex financial structures.
Principle 8
8 The OFR should discuss the overall return attributable to shareholders, including distributions and share repurchases.
Guidelines
Guidelines
8.1 All forms of shareholder returns, including share buy-backs, dividend distribution, other forms of return of capital and shareholder plans should be discussed and their effects should be explained. The OFR should also include a commentary on the various factors (including profitability) contributing to the dividend for the financial year, including the overall dividend policy.
1 Rule 1204(4).
Practice Note 7D Corporate Actions Requiring the Engagement of a Sponsor
Cross-referenced from Rule 746(3) and definition of "corporate finance advisory work"
Added on 30 March 200930 March 2009.
Part I Introduction
1. This Practice Note provides guidance on when the engagement of a sponsor would be required pursuant to Rule 746(3).
2. Issuers should consult with their sponsors with respect to the application of the rules. When in doubt, sponsors must consult the Exchange.
3. Rule 746(3) states that where an issuer requires a professional to provide corporate finance advice in relation to any corporate action, it may engage its sponsor or any other sponsor authorised by the Exchange to provide such advice. Arising from this Rule, a sponsor is generally required for the provision of corporate finance advice, having regard to their obligations to advise the issuer on compliance with Catalist Rules.
4. A sponsor is however not required in situations where the Rules to be complied with are procedural in nature and thus expected to pose less regulatory risks. Non-sponsor professionals providing corporate finance advice in such situations should nevertheless have an established track record of discharging their responsibilities properly in similar roles.
Part II Corporate Actions that Require a Sponsor
5. For the purpose of complying with Rule 746(3), an issuer is required to engage a sponsor to provide corporate finance advice in relation to the following corporate actions or transactions:—
a. transfer of listing to SGX Main Board pursuant to Rule 408;
b. issue of securities, including rights issue or placement of shares; company warrants; or other convertible securities, for cash or as consideration for an acquisition notwithstanding that the acquisition is not a Major Transaction, except where the issue of securities falls under paragraph 6(c) below;
c. issue of shares or convertible securities or options by a principal subsidiary pursuant to Rule 805(2);
d. approval of a share option scheme or share scheme pursuant to Rule 842(3) where the terms of the scheme may be prejudicial to the interest of shareholders;
e. capital reduction or distribution;
f. approval of a scrip dividend scheme where the terms of the scheme may be prejudicial to shareholders;
g. Interested Person Transaction ("IPT") requiring specific shareholders' approval pursuant to Chapter 9 of the Catalist Rules, including the provision of independent financial advice;
h. Major Transaction under Rule 1014 ("Major Transaction");
i. Very Substantial Acquisition or Reverse Takeover under Rule 1015, in which case a Full Sponsor is required;
j. independent financial advice in relation to a whitewash resolution or an issuer which is the subject of a takeover, as required pursuant to the Singapore Code of Takeovers and Mergers;
k. Scheme of Arrangement; and
6. An issuer is not required to engage a sponsor for corporate finance advice in relation to the following corporate action or transactions:—
a. approval or renewal of a General Share Issue Mandate pursuant to Rule 806;
b. approval or renewal of a Share Buy-Back Mandate pursuant to Rule 866;
c. issue of securities pursuant to an employee or performance share/share option plan, bonus issue, scrip dividend, or stock/share split or consolidation;
d. approval or renewal of a share or share option scheme, except where the scheme falls under paragraph 5(d) above;
e. approval of a scrip dividend scheme, except where the scheme falls under paragraph 5(f) above;
f. approval or renewal of an IPT Mandate pursuant to Chapter 9 of the Catalist Rules, including the provision of independent financial advice; and
g. alteration of its memorandum or articles of association.
7. The corporate actions or transactions which are set out in this Practice Note are not exhaustive. Where a particular corporate action or transaction being contemplated by an issuer does not fall within paragraphs 5 or 6 above, the issuer must consult with its sponsor. When in doubt, sponsors must consult the Exchange.
Part III Engagement of Financial Advisors by Issuers and Sponsors
8. Rule 746(3) allows an issuer to engage its sponsor or any other sponsor authorised by the Exchange to provide corporate finance advice. Where another sponsor is appointed, the continuing sponsor of the issuer shall retain overall management and responsibility for the corporate action or transaction, principally with regards to advising the issuer on compliance with Catalist Rules and the proper discharge of the sponsor's obligations pursuant to Rule 226(4).
9. Where a sponsor is engaged to provide corporate finance advice, such sponsor may choose to outsource part of its work to other financial advisors, which need not also be a sponsor. The continuing sponsor of the issuer shall retain overall management and responsibility for the corporate action or transaction including the work done by such outsourced advisor(s).
10. While such outsourced advisors may be named in documents, announcements and circulars as appropriate for the roles in which they performed for the corporate action or transaction, for avoidance of doubt, such document, announcement or circular should also state clearly that the continuing sponsor of the issuer retains overall responsibility for the corporate action or transaction.
Practice Note 7E General Meetings
| Details | Cross References |
| Issue date: 31 July 2013 19 April 2023 Effective date: 1 January 2014 1 July 2023 | Listing Rule 704(15) Listing Rule 730A |
1. Introduction
1.1 This Practice Note provides guidance on the conduct of general meetings for issuers listed on the Exchange.
2. Location and format of general meeting
2.1 Unless prohibited by relevant laws and regulations in the jurisdiction of its incorporation, an issuer shall hold its general meeting either:
(a) at a physical place in Singapore; or
(b) at a physical place in Singapore and using technology that allows a person to participate in a meeting without being physically present at the place of meeting (“virtual meeting technology”).
2.2 General meetings are important avenues for shareholders to voice their opinion and seek clarifications from the Board and management on matters relating to an issuer. At these meetings, shareholders are given the opportunity to meet with the management team, the external auditors and key members of the Board, such as the Chairman, the Audit Committee Chairman and the independent directors. This enhances the quality of communication between the issuer and its shareholders.
2.3 Shareholders have the right to participate fully in general meetings, regardless of the format of the meeting. These rights include the right to attend, ask questions, communicate their views, and to appoint proxies or to vote at general meetings. In deciding on the format of the general meeting, issuers should have regard to the size and needs of their shareholder base and how best to facilitate shareholder engagement. For the purpose of this Practice Note, references to “shareholders” include references to duly appointed proxies.
2.4 Issuers may be required by the laws and regulations of their country of incorporation to hold general meetings within their jurisdictions and in accordance with their constitutions. Such issuers will be required to demonstrate to the Exchange the restrictions in their jurisdictions that prohibit general meetings from being held at a physical place outside their country of incorporation. They must nonetheless allow shareholders in Singapore to participate using virtual meeting technology, unless the issuers demonstrate to the Exchange the restrictions in their jurisdictions or constitutions that prohibit such shareholders from participating using virtual meeting technology.
2.5 Issuers who hold general meetings outside Singapore without allowing shareholders in Singapore to participate using virtual meeting technology should hold information meetings for the shareholders at a physical place in Singapore. These provide an avenue for the shareholders in Singapore to interact directly with the Board and management of the issuers as they would at the general meetings.
2.6 The Exchange recognises that there could be other circumstances which call for an issuer to hold its general meetings outside Singapore, such as to reach a larger public shareholder base, if most of its shareholders are based outside Singapore. The Exchange is prepared to consider these circumstances on a case-by-case basis. Issuers should consult the Exchange on the applicability of Listing Rule 730A(1) in the event of any doubt.
2.7 An issuer is required to disclose the circumstances under which its general meetings are convened outside Singapore in the following:—
(a) offer document, shareholder circular or relevant document if the arrangement to hold the general meetings outside Singapore is known at the time of listing; and
(b) SGXNET announcement when the arrangement to hold the general meetings outside Singapore is approved by the Exchange after listing.
2.8 General meetings held at a physical place and using virtual meeting technology must in respect of shareholders participating using virtual meeting technology:
(a) have processes for the share registrar to verify and authenticate the identities of shareholders attending meetings using virtual meeting technology;
(b) provide real-time remote electronic voting;
(c) provide real-time electronic communication to enable shareholders to follow the proceedings and enable questions to be raised and answered; and
(d) be at no cost to shareholders.
3. Notice of meeting and dissemination of documents
3.1 All notices of general meeting of issuers and documents relating to the business of the general meeting must be disseminated in accordance with Chapter 12 of the Listing Rules.
3.2 All notices convening general meetings must be sent to shareholders at least 14 calendar days (or 21 calendar days, where special resolutions are proposed) before the meeting. In each case, the notice period excludes the date of the notice and the date of the meeting. Issuers are strongly encouraged to provide at least 21 calendar days’ notice to shareholders.
3.3 All notices of general meetings (including notices for adjourned or postponed meetings) must contain the following:
(a) the date and time of commencement of the meeting;
(b) the resolutions to be proposed;
(c) details on the physical place of the meeting;
(d) if a meeting is held at a physical place and using virtual meeting technology, the arrangements for shareholders to participate in the meeting using virtual meeting technology and how real-time remote electronic voting and real-time electronic communication will be conducted; and
(e) instructions to shareholders on how they may:
(i) access any documents or information relating to the business of the meeting;
(ii) submit their questions ahead of the meeting (e.g. via email) or raise questions at the meeting (e.g. via videoconferencing), the timeframe for submission of questions in advance and how the substantial and relevant questions will be responded to prior to, or at, the meeting; and
(iii) cast their votes, including specific instructions to CPF and SRS investors, if applicable.
4. Written questions
4.1 As a general principle, shareholders must be given the opportunity to ask written questions within a reasonable time prior to general meetings.
4.2 As a guideline, after the publication of the notice of general meeting, shareholders should be allowed at least 7 calendar days to submit their written questions. This is to accord shareholders with reasonable time to consider the matters to be tabled at the general meeting and submit their written questions.
4.3 Issuers should encourage shareholders to submit their written questions promptly for these to be addressed. Shareholders should be informed of any cut-off time within which written questions must be submitted and when their written questions would be responded to. If written questions or follow-up written questions are submitted after the cut-off time, issuers should also seek to respond to these questions within a reasonable timeframe.
4.4 Issuers may respond to written questions prior to the general meeting through publication on SGXNET and, if available, the issuer’s corporate website. Alternatively, issuers may respond to written questions at the general meeting. Issuers are strongly encouraged, as far as possible, to respond to substantial and relevant comments or queries promptly, and at least 48 hours prior to the closing date and time for the lodgment of proxy forms, to facilitate shareholders’ votes. The Board or management must respond to all substantial and relevant comments or queries.
5. Voting
5.1 An issuer should encourage its shareholders to vote at its general meetings in person. If shareholders are unable to vote in person, they should be allowed to appoint proxies to represent them.
5.2 Issuers may allow real-time remote electronic voting through an electronic voting system to take place at the general meeting, such that shareholders may vote remotely by electronic means. The issuer must ensure that it has implemented the necessary safeguards to validate votes submitted by shareholders, including the following:
(a) the electronic voting system that is used accurately counts all votes cast at the meeting;
(b) the electronic voting system that is used is capable of providing an audit trail of records on the operation of the electronic voting system, including the accuracy of the recording and counting of votes;
(c) each vote that is cast is verified by the issuer as cast by shareholders entitled to vote; and
(d) the chairman of the meeting must, during the meeting, declare the result of any matter put to a vote at the meeting.
5.3 Proxy forms must be designed clearly to allow a shareholder appointing a proxy to indicate how the shareholder would like the proxy to vote in relation to each resolution. Shareholders may choose to appoint the chairman of the meeting as his or her proxy.
5.4 If a shareholder submits a proxy form and subsequently attends the meeting in person and votes, the appointment of the proxy should be revoked. There must be sufficient systems or processes in place at the meeting to identify and cancel the appointment of the proxy at the point when the shareholder attends the meeting.
6. Minutes
6.1 Issuers must publish minutes within one month after the general meeting on SGXNET and, if available, the issuer’s corporate website.
6.2 The minutes should record substantial and relevant comments or queries from shareholders relating to the agenda of the general meeting, and responses from the Board or management.
Added on 1 January 20141 January 2014 and amended on 1 July 2023.
Practice Note 7F Sustainability Reporting Guide
Cross-referenced from Rules 711A and 711B
- Introduction
- Listing Rule 711A requires every issuer to prepare an annual sustainability report, which must describe the issuer's sustainability practices with reference to the primary components set out in Listing Rule 711B on a 'comply or explain' basis (other than as required under Listing Rule 711B(2)). This Practice Note contains the Sustainability Reporting Guide (the "Guide"), which provides guidance on the expected structure and contents and the preparation of the sustainability report.
- Sustainability reporting disclosure does not detract from the issuer's obligation to disclose any information that is necessary to avoid the establishment of a false market in the issuer's securities or would be likely to materially affect the price or value of its securities pursuant to Listing Rule 703.
- A glossary of the common terms used in the Guide is set out in paragraph 8 of this Guide.
- Policy Statement on Sustainability Reporting
- Issuers make regular financial reports to their investors that are used for assessment of the likelihood of repayment and the returns on investment.
- The addition of sustainability reporting to financial reporting provides a more comprehensive picture of the issuer: statements of financial position and comprehensive income provide a snapshot of the present and an account of the past year, while sustainability reports of environmental, social and governance (“ESG”) factors show the risks and opportunities within sight, managed for future returns. Taken together, the combined financial and sustainability reports enable a better assessment of the issuer's financial prospects, the sustainability of the current business into the future and quality of management.
- To achieve the additional transparency which encourages efficiency and innovation, SGX-ST requires each issuer to publish an annual sustainability report. This Guide provides guidance to the issuer on compliance with the requirements under the Listing Rules.
- Principles
Board responsibilityThe Code states as its preamble that sustainability, together with accountability and transparency, is a tenet of good governance. It provides that the Board is collectively responsible for the long-term success of the issuer, and the Board's role includes setting strategic objectives which should include appropriate focus on sustainability. The Board has ultimate responsibility for the issuer's sustainability reporting. Consistent with its role, the Board should determine the ESG factors identified as material to the business and see to it that they are monitored and managed. Management has responsibility to ensure that the ESG factors are monitored on an ongoing basis and properly managed. The Board's close interaction with management will enable the Board to satisfy itself on the way sustainability governance is structured and functioning through the various levels of management. If any question is raised regarding the issuer's sustainability reporting, the Board and management should make sure it is addressed.
'Comply or explain'
- Each issuer is required to prepare an annual sustainability report. The sustainability report must include the primary components as set out in Listing Rule 711B on a 'comply or explain' basis (other than as required under Listing Rule 711B(2)). Where the issuer cannot report on any primary component, the issuer must state so and explain what it does instead and the reasons for doing so. As set out in Listing Rule 711B(2), an issuer must not exclude the primary component in Listing Rule 711B(1)(aa).
Report risks as well as opportunities
- In identifying material ESG factors, the issuer should consider both risks and opportunities. In addition, it is conceptually sound, and validated by experience, that risks well-managed represent strengths which can be applied to fulfill opportunities. The risks and opportunities within sight have direct bearing on strategies and operations and should be reported for clearer understanding of the issuer's performance, prospects and management quality. To facilitate understanding, issuers should give the whole explanation in a concise manner.
Balanced reporting
- In reporting on sustainability, care should be taken to give a neutral and accurate view. There may be a tendency to give more prominence to what is favourable and understate what is negative. Both situations require comprehensive explanations. In reporting performance, factors beyond the issuer's control are as relevant to exceeding the target as to a performance shortfall. In the event of underperformance, the issuer's response is also important and should be included to bring about confidence in its longer term sustainability objectives.
Stakeholder engagement
- The issuer's responsibility on disclosure, including annual reports and sustainability reports, is first and foremost to current and potential shareholders, i.e. the investing public. Interaction of the issuer with its other stakeholders is also of interest to investors for its relevance to sustainability across the value chain of the issuer. The views of stakeholders also contribute to inform the issuer's identification of material ESG factors. On a continuing basis, regular and sustained engagement with stakeholders provides the issuer with an up-to-date picture of its sustainability within both its business and physical environments. The material outcomes of such engagement should be included in the sustainability report.
- Contents of Sustainability Reporting
Primary componentsThe sustainability report should comprise the following primary components:
- Material ESG factors. The sustainability report should identify the material ESG factors, and describe both the reasons for and the process of selection, taking into consideration their relevance or impact to the business, strategy, financial planning, business model and key stakeholders.
- Climate-related disclosures. The sustainability report should contain disclosures related to climate-related risks and opportunities.
- Policies, practices and performance. The sustainability report should set out the issuer's policies, practices and performance in relation to the material ESG factors identified, providing descriptive and quantitative information on each of the identified material ESG factors for the reporting period. Performance should be described in the context of previously disclosed targets.
- Targets. The sustainability report should set out the issuer's targets for the forthcoming year in relation to each material ESG factor identified. Targets should be considered for defined short, medium and long term horizons, and if not consistent with those used for strategic planning and financial reporting, the reasons for the inconsistency should be disclosed.
- Sustainability reporting framework. The issuer should select a sustainability reporting framework (or frameworks) to guide its reporting and disclosure. For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. The sustainability reporting framework(s) selected should be appropriate for and suited to its industry and business model. The issuer should state the name of the framework(s), explain its reasons for choosing the framework(s) and provide a general description of the extent of the issuer's application of the framework(s). Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
- Board statement. The sustainability report should contain a statement of the Board that it has considered sustainability issues in the issuer’s business and strategy, determined the material ESG factors and overseen the management and monitoring of the material ESG factors. In addition, the sustainability report should describe the roles of the Board and the management in the governance of sustainability issues.
Identification of material ESG factors
- The issuer should review its business in the context of the value chain and determine what ESG factors in relation to its interaction with its physical environment and social community and its governance, are material for the continuity of its business. The issuer is expected to report the criteria and process by which it has made its selection with reference to how these factors contribute to the creation of value for the issuer.
- In broad terms, environmental factors would include materials, energy, biodiversity, water, greenhouse gas (“GHG”) emissions, effluents and waste as well as environmental complaint mechanisms. Social factors would include health and safety, employment practices and labour rights such as collective bargaining, product responsibility, anti-corruption, supplier assessments and impact of direct and supply chain activities on local communities. The framework chosen is likely to have additional factors that the issuer would report on.
- Corruption is a factor on which many investors require reassurance, whether inducement is being offered to employees or by employees to others. Where corruption has been addressed in the Corporate Governance report, the issuer may refer to that report. If corruption is not assessed to be a material ESG factor by the issuer, where stakeholders express sufficient interest in the information, the issuer is advised to state its policy and safeguards on its website.
- Gender, skills and experience have been highlighted as diversity indicators material to business sustainability. Diversity greatly enhances the issuer's capacity for breadth of input and perspectives into decision making, risk alertness and responsiveness to change. The issuer should be aware of this trend and assess whether diversity is a material social factor in its business. It should engage stakeholders in assessing the necessity of reporting on this matter. In satisfying investors and other stakeholders, diversity should be examined through broad levels of staff and also importantly, in the Board. Where other sections of the annual report sufficiently address stakeholders’ interest in diversity, the issuer may refer to those sections.
The issuer should consider not just its internal circle of operations but also widen that circle to include persons and processes in the value chain that contribute to the issuer's product or service. Parts of the business outsourced to third parties (for example, freight and logistics), as well as downstream processes (for example, product defect response), constitute an integral part of the issuer's business and need to be included in the sustainability report.
Climate-related disclosures
- Climate change threatens to disrupt businesses in a precipitous and potentially devastating manner, with consequential detrimental effects on their stakeholders and providers of capital. Conversely, it also opens up new markets for solutions that respond to the threat. Investors need to properly understand the climate-related risks and opportunities of their portfolio in order to price or value their investments.
- Securities markets promote the ready availability of decision-useful information so that it may be reflected in the price discovery process. In doing so, exchanges facilitate the allocation of capital to its most efficient use and the transfer of risks to those most willing to bear them.
- The IFRS Sustainability Disclosure Standards build on the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”). It aims to be a comprehensive global framework of sustainability-related financial disclosures to meet the needs of capital markets and to serve the demand for more consistent, comparable and verifiable information about the exposure to, and management of, sustainability-related risks and opportunities. The IFRS Sustainability Disclosure Standards were developed to support a global framework of investor-focused disclosures on sustainability-related financial information and have received widespread support globally, including from the G20 and the Financial Stability Board. The International Organization of Securities Commissions has also endorsed the IFRS Sustainability Disclosure Standards in July 2023.
Structure of the IFRS Sustainability Disclosure Standards and baseline requirement
- The core content of the IFRS Sustainability Disclosure Standards is structured in alignment with the four pillars of the TCFD recommendations: governance, strategy, risk management, and metrics and targets. Climate-related risks are associated with both physical risks (such as those arising from weather-related events like storms, floods or heatwaves and longer-term shifts in climatic patterns like sea level rise) and transition risks (arising from efforts to transition to a lower-carbon economy and may include policy, technological and reputational risks).
- IFRS S1 sets out the general requirements for disclosure of sustainability-related financial information including the conceptual foundations, core content, general requirements and judgements, uncertainties and errors. IFRS S2 sets out supplementary requirements that relate specifically to climate-related risks and opportunities.
- The baseline requirement for issuers under the Listing Rules in respect of the disclosure of the primary component in Listing Rule 711B(1)(aa) is to disclose information on climate-related risks and opportunities that apply all the requirements in IFRS S2 (other than the disclosure of Scope 3 GHG emissions as set out in paragraph 4.23 of this Guide), and consequently apply the climate-relevant provisions in IFRS S1.
- Therefore, in applying IFRS S1 for climate-related disclosures, an issuer should particularly refer to the conceptual foundations, general requirements, judgements and uncertainties and errors specified therein. Key concepts such as connected information, value chains, assessment of materiality and key requirements such as the reporting entity and timing and location of reporting are set out in IFRS S1. For example, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports.
- IFRS S1 requires entities that report their sustainability-related financial disclosures in accordance with the IFRS Sustainability Disclosure Standards to make an explicit and unreserved statement of compliance, which may not be made unless an entity complies with all the requirements, including the requirements in IFRS S1 applicable beyond climate-related disclosures. In this regard, issuers will not be required to make such a statement of compliance. SGX RegCo permits and encourages issuers of any size to use and fully apply the IFRS Sustainability Disclosure Standards. An issuer that complies with all the requirements in IFRS S1 and IFRS S2 can, but is not mandated to, make an explicit and unreserved statement of compliance with the IFRS Sustainability Disclosure Standards; an issuer that complies with all the requirements in IFRS S2 and the climate-relevant provisions in IFRS S1 can, but is not mandated to, state that it complies with the climate-related requirements in the IFRS Sustainability Disclosure Standards.
- In the core content of IFRS S1, there are also specific paragraphs which will be relevant for the issuer including the elaboration of short-, medium- and long-term time horizons, trade-offs between sustainability-related risks and opportunities that an issuer considered and the objective of sustainability-related financial disclosures on risk management to enable users of general purpose financial report to assess an issuer’s overall risk profile and its overall risk management process.
ISSB guidance
- The ISSB has issued application guidance, which forms an integral part of the IFRS Sustainability Disclosure Standards, on, among others, the following topics:
- identifying sustainability-related risks and opportunities and disclosing material information about such risks and opportunities;
- applying scenario analysis to assess climate resilience;
- measuring GHG emissions, including Scope 3 GHG emissions;
- disclosing information relevant to the cross-industry metric categories; and
- disclosing information about the climate-related targets that have been set or are required to be met by law or regulation.
- In addition, the ISSB has also issued accompanying guidance containing illustrative guidance and illustrative examples to support companies in applying the IFRS Sustainability Disclosure Standards on, among others, the following topics:
- guidance on metrics that could be disclosed as part of information relevant to the cross-industry metric categories;
- examples of disclosing GHG emissions applying the principles in IFRS S1 for aggregation and disaggregation; and
- industry-based guidance on identifying appropriate disclosures about climate-related risks and opportunities that are associated with common business models and activities in a particular industry.
Reliefs
- The ISSB has sought to achieve a balance between the costs for companies in applying the requirements and ensuring investors are provided with consistent, comparable and verifiable information. It introduced a package of (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards.
- As part of the (permanent) structural reliefs, an issuer is allowed to:
- consider its skills, capabilities and resources when determining its approach:
- for its climate-related scenario analysis; and
- in preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity; and
- use all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort in:
- identifying climate-related risks and opportunities;
- preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity;
- determining its approach, and selecting the inputs, for its climate-related scenario analysis;
- determining the scope of the value chain;
- calculation of amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities; and
- measuring Scope 3 GHG emissions.
- consider its skills, capabilities and resources when determining its approach:
- As part of the (temporary) transition reliefs, an issuer (including newly-listed issuers) need not do the following in the first year of reporting applying the IFRS Sustainability Disclosure Standards:
- provide its Scope 3 GHG emissions;
- use the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004) if it was previously using a different method; and
- provide comparative information in respect of the preceding period.
Scope 3 GHG emissions
- IFRS S2 requires disclosure of Scope 3 GHG emissions, and the approach used to measure such GHG emissions. Emissions must be measured in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004), subject to the reliefs specified and to the extent that it does not conflict with the IFRS Sustainability Disclosure Standards. An issuer should consider the 15 categories of Scope 3 GHG emissions, as described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) (“Scope 3 Standard”), to identify which categories are applicable to the issuer. The issuer might determine that not all categories are applicable to it and therefore disclose which of these categories are included in its Scope 3 GHG emissions. For example, an issuer may not have leased assets or franchises or may be unable to estimate Scope 3 GHG emissions due to a lack of data or other limiting factors, as described in the Scope 3 Standard.
- The ISSB has also developed a Scope 3 measurement framework to provide additional guidance about measuring Scope 3 GHG emissions. While direct measurement and primary data is preferred, an issuer may still estimate Scope 3 GHG emissions based on assumptions and appropriate inputs and use secondary data under such framework. Primary data includes data provided by suppliers or other entities in the value chain from specific activities within an entity’s value chain, while secondary data is not directly obtained. Secondary data is typically supplied by third-party providers and includes industry-average data.
- Recognising that the measurement and reporting methodologies of Scope 3 GHG emissions are still evolving, SGX RegCo will carry out an in-depth review of issuers' experience and readiness in reporting Scope 3 GHG emissions before setting out the implementation roadmap for disclosures of Scope 3 GHG emissions. In the implementation roadmap, larger issuers (e.g. issuers above a certain market capitalisation) will likely be prioritised for reporting. The intention is for larger issuers by market capitalisation to report Scope 3 GHG emissions from the financial year commencing on or after 1 January 2026. Ample notice will be given to issuers before reporting requirements come into effect. Issuers that are already reporting their Scope 3 GHG emissions are encouraged to continue to do so. Issuers that have not yet reported on Scope 3 GHG emissions are encouraged to build up their capabilities in the interim period.
Scenario analysis
- IFRS S2 requires use of climate-related scenario analysis to inform an issuer’s disclosures about their resilience to climate change. IFRS S2 contains application guidance on how an issuer is required to determine the method of scenario analysis to assess its climate resilience. To reduce the risks and impacts of climate change, almost all countries have agreed to take action in limiting global warming to well below 2°C above pre-industrial levels, while pursuing efforts to arrest the increase to 1.5°C above pre-industrial levels. The issuer should describe how resilient its strategies are to climate-related risks and opportunities, taking into consideration a transition to a lower-carbon economy consistent with a 2°C or lower scenario and, where relevant, scenarios consistent with increased physical climate-related risks.
- An issuer new to scenario analysis can consider starting with qualitative scenario narratives to explore the potential range of implications. As it gains more experience, it can consider using quantitative information to describe the potential outcomes, and to enhance the rigour of that analysis.
- The Sustainable Stock Exchanges initiative has also developed a checklist in its model guidance on climate disclosure (“SSE Model Guidance on Climate Disclosure”). The SSE Model Guidance on Climate Disclosure sets out a simplified three stage process to the conduct of scenario analysis. First, the issuer should identify appropriate scenarios that align with its underlying assumptions and the key risks and opportunities of its sector or industry, and clearly explain the scenarios used. Second, the issuer may set boundaries of its scenario analysis with sufficient disclosure of the reasons for exclusion and inclusion. A smaller issuer may feel that an analysis of the direct operations sufficiently covers the climate-related risks and opportunities within each scenario, while a larger issuer and those in the financial sector should expand their analysis beyond their direct operations to include indirect GHG emissions (i.e. Scope 3 GHG emissions). Third, an issuer should evaluate its physical and transitional risks within the scenarios chosen. Mapping the severity and likelihood of the risks enables the issuer to develop a strategic plan for future scenarios. Additional guidance on scenario analysis as required by IFRS S2 has also been provided in the model guidance on sustainability-related financial disclosures issued by the Sustainable Stock Exchanges initiative in 2024.
Industry-based metrics and cross-industry metrics
- IFRS S2 requires an issuer to disclose industry-based metrics that are associated with common business models and activities in a particular industry. When an issuer provides industry-based metrics, it shall refer to and consider the relevant industry-based guidance to present fairly the climate-related risks and opportunities to which it is exposed.
- In addition, IFRS S2 requires an issuer to disclose cross-industry metric categories including:
- climate-related transition risks – the amount and percentage of assets or business activities vulnerable to transition risks;
- climate-related physical risks – the amount and percentage of assets or business activities vulnerable to physical risks;
- capital deployment – the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities; and
- internal carbon prices used to assess the cost of emissions.
The industry-based guidance can assist issuers in meeting the requirements for disclosures related to cross-industry metric categories.
Materiality
- As guidance, sustainability reporting relates to the most important ESG risks and opportunities that will act as barriers or enablers to achieving business goals in the short, medium and long term. The omission or misstatement of these risks or opportunities could influence the decisions of investors. The sustainability reporting framework selected by the issuer may also contain a definition of materiality that the issuer should consider. For example, for climate-related disclosures, in accordance with the IFRS Sustainability Disclosure Standards, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports. This would require consideration of the characteristics of those users and of the issuer’s own circumstances.
- Generally, what is material in sustainability reporting would also be considered material in financial terms, if not in the immediate period, then over time.
- In assessing materiality of the ESG factors on which it reports, the issuer should first satisfy itself of the relevance of selected factors to its business strategy and outcomes. This has the benefit of focusing both executives and employees on uniform key risks and opportunities that deliver (or impede) desired outcomes.
- The issuer should use risk ranking and prioritisation to distil the material ESG factors. This process is similar to the widely-practised Enterprise Risk Management (“ERM”) process. The issuer should expand the breadth of the assessment to integrate ESG risk management structures into existing ERM structures or apply existing ERM structures to ESG risk management structures. Issuers may consider sustainability-related opportunities as part of business strategy.
- The Board should determine the material ESG factors and the issuer's response to the attendant risks and opportunities. Discussion with stakeholders contributes to an accurate appreciation of what is important in the business on an ongoing basis.
Possible process and tools
- A possible process for assessing ESG factors with material relevance to the business and business model are set out in the following paragraphs.
- In assessing materiality of the ESG factors on which it reports, the issuer may consider:
- Value drivers
- Stakeholder engagement
- Risk management
- External factors, for example sector, geography, economics, market, social, environment
- Internal factors, for example business model, business cycle, strategy
- Qualitative perspectives, for example operational, strategic, reputational and regulatory
- Timeframe of these considerations
- The issuer may use the following Materiality Determination Process: Identify — Rate — Prioritise — Validate. The issuer should disclose the outcomes of this process in its sustainability report.
- STEP 1: IDENTIFY. The issuer should identify the most pressing (material) factors (impact/opportunities) for the issuer (or for each subsidiary in the group). It will also help formulate management's approach and response, and identify where data collection needs to be strengthened.
- STEP 2: RATE. Once the issues of the issuer and its subsidiaries have been explored, the issuer will need to cluster similar issues e.g. safety and health issues can be clustered together. If the issuer is a holding company, a rating process can be done to assess what issues are pervasive/most common across the group.
- STEP 3: PRIORITISE. Once the issues of the issuer and its subsidiaries have been clustered and rated, the issuer will need to prioritise them using a matrix based on likelihood and impact.
- STEP 4: VALIDATE. Once the issuer has prioritised its factors, they need to be internally validated and signed off by the Board.
Policies, practices and performance
- The issuer should devise policies and processes to adequately and effectively manage the risks associated with the identified material ESG factors, and describe key features of mitigation.
- A description of the ESG practices and performance across historical and the current reporting periods allows investors and the issuer itself to track its progress. These metrics also form the baseline from which the issuer chooses to set its targets, as informed by its strategic plan and financial reporting.
- An effective policy and operational response to sustainability risks and opportunities requires performance measurement and its linkage to performance incentives. Having a good performance measurement system allows the issuer to benchmark performance against stated objectives and facilitates comparison over time and across entities. Clearly linking sustainability risks and opportunities with strategy, other organisational risks, operational indicators, performance measures and performance incentives not only enhances understanding but provides an engine for improvement, innovation and accountability.
- A clear description of the issuer’s substantive response to ESG risks and opportunities, with a focus on its policies, practices and performance against targets, will bolster investors’ confidence in the Board and management.
Sustainability reporting framework
- The issuer should select a sustainability reporting framework which is appropriate for and suited to its industry and business model, and explain its choice. In doing so, the issuer should place importance on using a globally-recognised framework for its wider acceptance in an increasingly global marketplace. The issuer can be more easily understood and compared with its peers in Singapore as well as in other jurisdictions across the world. The issuer should exercise considerable caution if it chooses to deviate from generally-accepted frameworks. Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
- Among the well-known and globally-recognised sustainability reporting frameworks, the IFRS Sustainability Disclosure Standards and the Global Reporting Initiative (“GRI”) Standards set out generic sustainability factors and general principles and indicators that an issuer can use to report sustainability policies, practices, performance and targets. The SASB Standards also enables issuers to adopt an industry-specific approach to material ESG factors. The Integrated Reporting Framework (“<IR>”) also sets out a general framework for reporting. An issuer using <IR> should consider ESG factors when determining their material factors for inclusion in the integrated report. More than one sustainability reporting framework may be chosen as relevant to the issuer's business.
- For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. Some issuers have used the Science Based Targets initiative or other sector-specific guidance to guide their GHG emissions reduction targets.
- The issuer is expected to follow the chosen framework(s) from year to year and build up its knowledge and understanding of how to report effectively. In turn, it can expect to be building up investors' and stakeholders' understanding, leading to increased confidence. In the absence of regulatory changes, only major changes in business strategy and/or model are likely to require change in sustainability reporting framework. This does not preclude examination of framework relevance from time to time.
Time horizons used in the sustainability report
- In making its sustainability report, the issuer should consider whether it would be useful to report matters for their relevance in the short, medium and long term. Accordingly, sustainability policies, practices, performance and targets would be considered along the same time horizons. The time horizons should be internally consistent with those used for strategic planning and financial reporting (e.g. useful life of assets, impairment testing etc.). Where they are not consistent, the reasons for the inconsistency should be disclosed. Typically the short-term is considered less than one year for banking and financial instruments. For the medium term, the issuer may wish to take reference from their typical planning horizon, investment cycle or plant renewal or other considerations relevant to its business. The long-term should be a useful time horizon over which expectations can be formed and efforts planned.
Stakeholder engagement
- Stakeholder engagement is integral to any business and would be conducted regularly. The issuer should consider ESG factors in their engagement with stakeholders, not just with investors, but also customers, staff, suppliers, regulators, local communities and others in the value chain. The issuer should monitor carefully its communication with stakeholders so as to avoid any information asymmetry as it may lead to unfair trading in the securities market.
Group and investment holding company reporting
- Subject to paragraph 4.48 of this Guide, where holding companies and operating subsidiaries are both listed and have to undertake sustainability reporting, the operating entities can report on the ESG factors within their scope of operations. If the ESG factors are also material to the holding company, the holding company may make reference in its sustainability report to the sustainability reports of the operating subsidiaries. If the holding company has material investee companies which are not subsidiaries, its sustainability report should include the selection and management of these investee companies.
- IFRS S1 requires an issuer to provide disclosures required by the IFRS Sustainability Disclosure Standards as part of its general purpose financial reports. For climate-related disclosures, an issuer may only make reference to other reports published by the same entity (and not the sustainability reports of its operating subsidiaries).
- Internal Reviews and External Assurance
- Internal reviews and external assurance increase stakeholder confidence in the accuracy and reliability of the sustainability information disclosed.
- These procedures over sustainability disclosures should be aligned with the issuer’s existing internal review or external assurance frameworks for other management information, such as financial information or production data.
- An internal review of the sustainability reporting process builds on the issuer’s existing governance structure, buttressed by adequate and effective internal controls and risk management systems. The internal audit function conducts the internal review, and may involve relevant functions, such as risk management, sustainability or other specialist functions. The identified processes relating to sustainability reporting should be incorporated into the internal audit plan, which should cover key aspects of the sustainability report; the review may take place over an audit cycle, which may span one or a few years in accordance with risk-based planning, as approved by the Audit Committee. The expectations of the Board, management and other stakeholders should be considered as part of the prioritisation. The internal review should be conducted in accordance with the International Standards for the Professional Practice of Internal Auditing (or any subsequent framework or standard including the International Professional Practices Framework and the Global Internal Audit Standards replacing such standards) issued by The Institute of Internal Auditors. If the issuer has reviewed that certain or all key aspects of the sustainability report has been externally assured, the issuer can, as part of its internal review, determine that no further internal review on such aspects of the sustainability report is required under a risk-based approach.
- An issuer whose sustainability reporting has already matured after several annual exercises would want to undertake external assurance by independent professional bodies to add credibility to the information disclosed and analysis undertaken. The issuer is encouraged to consider independent external assurance on selected important aspects of its sustainability report even in its initial years, expanding coverage in succeeding years.
- External assurance involves the engagement of a third party. The scope of the assurance may include a materiality assessment, and cover different aspects of the sustainability disclosures, for example:
- data and its associated data collection process;
- narratives;
- compliance with the specified sustainability reporting framework;
- process to identify sustainability information reported; and
- compliance with the Listing Rules.
- External assurance should be performed in accordance with recognised assurance standards, for example the International Standard on Assurance Engagements (ISAE) 3000 (or any subsequent sustainability-specific standard including the International Standard on Sustainability Assurance (ISSA) 5000), the ISAE 3410, the Singapore Standards on Assurance Engagement (SSAE) 3000 (or any subsequent sustainability-specific standard including the Singapore equivalent of the ISSA 5000), the SSAE 3410, the AA 1000 Assurance Standards or the ISO.
- An issuer that has conducted external assurance should disclose, in the sustainability report, that external assurance has been conducted, including the scope covered, the identity of the external assurer, the standards used, the level of assurance obtained and key findings.
- Form and Frequency of Sustainability Reporting
- The issuer should report on sustainability at least once a year. The issuer's sustainability disclosure may be done in its annual report. The inclusion of sustainability risks and opportunities with the businesses' other risks and strategy in the same document presents advantages to the user. Sustainability reports contained within annual reports would observe annual report deadlines. Alternatively, if more appropriate for the circumstances of the issuer, the issuer may include a summary in its annual report and issue a full standalone sustainability report within 4 months of the end of the financial year, or where the issuer has conducted external assurance on the sustainability report, within 5 months of the end of the financial year.
- In either case, the issuer should make available its sustainability reports on SGXNet and on its company website. After a few years of sustainability reporting, the issuer may wish to maintain static information, such as, policies and historical sustainability information, on its website while presenting the current year's changes as well as performance in the annual sustainability report.
- To provide sufficient time for preparation, a newly listed issuer (other than an issuer that has an obligation to prepare a sustainability report under local legislation prior to listing) may issue its first sustainability report only in respect of its first full financial year after listing.
- Implementation of Sustainability Reporting and Climate-related Disclosures
- For the first year of sustainability reporting, an issuer new to sustainability reporting should have at least the assessment of material ESG factors, policies and/or practices to address the factors; but if their reporting is lacking in qualitative or quantitative descriptions, they need only state progressive targets for reaching maturity of reporting and do their best to meet them in subsequent years.
- For climate-related disclosures, an example of how issuers could report over a few years using the (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards is illustrated in the table below. Issuers may decide on an implementation approach that best suits their circumstance and that complies with the listing requirements.
Illustration of Possible Phased Approach
Year 1 Year 2 Year 3 Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*# Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*# Climate-related scenario analysis with more quantitative outcomes Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high
Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#
Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high
Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#
More quantitative disclosures of current and anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*# where necessary Limited disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities* Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities* Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities* Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* Disclosure of reliance on the (temporary) transition reliefs of (a) not using the Greenhouse Gas Protocol and (b) not providing comparative information in respect of the preceding period Use the Greenhouse Gas Protocol to calculate its GHG emissions
Comparative information in respect of the preceding periodUse the Greenhouse Gas Protocol to calculate its GHG emissions
Comparative information in respect of the preceding periodFor issuers already disclosing Scope 3 GHG emissions, continue to disclose Scope 3 GHG emissions
For other issuers, to build capabilities to report Scope 3 GHG emissions* Using all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort
# Considering the issuer’s skills, capabilities and resources
- Glossary
ESG factors Environmental, social and governance factors that affects the issuer's performance and prospects. Also referred to as sustainability issues, or sustainability risks and opportunities. Does not mean philanthropy or other charitable activities. Sustainability reporting The publication of information on material ESG factors in a comprehensive and strategic manner. Materiality In relation to ESG factors, the most important ESG risks and opportunities that will act as barriers or enablers to achieving business goals in short, medium and long term. The omission or misstatement of these risks or opportunities could influence the decisions of investors.
Added on 20 July 201620 July 2016 and amended on 7 February 20207 February 2020, 1 January 2022 and 1 January 2025.
Practice Note 7G Announcement of dividends and other corporate actions
Cross-referenced from Rule 106 and Rule 704(24)
1. Introduction
1.1 Rule 704(24) states that after the end of the first three quarters of its financial year, half year or financial year, as the case may be, an issuer must not make specific corporate action announcements (i.e., dividend, bonus issue or rights issue, record date, capital return or passing of a dividend), unless it is accompanied by the financial statements for the quarter, half year or financial year (as set out in Appendix 7C), as the case may be, or the financial statements (as set out in Appendix 7C) have been announced
1.2 Rule 106 states that the Exchange may waive or modify compliance with a Rule. This Practice Note sets out guidance on the restricted periods in which an issuer may not make specific corporate action announcements (the “Restricted Periods”). Additionally, this Practice Note sets out guidance on a waiver in respect of announcement of dividend or passing of dividend, subject to certain conditions.
2. Restricted Period on announcements of bonus issue or rights issue, record date or capital return
2.1 In relation to announcements of bonus issue or rights issue, record date or capital return, the Restricted Periods set out in 704(24) shall commence from such time after the end of the relevant financial period in which an issuer is announcing its financial statements in accordance with Rule 705, until such time when such financial statements have been announced.
2.2 For an issuer that announces its financial statements for its half year in accordance with Rule 705(3)(b)(ii) and its full financial year in accordance with Rule 705(1), the Restricted Periods for announcements of bonus issue or rights issue, record date or capital return shall commence from after the end of the issuer's half year and full financial year until the financial statements for these financial periods have been announced.
2.3 On the other hand, for an issuer that announces its financial statements for each of the first three quarters of its financial year in accordance with Rule 705(2) or Rule 705(3)(b)(i) and its full financial year in accordance with Rule 705(1), the Restricted Periods for such announcements shall commence from after the end of the first three quarters of the financial year and the full financial year, as the case may be, until the financial statements for these financial periods have been announced.
2.4 Other than for the Restricted Periods set out in paragraphs 2.1 to 2.3, Rule 704(24) does not prohibit issuers from making announcements of bonus issue or rights issue, record date or capital return at all other periods.
3. Announcements of dividend or passing of dividend
3.1 The announcement of dividend or passing of dividend without it being accompanied by the release of the results may send signals on a company's financial performance for the relevant period.
3.2 Thus, the Restricted Periods for announcements of dividend or passing of dividend shall commence from after the end of the first three quarters of the financial year and the full financial year, until the financial statements for the first three quarters, half year or full financial year have been announced in accordance with Appendix 7C. This approach applies regardless of whether the issuer performs financial reporting on a quarterly basis or a half-yearly basis.
3.3 Therefore, an issuer must not announce dividend or passing of dividend in relation to the first or third quarters of the financial year, unless the issuer has announced its quarterly financial statements in accordance with Appendix 7C (whether required by the Exchange or otherwise) for the first or third quarters of the financial year.
3.4 However, dividend announcements are permissible without being accompanied by the results for the relevant period if the issuer is able to fulfill the following conditions: —
(i) the issuer must have a committed dividend policy to announce dividends on a quarterly basis and such policy must have been communicated to shareholders;
(ii) the issuer must confirm, for each dividend announced for the first or third quarter of the financial year, that after making payment of the dividend, the issuer has sufficient financial resources to fulfill its liabilities as and when they fall due; and
(iii) in the case of an issuer that is a corporation, the issuer must confirm, for each dividend announced for the first or third quarter of the financial year, that the corporation complies with or will comply with section 403 of the Companies Act or similar statutory requirements in its place of incorporation.
3.5 Notwithstanding this exemption, all issuers are reminded of their obligation to make immediate disclosures of material information under Rule 703, which will include a material development that will cause dividends to significantly deviate from expectations based on previous announcements, or if no dividend is paid. The exemption set out in paragraph 3.4 will cease to apply once an issuer is unable to fulfill its commitment to the dividend policy.
3.6 Other than for the Restricted Periods set out in paragraph 3.2, Rule 704(24) does not prohibit issuers from making announcements of dividend or passing of dividend at all other periods.
4. Announcements of record date for previously announced bonus issues or rights issues, capital return or dividend
4.1 Rule 704(24) does not prohibit the announcement of a record date during the Restricted Period if such record date is relating to a dividend, capital return, bonus issue or rights issue which has been previously announced outside the Restricted Periods for such announcements as set out in this Practice Note.
Added on 7 February 20207 February 2020.
Practice Note 8A Rights Issue Timetable
Cross-referenced from Rule 823
The following is the expected timetable for a renounceable rights issue:—
| No of market days after record date (D) | ||
| (a) | To dispatch SRAFs to shareholders who hold shares in their securities accounts with CDP, and to dispatch PALs to CDP and to shareholders whose names appear on the register | D+3 |
| (b) | Commencement of trading of nil-paid rights | D+3 |
| (c) | Latest day for trading of nil-paid rights | On or after D+9 |
| (d) | Last day for receipt and acceptance of SRAFs | On or after D+13 |
The following is the expected timetable for a non-renounceable rights issue:—
| No of market days after record date (D) | ||
| (a) | To dispatch SRAFs to shareholders who hold shares in their securities accounts with CDP, and to dispatch PALs to CDP and to shareholders whose names appear on the register | D+3 |
| (b) | Last day for receipt and acceptance of SRAFs | On or after D+9 |
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
Practice Note 8B Sub-Underwriting Arrangements
Cross-referenced from Part V of Chapter 8
Added on 1 January 20111 January 2011.
Part I Introduction
1. The objective of this Practice Note is to provide guidance on sub-underwriting arrangements entered into with controlling shareholders and substantial shareholders where sub-underwriting fees will be paid. Payment of sub-underwriting fees to controlling shareholders and substantial shareholders to take up their rights entitlement and/or sub-underwrite a portion of the excess rights shares translates to a larger price discount for the rights shares for such shareholders.
2. This Practice Note sets out the requirement for all sub-underwriting arrangements, entered into with controlling shareholders and substantial shareholders where sub-underwriting fees are paid, to be subject to specific shareholders' approval. To protect the interest of other shareholders, we are also requiring specific conditions to be met by issuers and underwriters.
Part II Shareholders' Approval
1. For issuers seeking shareholders' approval for the rights issue, a separate resolution is needed where sub-underwriting fees will be paid to controlling shareholders and substantial shareholders.
2. Issuers that intend to utilise the general mandate for the issue of rights shares will have to seek specific shareholders' approval for the sub-underwriting arrangements where a sub-underwriting fee will be paid.
Part III Conditions to be Satisfied by Issuers and Underwriters
1. To increase the transparency and accountability of these sub-underwriting arrangements, the Exchange will allow sub-underwriting arrangements with a fee to be entered into with controlling shareholders and substantial shareholders, where specific conditions are satisfied by issuers and underwriters:—
(a) The issuer's Board of Directors ("Board") provides assurance that the terms of the sub-underwriting arrangement are fair and not prejudicial to the issuer and to other shareholders. The Board must provide the basis for their opinion;
(b) The issuer's Board provides a confirmation in the circular to shareholders that the terms agreed between the issuer and the underwriter (including the commission payable to the underwriter and the controlling and/or substantial shareholder) are on arms' length and normal commercial terms;
(c) The underwriter must be a financial institution licensed by the Monetary Authority of Singapore to conduct underwriting activities;
(d) The Board's opinion (including the basis thereof) and the confirmation referred to in paragraphs (a) and (b) above, together with a statement whether there are any dissenting views of the Board members (and if so, details of the dissenting views), must be disclosed in the circular to shareholders;
(e) The underwriters confirm to the Board that:—
(i) the discussion on the sub-writing arrangement with the sub-underwriters was initiated by the underwriters and not by the sub-underwriters; and
(ii) the underwriters will not underwrite the rights issue unless the sub-underwriters enter into the sub-underwriting arrangement.
(f) The commission that the sub-underwriters earn shall not be higher than, and must be part of, the commission paid to the underwriters; and
(g) The fee earned by the underwriters and sub-underwriters must be disclosed in the circular to shareholders.
Practice Note 10A Acquisitions and Realisations
Cross-referenced from Chapter 10
1. Introduction
1.1 This Practice Note sets out, in relation to acquisitions and realisations, the following:
(a) the types of acquisitions and disposals that are regarded to be in, or in connection with, the ordinary course of an issuer's business;
(b) the considerations to apply in computing the relative figures under Rule 1006;
(c) the applicability of Chapter 10 where any of the relative figures computed pursuant to Rule 1006 involves a negative figure;
(d) the factors to be taken into account in arriving at the consideration value of a transaction for the purposes of Chapter 10;
(e) the considerations to apply where a transaction requires shareholders' approvals for inter-conditional proposals; and
(f) the circumstances under which the Exchange may grant a waiver of the requirement for shareholders' approval of any major transactions.
1.2 Issuers should consult their sponsors as early as possible about particular transactions if there are questions on the rules. Sponsors may consult the Exchange on the application of the rules in respect of a particular transaction, if necessary. Sponsors are required to furnish the Exchange with the full facts and information on the matters consulted.
1.3 Notwithstanding the classification of the transaction, the Exchange may, in appropriate circumstances, exercise its powers under Chapter 3 to impose additional requirements on the transaction, including to require that the issuer appoint an independent professional, or that the transaction be made conditional upon the approval of shareholders or the Exchange.
1.4 In this Practice Note, "issuer" refers to the issuer or a subsidiary that is not listed on the Exchange or primary listed on an approved exchange, unless the context otherwise requires.
2. Acquisitions and Disposals in, or in Connection with, the Ordinary Course of an Issuer's Business
2.1 Rule 1002(1) states, among others, that, unless the context otherwise requires, "transaction" refers to the acquisition or disposal of assets by an issuer or a subsidiary that is not listed on the Exchange or on an approved exchange, including an option to acquire or dispose of assets. It excludes an acquisition or disposal which is in, or in connection with, the ordinary course of its business or of a revenue nature.
2.2 An acquisition that is regarded to be in, or in connection with, the ordinary course of an issuer's business, is not subject to the requirements under Chapter 10 (except for Part VIII on very substantial acquisitions or reverse takeovers).
2.3 An acquisition can be regarded to be in, or in connection with, the ordinary course of an issuer's business, if:
(a) the asset to be acquired is part of the issuer's existing principal business; and
(b) the acquisition does not change the issuer's risk profile.
2.4 Existing principal business: An asset is part of the issuer's existing principal business if the acquisition of the asset is required to be reported under the applicable accounting standards within a specific reportable operating segment (excluding any miscellaneous "any other segment" category) that:
(a) contributes more than 20% of the issuer's net profits or total assets; and
(b) has been reported in the issuer's latest audited financial statements.
2.5 Change of risk profile: The following are indications that an acquisition would change the risk profile of an issuer:
(a) notwithstanding Rule 1002(3)(c), a proposed acquisition will result in reduction of the issuer's net profits or net asset value by 20% or more, based on the latest audited financial statements, and assuming that the proposed acquisition had been effected at the end of that financial year;
(b) the asset proposed to be acquired is loss-making or is in a net liability position;
(c) the proposed acquisition will have a significant adverse impact on the issuer's gearing;
(d) the proposed acquisition will result in an expansion into a new jurisdiction that will expose the issuer to significant new risks; or
(e) in the case of a mineral, oil and gas company, a proposed acquisition will result in an expansion into a new resource or commodity type, or into a new jurisdiction. The exploration and extraction methods of different types of minerals, oil and gas are different. Minerals, oil and gas resources are also necessarily situated in specific geographical areas, which may be subject to specific licensing or regulatory regimes. An expansion into a new resource or commodity type, or into a new jurisdiction, is likely to require a reconsideration of the applicable risks.
These indicators are neither exhaustive nor conclusive.
2.6 A disposal of an issuer's business (or a substantial part of its business) will usually not be considered to be in the ordinary course of business.
3. Computation of Relative Figures under Rule 1006
3.1 Rule 1006 sets out the following bases for computing the relative size of a transaction:
(a) Rule 1006(a): The net asset value of the assets to be disposed of, compared with the group's net asset value. This basis is not applicable to an acquisition of assets;
(b) Rule 1006(b): The net profits attributable to the assets acquired or disposed of, compared with the group's net profits;
(c) Rule 1006(c): The aggregate value of the consideration given or received, compared with the issuer's market capitalisation based on the total number of issued shares excluding treasury shares;
(d) Rule 1006(d): The number of equity securities issued by the issuer as consideration for an acquisition, compared with the number of equity securities previously in issue; and
(e) Rule 1006(e): The aggregate volume or amount of proved and probable reserves to be disposed of, compared with the aggregate of the group's proved and probable reserves. This basis is applicable to a disposal of mineral, oil or gas assets by a mineral, oil and gas company, but not to an acquisition of such assets.
3.2 For the purposes of computing the relative figures of Rule 1006, an issuer shall consider the following:
(a) in computing the net asset value of a business to be disposed of under Rule 1006(a), if there is a capitalisation, or a waiver or write-off of a loan (in full or in part) extended by the issuer to the business, the amount of the loan, waiver or write-off shall be added to the net asset value of the business; and
(b) in computing the aggregate value of consideration given or received under Rule 1006(c):
(i) any deferred consideration that may be payable or receivable by the issuer in the future shall be included in the aggregate value of consideration (i.e., the consideration is the maximum total consideration payable or receivable under the agreement);
(ii) any additional amounts related to the transaction, including loans or guarantees extended by the purchaser or the provision of other forms of security, shall be included in the aggregated value of consideration;
(iii) any additional liabilities (whether actual or contingent) to be assumed by the purchaser or waived by the seller under the terms of the transaction shall be included in computing the aggregate value of consideration. For example, in the case of a disposal of a business at a nominal consideration but which obliges the purchaser to repay a loan, or the seller to waive or write-off a loan, that was extended to the business, the value of consideration shall include the amount of the loan; and
(iv) if a business to be acquired has negative net asset value, the absolute value of the negative net asset value shall be taken into account in computing the aggregate value of consideration. For example, in the case of an acquisition at a nominal value of a business with negative net asset value, the value of consideration shall include the absolute value of the negative net asset value of the business.
4. Negative Relative Figures under Rule 1006
4.1 In some cases, tests based on assets under Rule 1006(a) and profits under Rule 1006(b) may involve a negative figure in the numerator, denominator or both, which may not give a meaningful indication of the significance of the transaction to the issuer. Such situations arise where a transaction concerns any of the following:
(a) an issuer with a negative net asset value;
(b) a disposal of an asset with negative net asset value;
(c) a loss-making issuer; and
(d) an acquisition or a disposal of a loss-making asset.
By way of example, (i) the disposal of an asset with negative net asset value by an issuer with a negative net asset value; or (ii) the acquisition or disposal of a loss-making asset by a loss-making issuer, will result in a negative relative figure computed pursuant to Rule 1006(a) and Rule 1006(b) respectively.
4.2 Under Rule 1007(1), if any of the relative figures computed pursuant to Rule 1006 involves a negative figure, Chapter 10 may still be applicable to the transaction in accordance with the applicable circumstances in this Practice Note 10A.
4.3 In the following situations, unless Rule 703, Rule 905 or Rule 1009 applies, no announcement and shareholders' approval of the transaction is required:
(a) the acquisition of a loss-making asset by an issuer (whether profitable or loss-making), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(c) and Rule 1006(d) amounts to 5% or less; and
(ii) the net loss attributable to the asset to be acquired amounts to 5% or less of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values);
(b) the acquisition of a profitable asset by a loss-making issuer, where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(c) and Rule 1006(d) amounts to 5% or less; and
(ii) the net profit attributable to the asset to be acquired amounts to 5% or less of the consolidated net loss of the issuer (taking into account only the absolute value);
(c) the disposal of an asset by an issuer (where either or both the asset or the issuer has negative net asset value), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(b), Rule 1006(c) and (if applicable) Rule 1006(e), amounts to 5% or less; and
(ii) if the disposal will result in a loss on disposal, the loss on disposal amounts to 5% or less of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values);
(d) the disposal of a profitable asset by a loss-making issuer, where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(a), Rule 1006(c) and (if applicable) Rule 1006(e) amounts to 5% or less; and
(ii) the net profit attributable to the asset to be disposed of and, if the disposal will result in a loss on disposal, the sum of such net profit and the loss on disposal, amounts to 5% or less of the consolidated net loss of the issuer (in each case taking into account only the absolute value); and
(e) the disposal of a loss-making asset by an issuer (whether profitable or loss-making), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(a), Rule 1006(c) and (if applicable) Rule 1006(e) amounts to 5% or less; and
(ii) if the disposal will result in a loss on disposal, the loss on disposal amounts to 5% or less of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values).
However, if the issuer wishes to announce the transaction, the announcement must include the information required under Rule 1008(2).
4.4 In the following situations, an issuer must, in relation to the transaction, immediately announce the information required in Rule 1010, Rule 1011, Rule 1012 and Rule 1013, where applicable:
(a) the acquisition of a loss-making asset by an issuer (whether profitable or loss-making), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(c) and Rule 1006(d) does not exceed 75%; and
(ii) the net loss attributable to the asset to be acquired exceeds 5% but does not exceed 10% of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values);
(b) the acquisition of a profitable asset by a loss-making issuer, where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(c) and Rule 1006(d) does not exceed 75%; and
(ii) the net profit attributable to the asset to be acquired exceeds 5% of the consolidated net loss of the issuer (taking into account only the absolute value);
(c) the disposal of an asset by an issuer (where either or both the asset or the issuer has negative net asset value), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(b), Rule 1006(c) and (if applicable) Rule 1006(e) does not exceed 50%; and
(ii) if the disposal will result in a loss on disposal, the loss on disposal exceeds 5% but does not exceed 10% of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values);
(d) the disposal of a profitable asset by a loss-making issuer, where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(a), Rule 1006(c) and (if applicable) Rule 1006(e) does not exceed 50%; and
(ii) the net profit attributable to the asset to be disposed of and, if the disposal will result in a loss on disposal, the sum of such net profit and the loss on disposal, exceeds 5% but does not exceed 10% of the consolidated net loss of the issuer (in each case taking into account only the absolute value); and
(e) the disposal of a loss-making asset by an issuer (whether profitable or loss-making), where:
(i) the absolute relative figure computed on the basis of each of Rule 1006(a), Rule 1006(c) and (if applicable) Rule 1006(e) does not exceed 50%; and
(ii) if the disposal will result in a loss on disposal, the loss on disposal exceeds 5% but does not exceed 10% of the consolidated net profit or net loss of the issuer (in each case taking into account only the absolute values).
4.5 In relation to Rule 1010(13), notwithstanding that a relative figure computed on the bases set out in Rule 1006 is negative, the issuer must still announce its value.
4.6 If the transaction does not fall within all the situations in paragraphs 4.3 and 4.4, Rule 1014 shall apply to the transaction. By way of example, unless the disposal of a loss-making asset with negative net asset value falls within paragraphs 4.3(c), 4.3(e), 4.4(c) and 4.4(e), Rule 1014 shall apply to the transaction.
5. Factors taken into Account in Arriving at Consideration Value
5.1 Where the relative figures under Rule 1006 exceeds 5%, Rule 1010, Rule 1014 and Rule 1015 require the issuer to announce certain information about the transaction. Among others, the issuer must announce the aggregate value of the consideration, stating the factors taken into account in arriving at it and how it will be satisfied.
5.2 Substantive factors should be disclosed to justify the aggregate value of the consideration. The mere fact that the consideration was arrived at on a "willing buyer willing seller" basis is not a sufficient factor.
6. Shareholders' Approvals for Inter-conditional Proposals
6.1 If a transaction requires shareholders' approvals for inter-conditional proposals, the issuer should consider whether separate resolutions on the different aspects of the proposal are to be voted on by shareholders.
6.2 In reviewing circulars to be sent to shareholders, the Exchange will consider whether the resolutions have been constructed in a manner that allows shareholders to properly exercise their voting rights.
7. Waiver of Shareholders' Approval for Major Transactions
7.1 A major transaction is one where any of the relative figures as computed on the bases set out in Rule 1006 (a) for an acquisition, exceeds 75% but is less than 100%; or (b) for a disposal, exceeds 50%. Under Rule 1014, a major transaction must be made conditional upon approval by shareholders in general meeting and a circular containing the information in Rule 1010, Rule 1011, Rule 1012 and Rule 1013 must be sent to all shareholders.
7.2 Where an issuer seeks a waiver from the requirement for shareholders' approval, the issuer must submit an opinion to the sponsor from its board of directors that there has been or will be no material change in the risk profile of the issuer arising from the transaction, including the basis for its opinion.
7.3 The Exchange may grant the waiver in the following circumstances:
(a) a proposed transaction has been foreshadowed or investors have had the opportunity to consider and vote in favour of the proposal at a previous general meeting; and
(b) a proposed disposal involves a non-core asset. This is because a non-core asset is not likely to affect the nature of the issuer's principal business. A non-core asset is one that meets all of the following criteria:
(i) it is not critical to the principal business activity of the issuer;
(ii) it is ancillary to the principal business activity of the issuer; and
(iii) it is not an existing principal business (as described in paragraph 2.4) of the issuer.
7.4 The Exchange will not grant a waiver from the requirement for shareholders' approval solely on the basis that the substantial shareholders of the issuer have undertaken to vote in favour of the transaction. As a general rule, shareholders should be given the opportunity to vote on the issuer's proposal.
7.5 The Exchange would not in normal circumstances regard only the cost and inconvenience of convening a meeting as sufficient reasons to grant a waiver.
7.6 Under Rule 106, where a waiver is granted, the issuer must announce the waiver, the reasons for seeking the waiver and the conditions, if any, upon which the waiver is granted as soon as practicable.
Amended on 29 September 201129 September 2011, 29 September 201129 September 2011 and 7 February 20207 February 2020.
Practice Note 12A Responsibility Statements For Directors And Financial Advisers
Cross-referenced from Rules 407(4)(a), 1015(4)(b), 1202, 1203(7) and Appendix 8A
1. This Practice Note provides guidance on the wordings for the responsibility statements for directors, vendors and financial advisers.
2. Responsibility Statement for Directors and Vendors
2.1 For the purposes of Rule 407(4)(a) and Rule 1202, the following directors' [or vendors'] responsibility statement should be included in circulars:
"The [directors/vendors] collectively and individually accept full responsibility for the accuracy of the information given in this circular and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this circular constitutes full and true disclosure of all material facts about the [describe proposed action], the issuer and its subsidiaries, and the [directors/vendors] are not aware of any facts the omission of which would make any statement in this circular misleading, [and where the circular contains a profit forecast, the directors are satisfied that the profit forecast has been stated after due and careful enquiry]. Where information in the circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the [directors/vendors] has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in the circular in its proper form and context."
"The [directors/vendors] collectively and individually accept full responsibility for the accuracy of the information given in this circular and confirm after making all reasonable enquiries, that to the best of their knowledge and belief, this circular constitutes full and true disclosure of all material facts about the [describe proposed action], the issuer and its subsidiaries, and the [directors/vendors] are not aware of any facts the omission of which would make any statement in this circular misleading, [and where the circular contains a profit forecast, the directors are satisfied that the profit forecast has been stated after due and careful enquiry]. Where information in the circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the [directors/vendors] has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in the circular in its proper form and context."
3. Responsibility Statement for Sponsors and/or Financial Advisers
3.1 For the purposes of Rule 1015(4)(b), Rule 1203(7) and Appendix 8A, the following financial adviser's responsibility statement should be included in circulars:
"To the best of the sponsor's and / or financial adviser's knowledge and belief, this circular constitutes full and true disclosure of all material facts about the [describe proposed action], the issuer and its subsidiaries, and the financial adviser is not aware of any facts the omission of which would make any statement in the document misleading; [and where the document contains a profit forecast, it is satisfied that the profit forecast has been stated by the directors after due and careful enquiry]."
"To the best of the sponsor's and / or financial adviser's knowledge and belief, this circular constitutes full and true disclosure of all material facts about the [describe proposed action], the issuer and its subsidiaries, and the financial adviser is not aware of any facts the omission of which would make any statement in the document misleading; [and where the document contains a profit forecast, it is satisfied that the profit forecast has been stated by the directors after due and careful enquiry]."
Added on 29 September 201129 September 2011 and amended on 7 February 20207 February 2020.
Practice Note 12B Internal Controls and Risk Management Systems
Cross-referenced from Rules 407(4)(b) and 1204(10)
1. Introduction
1.2 In its offer document and annual reports, the issuer's board must comment on the adequacy and effectiveness of the internal controls (including financial, operational, compliance and information technology controls) and risk management systems. A statement on whether the audit committee concurs with the board's comments must also be provided.
Rule 407(4)(b) requires the disclosure to be made in the offer document whereas Rule 1204(10) requires the disclosure to be in the annual reports.
Rule 407(4)(b) requires the disclosure to be made in the offer document whereas Rule 1204(10) requires the disclosure to be in the annual reports.
2. Intent of Rules 407(4)(b) and 1204(10)
2.1 Internal controls (including financial, operational, compliance and information technology controls) and risk management systems serve to safeguard shareholders' investments and company's assets.
2.2 A board committee, for example, the audit committee is usually responsible for overseeing internal controls and risk management. The board, which includes executive directors, is also responsible for assessing the adequacy and effectiveness of these internal controls and risk management systems.
2.3 The objective of Rules 407(4)(b) and 1204(10) is to increase transparency and accountability. In providing this comment, the board and the audit committee are required to demonstrate that they have rigorously assessed the (i) internal controls (including financial, operational, compliance and information technology controls) and (ii) risk management systems.
3. Compliance with Rules 407(4)(b) and 1204(10)
3.1 In satisfying Rules 407(4)(b) and 1204(10), the board and the audit committee may ask for an independent audit on internal controls or risk management systems to assure themselves on the adequacy and effectiveness of the systems of internal controls and risk management, or if they are not satisfied with the systems of internal controls or risk management.
3.2 The issuer should maintain proper record of the discussions and decisions of the board and the audit committee.
3.3 Compliance with Rules 407(4)(b) and 1204(10) involve the following disclosures:-
(i) Where the board and the audit committee are satisfied that the issuer has adequate and effective systems of internal controls and risk management, the disclosure must include the basis for such comment.
To avoid doubt, under Rule 225(1)(e), a full sponsor, in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, must satisfy itself that the listing applicant or enlarged group has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the securities of the issuer remain listed on Catalist. This is in addition to Rule 407(4)(b) which requires the board and audit committee to disclose the basis for their comments on the adequacy and effectiveness of the issuer's systems of internal controls and risk management.
To avoid doubt, under Rule 225(1)(e), a full sponsor, in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, must satisfy itself that the listing applicant or enlarged group has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the securities of the issuer remain listed on Catalist. This is in addition to Rule 407(4)(b) which requires the board and audit committee to disclose the basis for their comments on the adequacy and effectiveness of the issuer's systems of internal controls and risk management.
(ii) In relation to Rule 1204(10), where the board and/or the audit committee has commented that internal controls or risk management systems need to be strengthened, or has concerns that internal controls or risk management systems are inadequate, the board must disclose the issues and how it seeks to address and monitor the areas of concerns.
4. Format of Disclosure
4.1 There is no prescribed format of disclosure.
4.2 As the board and audit committee are obliged by Rules 407(4)(b) and 1204(10) to provide the specific disclosures in Paragraph 3.3 above, the Exchange recommends the comment be provided in the following ways:-
(i) Disclosure to be made in the section on "Audit Committee", "Internal Controls" or "Risk Management" of the offer document for compliance with Rule 407(4)(b).
(ii) Disclosure to be made in the Directors' Report or Corporate Governance section of the annual report for compliance with Rule 1204(10).
5. General Principle
5.1 Good disclosures which comply with Rules 407(4)(b) and 1204(10) comprise the following:
(i) The board's comment on the Group's internal controls (including financial, operational, compliance and information technology controls) and risk management systems. A statement on whether the audit committee concurs with the board's comment must also be provided; and
(ii) The basis for the board's comment and if the audit committee does not concur with the board, the basis for the audit committee's comment.
5.2 Should the board or the audit committee comment that the Group's internal controls or risk management systems have material weaknesses, then clear disclosure of these weaknesses and the steps taken to address them is necessary for investors to make an informed decision about the issuer.
Added on 2 April 20132 April 2013 and amended on 1 January 20191 January 2019.
Practice Note 13A Trading Halt and Suspension
Cross-referenced from Rules 1301, 1302 and 1303 and paragraph 23 of Appendix 7A
Part I Introduction
1. This Practice Note provides guidance in connection with trading halts and suspensions.
2. A trading halt is a short term trading stoppage requested by an issuer to disclose material information. It is generally requested for a minimum of thirty 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.
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.
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.
5. The Exchange will normally only halt or suspend the trading of an issuer's securities at the request of the issuer. The sponsor is responsible to advise the issuer and notify the Exchange if it forms the view that a trading halt or suspension is warranted. Where there is a difference in opinion between the sponsor and the issuer, the Exchange will take into account both the sponsor's and the issuer's views when acting on such requests.
Amended on 29 September 201129 September 2011 and 7 February 20207 February 2020.
Part II Trading Hours
6. For normal day trading, our trading hours are from 9.00 am to 12.00 pm and 1.00 pm to 5.00 pm. There is a mid-day break from 12.00 pm to 1.00 pm. Opening Routine is a 30-minute session before trading commences at 9.00 am, i.e. 8.30 am to 9.00 am. Closing Routine will run for 6 minutes after 5.00 pm, i.e. 5.00 pm to 5.06 pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 5.06 pm, i.e. 5.06 pm to 5.16 pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 5.06 pm, i.e. 5.06 pm to 5.16 pm.
7. For half day trading, our trading hours are from 9:00 am to 12:00 pm. Opening Routine is a 30-minute session before trading commences at 9.00 am, i.e. 8.30 am to 9.00 am. Closing Routine will run for 6 minutes after 12.00 pm, i.e. 12.00 pm to 12.06 pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 12.06 pm, i.e. 12.06 pm to 12.16 pm. Trade at Close Phase will run for 10 minutes after the Closing Routine ends at 12.06 pm, i.e. 12.06 pm to 12.16 pm.
Amended on 1 August 20111 August 2011, 13 November 201713 November 2017 and 3 June 20193 June 2019.
Part III Procedures for Trading Halt and Suspension
8. A 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 ("MC"). After alerting the MC officer, the issuer can then send the SGXNET announcement to request for a trading halt or suspension.
9. In the SGXNET announcement, issuers should state the reason for requesting the trading halt or suspension. The announcement should include the statement required under Rule 753(2).
10. 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.
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 7.30 am 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.
Please call and alert Market Control between 7.30 am 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.
Amended on 1 August 20111 August 2011, 29 September 201129 September 2011, 13 November 201713 November 2017 and 3 June 20193 June 2019.
Part IV Procedures for Lifting of Trading Halt and Resumption of Trading From Suspension
11. For both trading halt and suspension, trading can resume only on the quarter-hour between 8.30 am to 4.45pm for lifting of trading halt and between 9.00 am to 4.45pm for resumption of trading from suspension.
12. Issuers must allow at least 30 minutes of dissemination time after a material announcement is made and before trading resumes.
13. 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 10:00 am and releases the material information at 10:16 am, if there is no further release of material information, the issuer may also make a request for lifting of trading halt announcement at 10:16 am. However, trading may only resume at 11:00 am. If an issuer wishes to resume trading at 11:00 am, the latest time which the issuer is required to make the request for lifting of trading halt announcement is 10:45 am.
14. 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 3:00 pm and releases the material information at 3:14 pm, 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 3:14 pm. However, trading may only resume at 3:45 pm. If an issuer wishes to resume trading at 3:45 pm, the latest time which the issuer is required to make the request for the resumption of trading from suspension announcement is 3:15 pm.
15. 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.
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 7.30 am and 8.30 am although the SGXNET request can be released anytime after the close of the previous market day and before 8.30 am on the day of the lifting of trading halt or resumption of trading from suspension.
Please call and alert Market Control between 7.30 am and 8.30 am although the SGXNET request can be released anytime after the close of the previous market day and before 8.30 am on the day of the lifting of trading halt or resumption of trading from suspension.
Amended on 1 August 20111 August 2011, 29 September 201129 September 2011, 13 November 201713 November 2017, 3 June 20193 June 2019 and 7 February 20207 February 2020.
Part V SGXNET Templates
16. Issuers whose securities have been halted or suspended and wish to resume trading upon commencement of trading on a market day are advised to disclose both their material announcement and SGXNET request for resumption of trading pursuant to paragraphs 12, 13 and 14 of this Practice Note.
17. 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; or
d. Request for Resumption of Trading from Suspension.
Amended on 29 September 201129 September 2011, 13 November 201713 November 2017 and 7 February 20207 February 2020.
Part VI Disclosure Obligations
18. While the listed securities of an issuer is suspended from trading, shareholders must be kept updated regularly on material developments, particularly on efforts undertaken to allow the listed securities to resume trading. Accordingly, except as provided in Rule 1303(2) and Rule 1303(3), issuers whose listed securities are suspended from trading should provide half-yearly updates on their developments via SGXNET. If there has been no material updates since the previous update, it is still salutary to state so in the issuer's subsequent update. Such announcements inform shareholders that the circumstances in the last material update continue to apply and that there is no material development of which they should take note.
Added on 7 February 20207 February 2020.
Practice Note 14A Catalist Transition Process and Timetable
Cross-referenced from Rule 1402
Added on 1 September 20081 September 2008 and amended on 24 July 200924 July 2009.
1. Introduction
(a) This Practice Note sets out the details and timetable on the transition measures to bring Catalist issuers into compliance with Catalist Rules by the Transition Date.
(b) All Catalist Non-Sponsored issuers, except those suspended pursuant to Rule 1303 of the Listing Manual, must comply with the transition requirements set out in this Practice Note.
2. Transition Measures
(a) Quarterly Progress Report to SGX
By 1 November 2008, Catalist Non-Sponsored issuers must submit the first progress report to SGX Catalist Regulation. Thereafter from 1 January 2009, a progress report must be submitted to SGX Catalist Regulation within 45 days after the end of each of the first three quarters and 60 days after the end of the financial year. Such progress reports must be copied to the issuer's Board of Directors and incorporate the following information:
By 1 November 2008, Catalist Non-Sponsored issuers must submit the first progress report to SGX Catalist Regulation. Thereafter from 1 January 2009, a progress report must be submitted to SGX Catalist Regulation within 45 days after the end of each of the first three quarters and 60 days after the end of the financial year. Such progress reports must be copied to the issuer's Board of Directors and incorporate the following information:
(i) Name of issuer;
(ii) Reporting period;
(iii) Name, designation and contact details of Director or person in charge of the search and appointment of sponsor
(iv) Updated timetable of milestones, including but not limited to estimated time periods allocated for the search for a suitable sponsor, negotiation of terms, as well as the estimated dates for the board approval of and the appointment of sponsor;
(v) If applicable, description of any plans that the company will implement as an alternative to appointing a sponsor, such as undergoing a reverse takeover, merger & acquisition, or transferring to Mainboard;
(vi) List of sponsors approached to date; and
(vii) Any other relevant information
(b) Quarterly Progress Update to shareholders and investors
From 1 January 2009, Catalist Non-Sponsored issuers must also announce via SGXNET, within 45 days after the end of each of the first three quarters and 60 days after the end of the financial year, the following information:
From 1 January 2009, Catalist Non-Sponsored issuers must also announce via SGXNET, within 45 days after the end of each of the first three quarters and 60 days after the end of the financial year, the following information:
(i) as required in 2(a)(i) to (iv);
(ii) as required in 2(a)(v), if such information has been announced by the company, and
(iii) any other relevant information.
(c) Requirement to appoint Sponsors for corporate actions
From 1 January 2009, Catalist Non-Sponsored issuers must appoint a sponsor and comply with Catalist Rules when undertaking any of the following corporate actions:
From 1 January 2009, Catalist Non-Sponsored issuers must appoint a sponsor and comply with Catalist Rules when undertaking any of the following corporate actions:
(i) Rights issue or placement of shares, company warrants or other convertible securities for cash, excluding shares issued pursuant to an employee or performance share/share option plan;
(ii) Major transaction as defined under Rule 1013 of the Listing Manual of the former SESDAQ rules;
(iii) Transaction that will require shareholders' approval pursuant to Chapter 9 of the Listing Manual of the former SESDAQ rules; and
(iv) Scheme of Arrangement.
(d) Suspension of Catalist Non-Sponsored issuers after the Transition Date
(i) From 6 February 2010, trading of securities of Catalist Non-Sponsored issuers that have not appointed a sponsor on or before the Transition Date and announced the date from which they will comply with Catalist Rules as agreed with the Exchange, will be suspended.
(ii) The suspended Catalist Non-Sponsored issuers must submit quarterly progress reports to SGX and announce quarterly progress updates via SGXNet as required in 2(a) and 2(b) respectively.
(iii) The suspension will only be lifted and the issuers' trading status reinstated if the Catalist Non-Sponsored issuers appoint a Sponsor in accordance with Rule 1403(3) and comply with Catalist Rules before 31 December 2010.
(e) Delisting of Catalist Non-Sponsored issuers after 31 December 2010
After 31 December 2010, Catalist Non-Sponsored issuers will be delisted and removed from the Official List. Pursuant to Rule 1404(2), issuers will be required to offer a reasonable exit alternative, which should normally be in cash, to:
After 31 December 2010, Catalist Non-Sponsored issuers will be delisted and removed from the Official List. Pursuant to Rule 1404(2), issuers will be required to offer a reasonable exit alternative, which should normally be in cash, to:
(i) Its shareholders; and
(ii) Holders of any other classes of listed securities to be delisted.
The issuers should normally appoint an independent financial adviser which need not be an approved sponsor to advise on the exit offer.
The delisting will take effect after completion of the exit offer.
The delisting will take effect after completion of the exit offer.
3. Catalist Transition Timetable
| No. | Transition Measure | Implementation Date |
| 1. | Quarterly progress report to SGX | 1 November 2008 |
| 2. | Quarterly progress update to investors | 1 January 2009 |
| 3. | Requirement to appoint a sponsor when undertaking certain corporate actions | 1 January 2009 |
| 4. | Transition Date | 5 February 2010 |
| 5. | Date of Suspension of Catalist Non-Sponsored issuers | 6 February 2010 |
| 6. | Date of Delisting | After 31 December 2010, subject to completion of exit offer |
Transitional Practice Note 1 Transitional Arrangements Regarding Accounting Standards
Cross-referenced from Rule 415
1. Introduction
1.1 On 26 March 2018, the Exchange replaced the reference to Singapore Financial Reporting Standards ("SFRS") with Singapore Financial Reporting Standards (International) ("SFRS(I)s") in Rule 415.
1.2 Rule 108(2) states that the Exchange may, from time to time, publish transitional arrangements in relation to any amended or new rule.
1.3 This Practice Note is published to clarify the transitional arrangements that will have effect under Rule 108(2).
2. Transitional Arrangements for Listing Applicants
2.1 Rule 415 requires that the financial statements submitted with the listing application by listing applicants must be prepared in accordance with SFRS(I)s, or International Financial Reporting Standard, or US Generally Accepted Accounting Principles.
2.2 For the purpose of paragraph 2.1, if a listing applicant submits the financial statements for financial years that begin before 1 January 2018, Rule 415 in respect of the financial statements submitted with the listing application will be deemed satisfied if the listing applicant satisfies the relevant requirements under Part 9 of the Fifth Schedule of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
3. Transitional Arrangements for Existing Issuers
3.1 For existing issuers, periodic financial reports for financial years that begin before 1 January 2018 may be prepared in accordance with SFRS, or International Financial Reporting Standard, or US Generally Accepted Accounting Principles.
4. SGX may amend, modify or supplement the above transitional arrangements.
Added on 26 March 201826 March 2018 and amended on 7 February 20207 February 2020 and 12 February 2021.
Transitional Practice Note 2 Transitional Arrangements Regarding Code of Corporate Governance 2018
| Details | Cross References |
| Issue Date: 28 November 2018 Effective Date: 1 January2019 1 January 2022 11 January 2023 | Rules 108(2), 406(3)(a), 406(3)(c), 406(3)(d)(i), 406(3)(d)(ii), 406(3)(d)(iii), 710, 720(4) and 1204(10) |
1. Introduction
1.1 On 6 August 2018, the Exchange amended the SGX-ST Listing Rules (Catalist) following the publication of the Code of Corporate Governance 2018 by the Monetary Authority of Singapore ("MAS"). The Code of Corporate Governance 2018 applies to annual reports covering financial years commencing from 1 January 2019.
1.2. As part of the amendments to the Code of Corporate Governance 2018, certain guidelines from the Code of Corporate Governance 2012 were shifted into the SGX-ST Listing Rules (Catalist) for mandatory compliance.
1.3. This Transitional Practice Note is published to establish transitional arrangements for certain of the guidelines shifted into the SGX-ST Listing Rules (Catalist).
2. Arrangements
2.1. The following transitional arrangements will apply:—
Listing Rule | Subject | Effective Date | Transitional Arrangement |
| 710 | Issuer to describe in its annual report its corporate governance practices with specific reference to the principles and provisions of the Code of Corporate Governance 2018 | Financial year commencing on or after 1 January 2019 | For any financial year commencing on or after 1 January 2019, an issuer must describe its corporate governance practices with specific reference to the principles and provisions of the Code of Corporate Governance 2018, in accordance with the amendments to Rule 710 ("Amended Rule 710"). The first batch of annual reports which would have to comply with Amended Rule 710 will likely be issued in 2020 or thereafter. For a financial year commencing prior to 1 January 2019, an issuer may describe its corporate governance practices with specific reference to the principles of the Code of Corporate Governance 2012, in accordance with Rule 710 prior to the relevant amendments. Alternatively, an issuer may elect to adopt Amended Rule 710 early, by describing its corporate governance practices with specific reference to the principles and provisions of the Code of Corporate Governance 2018, in accordance with Amended Rule 710. In this scenario, the issuer should state in its annual report that it is adopting Amended Rule 710 in advance, and would not need to make reference to the Code of Corporate Governance 2012. |
| 1204(10) | The annual report must contain the board's comment on the adequacy and effectiveness of the issuer's internal controls (including financial, operational, compliance and information technology controls ) and risk management systems | Financial year commencing on or after 1 January 2019 | As the issuer may require time to establish its internal controls and risk management systems in accordance with the amendments to Rule 1204(10) ("Amended Rule 1204(10)"), the disclosures required in Amended Rule 1204(10) need only be provided in the annual report for financial years commencing on or after 1 January 2019. The first batch of annual reports which would have to comply with Amended Rule 1204(10) will likely be issued in 2020 or thereafter. |
| 720(4) | All directors must submit themselves for re-nomination and re-appointment at least once every three years | 1 January 2019 | With effect from 1 January 2019, all directors, including executive directors, must submit themselves for re-nomination and re-appointment at least once every three years. (a) Existing directors appointed or re-appointed before 1 January 2019 -Within three years of the effective date of this rule, a director appointed or re-appointed before 1 January 2019 must submit himself for re-nomination and re-appointment to the board at a general meeting (i.e. no later than 31 December 2021). As an illustration, if a director was appointed or re-appointed on 30 April 2017, he will have to submit himself for re-nomination and re-appointment to the board by 31 December 2021. As another illustration, if a director has not been subject to re-nomination and re-appointment at least once every three years for any reason prior to 1 January 2019, he will have to submit himself for re-nomination and re-appointment to the board by 31 December 2021. (b) Directors appointed or re-appointed on or after 1 January 2019 A director appointed or re-appointed to the board on or after 1 January 2019 must submit himself for re-nomination and re-appointment to the board at a general meeting by the end of the calendar year of the third anniversary of his appointment or re-appointment. As an illustration, if a director was appointed or re-appointed on 30 April 2019, he will have to submit himself for re-nomination and re-appointment to the board at a general meeting in 2022. This rule will apply to any director appointed or re-appointed to the board including all executive directors. |
| 406(3)(a) | A director who has no prior experience as a director of an issuer listed on the Exchange must undergo training in the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange. | 1 January 2019 | A person with no prior experience as a director of an issuer listed on the Exchange (a "First-time Director") and whose date of appointment to the board of directors is on or after 1 January 2019, must undergo training in the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange. Prior to 1 January 2019, Guideline 1.6 of the Code of Corporate Governance 2012 will operate on a comply-or-explain basis. Guideline 1.6 of the Code of Corporate Governance 2012 states that the issuer should provide training for first-time directors in areas such as accounting, legal and industry-specific knowledge as appropriate. |
| 406(3)(c) | Independent directors must comprise at least one-third of the issuer's board | 1 January 2022 | The number of independent directors must comprise at least one-third of the issuer's board at any time on or after 1 January 2022. To ensure compliance with this requirement, the issuer must ensure that the requisite number of independent directors are appointed prior to 1 January 2022. For example, the issuer may do so at the issuer's annual general meeting in 2021. Issuers should also note the independence tests set out in Rule 406(3)(d) and for which transitional arrangements are set out in this Transitional Practice Note. Prior to 1 January 2022, Guideline 2.1 of the Code of Corporate Governance 2012 will operate on a comply-or-explain basis. Guideline 2.1 of the Code of Corporate Governance 2012 states that there should be a strong and independent element on the Board, with independent directors making up at least one-third of the Board. |
| 406(3)(d)(i) | Director will not be independent if he is employed by the issuer or any of its related corporations for the current or any of the past three financial years | 1 January 2019 | On or after 1 January 2019, a director will not be independent under the circumstances set out in Rule 406(3)(d)(i). |
| 406(3)(d)(ii) | Director will not be independent if he has an immediate family member who is employed or has been employed by the issuer or any of its related corporations for the past three financial years, and whose remuneration is determined by the remuneration committee of the issuer | 1 January 2019 | On or after 1 January 2019, a director will not be independent under the circumstances set out in Rule 406(3)(d)(ii). |
| 406(3)(d)(iii) | This Rule was deleted on 11 January 2023. |
3. SGX may amend, modify or supplement the above transitional arrangements.
Added on 1 January 20221 January 2022 and amended on 11 January 2023.
Transitional Practice Note 3 Transitional Arrangements Regarding the Tenure Limit for Independent Directors
1. Introduction
1.1 On 11 January 2023, the Exchange amended the SGX–ST Listing Rules (Catalist) to prescribe a nine-year tenure limit for independent directors. Rule 406(3)(d)(iii) was deleted and Rule 406(3)(d)(iv) was inserted.
1.2 Rule 406(3)(d)(iii) stated that a director will not be independent if he has been a director of the issuer for an aggregate period of more than nine years (whether before or after listing) and his continued appointment as an independent director has not been sought and approved in separate resolutions by (A) all shareholders; and (B) shareholders, excluding the directors and the chief executive officer of the issuer, and associates of such directors and chief executive officer.
1.3 Rule 406(3)(d)(iv) states that a director will not be independent if he has been a director of the issuer for an aggregate period of more than nine years (whether before or after listing). Such director may continue to be considered independent until the conclusion of the next annual general meeting of the issuer. Rule 406(3)(d)(iv) takes effect for an issuer's annual general meeting for the financial year ending on or after 31 December 2023.
1.4 This Transitional Practice Note is published to establish transitional arrangements for the application of these Rules between 11 January 2023 and the date of the issuer's annual general meeting for the financial year ending on or after 31 December 2023 (the "Transitional Period").
2. Arrangements
2.1 As of the date of an issuer's annual general meeting for the financial year ending on or after 31 December 2023, a director (whether independent, executive or non-executive) who has served on the board of an issuer for an aggregate period of nine years will no longer be eligible to be designated as an independent director of the issuer, as set out in Rule 406(3)(d)(iv). This includes any person who has been a director of the issuer (whether independent, executive or non-executive) for an aggregate period of more than nine years and had previously retired from the board.
2.2 During the Transitional Period, directors who have served for more than nine years can remain as independent directors so long as they meet the requirements in Rules 406(3)(d)(i) and 406(3)(d)(ii). Rule 406(3)(d)(iii) does not apply during the Transitional Period, including for directors who are re-appointed during this Transitional Period.
2.3 For example, if a person has been a director (whether independent, executive or non-executive) of an issuer for an aggregate period of more than nine years and his term expires during the Transitional Period, the person may remain as an independent director of the issuer if he is re-elected. Rule 406(3)(d)(iii) does not apply to his or her re-election during the Transitional Period. However, the person must resign from the board or be designated as a non-independent director no later than at the annual general meeting of the issuer for the financial year ending on or after 31 December 2023.
Added on 11 January 2023.
Board Matters
THE BOARD'S CONDUCT OF AFFAIRS
Principle:
1 Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the long-term success of the company. The Board works with Management to achieve this objective and Management remains accountable to the Board.
Guidelines:
1.1 The Board's role is to:
(a) provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human resources are in place for the company to meet its objectives;
(b) establish a framework of prudent and effective controls which enables risks to be assessed and managed, including safeguarding of shareholders' interests and the company's assets;
(c) review management performance;
(d) identify the key stakeholder groups and recognise that their perceptions affect the company's reputation;
(e) set the company's values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met; and
(f) consider sustainability issues, e.g. environmental and social factors, as part of its strategic formulation.
1.2 All directors must objectively discharge their duties and responsibilities at all times as fiduciaries in the interests of the company.
1.3 The Board may delegate the authority to make decisions to any board committee but without abdicating its responsibility. Any such delegation should be disclosed.
1.4 The Board should meet regularly and as warranted by particular circumstances, as deemed appropriate by the board members. Companies are encouraged to amend their Articles of Association (or other constitutive documents) to provide for telephonic and video-conference meetings. The number of meetings of the Board and board committees held in the year, as well as the attendance of every board member at these meetings, should be disclosed in the company's Annual Report.
1.5 Every company should prepare a document with guidelines setting forth:
(a) the matters reserved for the Board's decision; and
(b) clear directions to Management on matters that must be approved by the Board.
The types of material transactions that require board approval under such guidelines should be disclosed in the company's Annual Report.
1.6 Incoming directors should receive comprehensive and tailored induction on joining the Board. This should include his duties as a director and how to discharge those duties, and an orientation program to ensure that they are familiar with the company's business and governance practices. The company should provide training for first-time director1 in areas such as accounting, legal and industry-specific knowledge as appropriate.
It is equally important that all directors should receive regular training, particularly on relevant new laws, regulations and changing commercial risks, from time to time.
The company should be responsible for arranging and funding the training of directors. The Board should also disclose in the company's Annual Report the induction, orientation and training provided to new and existing directors.
It is equally important that all directors should receive regular training, particularly on relevant new laws, regulations and changing commercial risks, from time to time.
The company should be responsible for arranging and funding the training of directors. The Board should also disclose in the company's Annual Report the induction, orientation and training provided to new and existing directors.
1.7 Upon appointment of each director, the company should provide a formal letter to the director, setting out the director's duties and obligations.
BOARD COMPOSITION AND GUIDANCE
Principle:
2 There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management and 10% shareholders2. No individual or small group of individuals should be allowed to dominate the Board's decision making.
Guidelines:
2.1 There should be a strong and independent element on the Board, with independent directors making up at least one-third of the Board.
2.2 The independent directors should make up at least half of the Board where:
(a) the Chairman of the Board (the "Chairman") and the chief executive officer (or equivalent) (the "CEO") is the same person;
(b) the Chairman and the CEO are immediate family3 members;
(c) the Chairman is part of the management team; or
(d) the Chairman is not an independent director.
2.3 An "independent" director is one who has no relationship with the company, its related corporations4, its 10% shareholders or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent business judgement with a view to the best interests of the company. The Board should identify in the company's Annual Report each director it considers to be independent. The Board should determine, taking into account the views of the Nominating Committee ("NC"), whether the director is independent in character and judgement and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director's judgement. Directors should disclose to the Board any such relationship as and when it arises. The Board should state its reasons if it determines that a director is independent notwithstanding the existence of relationships or circumstances which may appear relevant to its determination, including the following:
(a) a director being employed by the company or any of its related corporations for the current or any of the past three financial years;
(b) a director who has an immediate family member who is, or has been in any of the past three financial years, employed by the company or any of its related corporations and whose remuneration is determined by the remuneration committee;
(c) a director, or an immediate family member, accepting any significant compensation from the company or any of its related corporations for the provision of services, for the current or immediate past financial year, other than compensation for board service;
(d) a director:
(i) who, in the current or immediate past financial year, is or was; or
(ii) whose immediate family member, in the current or immediate past financial year, is or was,
a 10%shareholder of, or a partner in (with 10% or more stake), or an executive officer of, or a director of, any organisation to which the company or any of its subsidiaries made, or from which the company or any of its subsidiaries received, significant payments or material services (which may include auditing, banking, consulting and legal services), in the current or immediate past financial year. As a guide, payments5 aggregated over any financial year in excess of S$200,000 should generally be deemed significant;
(e) a director who is a 10% shareholder or an immediate family member of a 10% shareholder of the company; or
(f) a director who is or has been directly associated with6 a 10% shareholder of the company, in the current or immediate past financial year.
The relationships set out above are not intended to be exhaustive, and are examples of situations which would deem a director to be not independent. If the Board wishes, in spite of the existence of one or more of these relationships, to consider the director as independent, it should disclose in full the nature of the director's relationship and bear responsibility for explaining why he should be considered independent.
2.4 The independence of any director who has served on the Board beyond nine years from the date of his first appointment should be subject to particularly rigorous review. In doing so, the Board should also take into account the need for progressive refreshing of the Board. The Board should also explain why any such director should be considered independent.
2.5 The Board should examine its size and, with a view to determining the impact of the number upon effectiveness, decide on what it considers an appropriate size for the Board, which facilitates effective decision making. The Board should take into account the scope and nature of the operations of the company, the requirements of the business and the need to avoid undue disruptions from changes to the composition of the Board and board committees. The Board should not be so large as to be unwieldy.
2.6 The Board and its board committees should comprise directors who as a group provide an appropriate balance and diversity of skills, experience, gender and knowledge of the company. They should also provide core competencies such as accounting or finance, business or management experience, industry knowledge, strategic planning experience and customer-based experience or knowledge.
2.7 Non-executive directors should:
(a) constructively challenge and help develop proposals on strategy; and
(b) review the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance.
2.8 To facilitate a more effective check on Management, non-executive directors are encouraged to meet regularly without the presence of Management.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Principle:
3 There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company's business. No one individual should represent a considerable concentration of power.
Guidelines:
3.1 The Chairman and the CEO should in principle be separate persons, to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making. The division of responsibilities between the Chairman and the CEO should be clearly established, set out in writing and agreed by the Board. In addition, the Board should disclose the relationship between the Chairman and the CEO if they are immediate family members.
3.2 The Chairman should:
(a) lead the Board to ensure its effectiveness on all aspects of its role;
(b) set the agenda and ensure that adequate time is available for discussion of all agenda items, in particular strategic issues;
(c) promote a culture of openness and debate at the Board;
(d) ensure that the directors receive complete, adequate and timely information;
(e) ensure effective communication with shareholders;
(f) encourage constructive relations within the Board and between the Board and Management;
(g) facilitate the effective contribution of non-executive directors in particular; and
(h) promote high standards of corporate governance.
The responsibilities set out above provide guidance and should not be taken as a comprehensive list of all the duties and responsibilities of a Chairman.
3.3 Every company should appoint an independent director to be the lead independent director where:
(a) the Chairman and the CEO is the same person;
(b) the Chairman and the CEO are immediate family members;
(c) the Chairman is part of the management team; or
(d) the Chairman is not an independent director.
The lead independent director (if appointed) should be available to shareholders where they have concerns and for which contact through the normal channels of the Chairman, the CEO or the chief financial officer (or equivalent) (the "CFO") has failed to resolve or is inappropriate.
3.4 Led by the lead independent director, the independent directors should meet periodically without the presence of the other directors, and the lead independent director should provide feedback to the Chairman after such meetings.
BOARD MEMBERSHIP
Principle:
4 There should be a formal and transparent process for the appointment and re-appointment of directors to the Board.
Guidelines:
4.1 The Board should establish a NC to make recommendations to the Board on all board appointments, with written terms of reference which clearly set out its authority and duties. The NC should comprise at least three directors, the majority of whom, including the NC Chairman, should be independent. The lead independent director, if any, should be a member of the NC. The Board should disclose in the company's Annual Report the names of the members of the NC and the key terms of reference of the NC, explaining its role and the authority delegated to it by the Board
4.2 The NC should make recommendations to the Board on relevant matters relating to:
(a) the review of board succession plans for directors, in particular, the Chairman and for the CEO;
(b) the development of a process for evaluation of the performance of the Board, its board committees and directors;
(c) the review of training and professional development programs for the Board; and
(d) the appointment and re-appointment of directors (including alternate directors, if applicable).
Important issues to be considered as part of the process for the selection, appointment and re-appointment of directors include composition and progressive renewal of the Board and each director's competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation and candour) including, if applicable, as an independent director. All directors should be required to submit themselves for re-nomination and re-appointment at regular intervals and at least once every three years.
4.3 The NC is charged with the responsibility of determining annually, and as and when circumstances require, if a director is independent, bearing in mind the circumstances set forth in Guidelines 2.3 and 2.4 and any other salient factors. If the NC considers that a director who has one or more of the relationships mentioned therein can be considered independent, it shall provide its views to the Board for the Board's consideration. Conversely, the NC has the discretion to consider that a director is not independent even if he does not fall under the circumstances set forth in Guideline 2.3 or Guideline 2.4, and should similarly provide its views to the Board for the Board's consideration.
4.4 When a director has multiple board representations, he must ensure that sufficient time and attention is given to the affairs of each company. The NC should decide if a director is able to and has been adequately carrying out hisduties as a director of the company, taking into consideration the director's number of listed company board representations and other principal commitments7. Guidelines should be adopted that address the competing time commitments that are faced when directors serve on multiple boards. The Board should determine the maximum number of listed company board representations which any director may hold, and disclose this in the company's Annual Report.
4.5 Boards should generally avoid approving the appointment of alternate directors. Alternate directors should only be appointed for limited periods in exceptional cases such as when a director has a medical emergency. If an alternate director is appointed, the alternate director should be familiar with the company affairs, and be appropriately qualified. If a person is proposed to be appointed as an alternate director to an independent director, the NC and the Board should review and conclude that the person would similarly qualify as an independent director, before his appointment as an alternate director. Alternate directors bear all the duties and responsibilities of a director.
4.6 A description of the process for the selection, appointment and re-appointment of directors to the Board should be disclosed in the company's Annual Report. This should include disclosure on the search and nomination process.
4.7 Key information regarding directors, such as academic and professional qualifications, shareholding in the company and its related corporations, board committees served on (as a member or chairman), date of first appointment as a director, date of last re-appointment as a director, directorships or chairmanships both present and those held over the preceding three years in other listed companies, and other principal commitments, should be disclosed in the company's Annual Report. In addition, the company's annual disclosure on corporate governance should indicate which directors are executive, non-executive or considered by the NC to be independent. The names of the directors submitted for appointment or re-appointment should also be accompanied by details and information to enable shareholders to make informed decisions. Such information, which should also accompany the relevant resolution, would include:
(a) any relationships including immediate family relationships between the candidate and the directors, the company or its 10% shareholders;
(b) a separate list of all current directorships in other listed companies; and
(c) details of other principal commitments.
BOARD PERFORMANCE
Principle:
5 There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board.
Guidelines:
5.1 Every Board should implement a process to be carried out by the NC for assessing the effectiveness of the Board as a whole and its board committees and for assessing the contribution by the Chairman and each individual director to the effectiveness of the Board. The Board should state in the company's Annual Report how the assessment of the Board, its board committees and each director has been conducted. If an external facilitator has been used, the Board should disclose in the company's Annual Report whether the external facilitator has any other connection with the company or any of its directors. This assessment process should be disclosed in the company's Annual Report.
5.2 The NC should decide how the Board's performance may be evaluated and propose objective performance criteria. Such performance criteria, which allow for comparison with industry peers, should be approved by the Board and address how the Board has enhanced long-term shareholder value. These performance criteria should not be changed from year to year, and where circumstances deem it necessary for any of the criteria to be changed, the onus should be on the Board to justify this decision.
5.3 Individual evaluation should aim to assess whether each director continues to contribute effectively and demonstrate commitment to the role (including commitment of time for meetings of the Board and board committees, and any other duties). The Chairman should act on the results of the performance evaluation, and, in consultation with the NC, propose, where appropriate, new members to be appointed to the Board or seek the resignation of directors.
ACCESS TO INFORMATION
Principle:
6 In order to fulfil their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.
Guidelines:
6.1 Management has an obligation to supply the Board with complete, adequate information in a timely manner. Relying purely on what is volunteered by Management is unlikely to be enough in all circumstances and further enquiries may be required if the particular director is to fulfil his duties properly. Hence, the Board should have separate and independent access to Management. Directors are entitled to request from Management and should be provided with such additional information as needed to make informed decisions. Management shall provide the same in a timely manner.
6.2 Information provided should include board papers and related materials, background or explanatory information relating to matters to be brought before the Board, and copies of disclosure documents, budgets, forecasts and monthly internal financial statements. In respect of budgets, any material variance between the projections and actual results should also be disclosed and explained.
6.3 Directors should have separate and independent access to the company secretary. The role of the company secretary should be clearly defined and should include responsibility for ensuring that board procedures are followed and that applicable rules and regulations are complied with. Under the direction of the Chairman, the company secretary's responsibilities include ensuring good information flows within the Board and its board committees and between Management and non-executive directors, advising the Board on all governance matters, as well as facilitating orientation and assisting with professional development as required. The company secretary should attend all board meetings.
6.4 The appointment and the removal of the company secretary should be a matter for the Board as a whole.
6.5 The Board should have a procedure for directors, either individually or as a group, in the furtherance of their duties, to take independent professional advice, if necessary, and at the company's expense.
1 A first time director is a director who has no prior experience as a director of a listed company.
2 The term "10% shareholder" shall refer to a person who has an interest or interests in one or more voting shares in the company and the total votes attached to that share, or those shares, is not less than 10% of the total votes attached to all the voting shares in the company. "Voting shares" exclude treasury shares.
3 The term "immediate family" shall have the same meaning as currently defined in the Listing Manual of the Singapore Exchange (the "Listing Manual"), i.e. the person's spouse, child, adopted child, step-child, brother, sister and parent.
4 The term "related corporation", in relation to the company, shall have the same meaning as currently defined in the Companies Act, i.e. a corporation that is the company's holding company, subsidiary or fellow subsidiary.
5 Payments for transactions involving standard services with published rates or routine and retail transactions and relationships (for instance credit card or bank or brokerage or mortgage or insurance accounts or transactions) will not be taken into account, unless special or favourable treatment is accorded.
6 A director will be considered "directly associated" with a 10% shareholder when the director is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the 10% shareholder in relation to the corporate affairs of the corporation. A director will not be considered "directly associated" with a 10% shareholder by reason only of his or her appointment having been proposed by that 10% shareholder.
7 The term "principal commitments" shall include all commitments which involve significant time commitment such as full-time occupation, consultancy work, committee work, non-listed company board representations and directorships and involvement in non-profit organisations. Where a director sits on the boards of non-active related corporations, those appointments should not normally be considered principal commitments.
Remuneration Matters
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
Principle:
7 There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.
Guidelines:
7.1 The Board should establish a Remuneration Committee ("RC") with written terms of reference which clearly set out its authority and duties. The RC should comprise at least three directors, the majority of whom, including the RC Chairman, should be independent. All of the members of the RC should be non-executive directors. This is to minimise the risk of any potential conflict of interest. The Board should disclose in the company's Annual Report the names of the members of the RC and the key terms of reference of the RC, explaining its role and the authority delegated to it by the Board.
7.2 The RC should review and recommend to the Board a general framework of remuneration for the Board and key management personnel8. The RC should also review and recommend to the Board the specific remuneration packages for each director as well as for the key management personnel. The RC's recommendations should be submitted for endorsement by the entire Board. The RC should cover all aspects of remuneration, including but not limited to director's fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind.
7.3 If necessary, the RC should seek expert advice inside and/or outside the company on remuneration of all directors. The RC should ensure that existing relationships, if any, between the company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants. The company should also disclose the names and firms of the remuneration consultants in the annual remuneration report, and include a statement on whether the remuneration consultants have any such relationships with the company.
7.4 The RC should review the company's obligations arising in the event of termination of the executive directors' and key management personnel's contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous. The RC should aim to be fair and avoid rewarding poor performance.
LEVEL AND MIX OF REMUNERATION
Principle:
8 The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.
Guidelines:
8.1 A significant and appropriate proportion of executive directors' and key management personnel's remuneration should be structured so as to link rewards to corporate and individual performance.Such performance-related remuneration should be aligned with the interests of shareholders and promote the long-term success of the company. It should take account of the risk policies of the company, be symmetric with risk outcomes and be sensitive to the time horizon of risks. There should be appropriate and meaningful measures for the purpose of assessing executive directors' and key management personnel's performance.
8.2 Long-term incentive schemes are generally encouraged for executive directors and key management personnel. The RC should review whether executive directors and key management personnel should be eligible for benefits under long-term incentive schemes. The costs and benefits of long-term incentive schemes should be carefully evaluated. In normal circumstances, offers of shares or grants of options or other forms of deferred remuneration should vest over a period of time. The use of vesting schedules, whereby only a portion of the benefits can be exercised each year, is also strongly encouraged. Executive directors and key management personnel should be encouraged to hold their shares beyond the vesting period, subject to the need to finance any cost of acquiring the shares and associated tax liability.
8.3 The remuneration of non-executive directors should be appropriate to the level of contribution, taking into account factors such as effort and time spent, and responsibilities of the directors. Non-executive directors should not be over-compensated to the extent that their independence may be compromised. The RC should also consider implementing schemes to encourage non-executive directors to hold shares in the company so as to better align the interests of such non-executive directors with the interests of shareholders.
8.4 Companies are encouraged to consider the use of contractual provisions to allow the company to reclaim incentive components of remuneration from executive directors and key management personnel in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial loss to the company.
DISCLOSURE ON REMUNERATION
Principle:
9 Every company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company's Annual Report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance.Guidelines:
9.1 The company should report to the shareholders each year on the remuneration of directors, the CEO and at least the top five key management personnel (who are not also directors or the CEO) of the company. This annual remuneration report should form part of, or be annexed to the company's annual report of its directors. It should be the main means through which the company reports to shareholders on remuneration matters.
The annual remuneration report should include the aggregate amount of any termination, retirement and post-employment benefits that may be granted to directors, the CEO and the top five key management personnel (who are not directors or the CEO).
The annual remuneration report should include the aggregate amount of any termination, retirement and post-employment benefits that may be granted to directors, the CEO and the top five key management personnel (who are not directors or the CEO).
9.2 The company should fully disclose the remuneration of each individual director and the CEO on a named basis. For administrative convenience, the company may round off the disclosed figures to the nearest thousand dollars. There should be a breakdown (in percentage or dollar terms) of each director's and the CEO's remuneration earned through base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives.
9.3 The company should name and disclose the remuneration of at least the top five key management personnel (who are not directors or the CEO) in bands of S$250,000. Companies need only show the applicable bands. There should be a breakdown (in percentage or dollar terms) of each key management personnel's remuneration earned through base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives.
In addition, the company should disclose in aggregate the total remuneration paid to the top five key management personnel (who are not directors or the CEO).
As best practice, companies are also encouraged to fully disclose the remuneration of the said top five key management personnel.
In addition, the company should disclose in aggregate the total remuneration paid to the top five key management personnel (who are not directors or the CEO).
As best practice, companies are also encouraged to fully disclose the remuneration of the said top five key management personnel.
9.4 For transparency, the annual remuneration report should disclose the details of the remuneration of employees who are immediate family members of a director or the CEO, and whose remuneration exceeds S$50,000 during the year. This will be done on a named basis with clear indication of the employee's relationship with the relevant director or the CEO. Disclosure of remuneration should be in incremental bands of S$50,000. The company need only show the applicable bands.
9.5 The annual remuneration report should also contain details of employee share schemes to enable their shareholders to assess the benefits and potential cost to the companies. The important terms of the share schemes should be disclosed, including the potential size of grants, methodology of valuing stock options, exercise price of options that were granted as well as outstanding, whether the exercise price was at the market or otherwise on the date of grant, market price on the date of exercise, the vesting schedule, and the justifications for the terms adopted.
9.6 For greater transparency, companies should disclose more information on the link between remuneration paid to the executive directors and key management personnel, and performance. The annual remuneration report should set out a description of performance conditions to which entitlement to short-term and long-term incentive schemes are subject, an explanation on why such performance conditions were chosen, and a statement of whether such performance conditions are met.
8 The term "key management personnel" shall mean the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company.
Accountability and Audit
ACCOUNTABILITY
Principle:
10 The Board should present a balanced and understandable assessment of the company's performance, position and prospects.
Guidelines:
10.1 The Board's responsibility to provide a balanced and understandable assessment of the company's performance, position and prospects extends to interim and other price sensitive public reports, and reports to regulators (if required).
10.2 The Board should take adequate steps to ensure compliance with legislative and regulatory requirements, including requirements under the listing rules of the securities exchange, for instance, by establishing written policies where appropriate.
10.3 Management should provide all members of the Board with management accounts and such explanation and information on a monthly basis and as the Board may require from time to time to enable the Board to make a balanced and informed assessment of the company's performance, position and prospects.
RISK MANAGEMENT AND INTERNAL CONTROLS
Principle:
11 The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders' interests and the company's assets,and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.
Guidelines:
11.1 The Board should determine the company's levels of risk tolerance and risk policies, and oversee Management in the design, implementation and monitoring of the risk management and internal control systems.
11.2 The Board should, at least annually, review the adequacy and effectiveness of the company's risk management and internal control systems, including financial, operational, compliance and information technology controls. Such review can be carried out internally or with the assistance of any competent third parties.
11.3 The Board should comment on the adequacy and effectiveness of the internal controls, including financial, operational, compliance and information technology controls, and risk management systems, in the company's Annual Report. The Board's commentary should include information needed by stakeholders to make an informed assessment of the company's internal control and risk management systems.
The Board should also comment in the company's Annual Report on whether it has received assurance from the CEO and the CFO:
The Board should also comment in the company's Annual Report on whether it has received assurance from the CEO and the CFO:
(a) that the financial records have been properly maintained and the financial statements give a true and fair view of the company's operations and finances; and
(b) regarding the effectiveness of the company's risk management and internal control systems.
11.4 The Board may establish a separate board risk committee or otherwise assess appropriate means to assist it in carrying out its responsibility of overseeing the company's risk management framework and policies.
AUDIT COMMITTEE
Principle:
12 The Board should establish an Audit Committee ("AC") with written terms of reference which clearly set out its authority and duties.9
Guidelines:
12.1 The AC should comprise at least three directors, the majority of whom, including the AC Chairman, should be independent. All of the members of the AC should be non-executive directors. The Board should disclose in the company's Annual Report the names of the members of the AC and the key terms of reference of the AC, explaining its role and the authority delegated to it by the Board.
12.2 The Board should ensure that the members of the AC are appropriately qualified to discharge their responsibilities. At least two members, including the AC Chairman, should have recent and relevant accounting or related financial management expertise or experience, as the Board interprets such qualification in its business judgement.
12.3 The AC should have explicit authority to investigate any matter within its terms of reference, full access to and co-operation by Management and full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions properly.
12.4 The duties of the AC should include:
(a) reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the company and any announcements relating to the company's financial performance;
(b) reviewing and reporting to the Board at least annually the adequacy and effectiveness of the company's internal controls, including financial, operational, compliance and information technology controls (such review can be carried out internally or with the assistance of any competent third parties);
(c) reviewing the effectiveness of the company's internal audit function;
(d) reviewing the scope and results of the external audit, and the independence and objectivity of the external auditors; and
(e) making recommendations to the Board on the proposals to the shareholders on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditors.
12.5 The AC should meet (a) with the external auditors, and (b) with the internal auditors, in each case without the presence of Management, at least annually.
12.6 The AC should review the independence of the external auditors annually and should state (a) the aggregate amount of fees paid to the external auditors for that financial year, and (b) a breakdown of the fees paid in total for audit and non-audit services respectively, or an appropriate negative statement, in the company's Annual Report. Where the external auditors also supply a substantial volume of non-audit services to the company, the AC should keep the nature and extent of such services under review, seeking to maintain objectivity.
12.7 The AC should review the policy and arrangements by which staff of the company and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The AC's objective should be to ensure that arrangements are in place for such concerns to be raised and independently investigated, and for appropriate follow-up action to be taken. The existence of a whistle-blowing policy should be disclosed in the company's Annual Report, and procedures for raising such concerns should be publicly disclosed as appropriate.
12.8 The Board should disclose a summary of all the AC's activities in the company's Annual Report. The Board should also disclose in the company's Annual Report measures taken by the AC members to keep abreast of changes to accounting standards and issues which have a direct impact on financial statements.
12.9 A former partner or director of the company's existing auditing firm or auditing corporation should not act as a member of the company's AC: (a) within a period of 12 months commencing on the date of his ceasing to be a partner of the auditing firm or director of the auditing corporation; and in any case (b) for as long as he has any financial interest in the auditing firm or auditing corporation.
INTERNAL AUDIT
Principle:
13 The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.
Guidelines:
13.1 The Internal Auditor's primary line of reporting should be to the AC Chairman although the Internal Auditor would also report administratively to the CEO. The AC approves the hiring, removal, evaluation and compensation of the head of the internal audit function, or the accounting / auditing firm or corporation to which the internal audit function is outsourced. The Internal Auditor should have unfettered access to all the company's documents, records, properties and personnel, including access to the AC.
13.2 The AC should ensure that the internal audit function is adequately resourced and has appropriate standing within the company. For the avoidance of doubt, the internal audit function can be in-house, outsourced to a reputable accounting/auditing firm or corporation, or performed by a major shareholder, holding company or controlling enterprise with an internal audit staff.
13.3 The internal audit function should be staffed with persons with the relevant qualifications and experience.
13.4 The Internal Auditor should carry out its function according to the standards set by nationally or internationally recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.
13.5 The AC should, at least annually, review the adequacy and effectiveness of the internal audit function.
9 The Board may wish to refer to the sample terms of reference contained in the Guidebook for Audit Committees in Singapore issued by the Audit Committee Guidance Committee which was established on 15 January 2008 by the Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority and Singapore Exchange Limited to develop practical guidance for audit committees of listed companies.
Shareholders Rights and Responsibilities
SHAREHOLDER RIGHTS
Principle:
14 Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the exercise of shareholders' rights, and continually review and update such governance arrangements.
Guidelines:
14.1 Companies should facilitate the exercise of ownership rights by all shareholders. In particular, shareholders have the right to be sufficiently informed of changes in the company or its business which would be likely to materially affect the price or value of the company's shares.
14.2 Companies should ensure that shareholders have the opportunity to participate effectively in and vote at general meetings of shareholders. Shareholders should be informed of the rules, including voting procedures, that govern general meetings of shareholders.
14.3 Companies should allow corporations which provide nominee or custodial services to appoint more than two proxies so that shareholders who hold shares through such corporations can attend and participate in general meetings as proxies.
COMMUNICATION WITH SHAREHOLDERS
Principle:
15 Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders.
Guidelines:
15.1 Companies should devise an effective investor relations policy to regularly convey pertinent informationto shareholders. In disclosing information, companies should be as descriptive, detailed and forthcoming as possible, and avoid boilerplate disclosures.
15.2 Companies should disclose information on a timely basis through SGXNET and other information channels, including a well-maintained and updated corporate website. Where there is inadvertent disclosure made to a select group, companies should make the same disclosure publicly to all others as promptly as possible
15.3 The Board should establish and maintain regular dialogue with shareholders, to gather views or inputs, and address shareholders' concerns.
15.4 The Board should state in the company's Annual Report the steps it has taken to solicit and understand the views of the shareholders e.g. through analyst briefings, investor roadshows or Investors' Day briefings.
15.5 Companies are encouraged to have a policy on payment of dividends and should communicate it to shareholders. Where dividends are not paid, companies should disclose their reasons.
CONDUCT OF SHAREHOLDER MEETINGS
Principle:
16 Companies should encourage greater shareholder participation at general meetings of shareholders, and allow shareholders the opportunity to communicate their views on various matters affecting the company.
Guidelines:
16.1 Shareholders should have the opportunity to participate effectively in and to vote at general meetings of shareholders. Companies should make the appropriate provisions in their Articles of Association (or other constitutive documents) to allow for absentia voting at general meetings of shareholders.
16.2 There should be separate resolutions at general meetings on each substantially separate issue. Companies should avoid "bundling" resolutions unless the resolutions are interdependent and linked so as to form one significant proposal.
16.3 All directors should attend general meetings of shareholders. In particular, the Chairman of the Board and the respective Chairman of the AC, NC and RC should be present and available to address shareholders' queries at these meetings. The external auditors should also be present to address shareholders' queries about the conduct of audit and the preparation and content of the auditors' report.
16.4 Companies should prepare minutes of general meetings that include substantial and relevant comments or queries from shareholders relating to the agenda of the meeting, and responses from the Board and Management, and to make these minutes available to shareholders upon their request.
16.5 Companies should put all resolutions to vote by poll and make an announcement of the detailed results showing the number of votes cast for and against each resolution and the respective percentages. Companies are encouraged to employ electronic polling.
Glossary
The following terms, unless the context requires otherwise, have the following meanings:
| Term | Meaning | |
| "AC" | : | Audit Committee |
| "AC Chairman" | : | Chairman of the AC |
| "Board" | : | The board of directors of the company |
| "CEO" | : | Chief executive officer or equivalent |
| "CFO" | : | Chief financial officer or equivalent |
| "Chairman" | : | Chairman of the Board |
| "Companies Act" | : | Companies Act (Chapter 50 of the statutes of Singapore) |
| "directly associated" | : | A director will be considered "directly associated" to a 10% shareholder when the director is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the 10% shareholderin relation to the corporate affairs of the corporation. A director will not be considered "directly associated" to a 10% shareholder by reason only of his appointment having been proposed by that 10% shareholder |
| "immediate family" | : | As currently defined in the Listing Manual, to mean the person's spouse, child, adopted child, step-child, brother, sister and parent |
| "key management personnel" | : | The CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company |
| "Listing Manual" | : | The listing manual of the Singapore Exchange |
| "Management" | : | The management of the company |
| "NC" | : | Nominating Committee |
| "NC Chairman" | : | Chairman of the NC |
| "principal commitments" | : | Includes all commitments which involve significant time commitment such as full-time occupation, consultancy work, committee work, non-listed company board representations and directorships and involvement in non-profit organisations. Where a director sits on the Boards of non-active related corporations, those appointments should not normally be considered principal commitments |
| "related corporation" | : | In relation to the company, as currently defined in the Companies Act, to mean a corporation that is the company's holding company, subsidiary or fellow subsidiary |
| "RC" | : | Remuneration Committee |
| "RC Chairman" | : | Chairman of the RC |
| "10% shareholder" | : | A person who has an interest or interests in one or more voting shares in the company; and the total votes attached to that share, or those shares, is not less than 10% of the total votes attached to all the voting shares in the company. "Voting shares" exclude treasury shares |
Reference to any gender shall include reference to any other gender, unless the context otherwise requires
Disclosure of Corporate Governance Arrangements
The Listing Manual requires listed companies to describe in their company's Annual Reports their corporate governance practices with specific reference to the principles of the Code, as well as disclose and explain any deviation from any guideline of the Code. Companies should make a positive confirmation at the start of the corporate governance section of the company's Annual Report that they have adhered to the principles and guidelines of the Code, or specify each area of non-compliance. Many of these guidelines are recommendations for companies to disclose their corporate governance arrangements. For ease of reference, the specific principles and guidelines in the Code with express disclosure requirements are set out below:
| • Delegation of authority, by the Board to any board committee, to make decisions on certain board matters | Guideline 1.3 |
| • The number of meetings of the Board and board committees held in the year, as well as the attendance of every board member at these meetings | Guideline 1.4 |
| • The type of material transactions that require board approval under guidelines | Guideline 1.5 |
| • The induction, orientation and training provided to new and existing directors | Guideline 1.6 |
| • The Board should identify in the company's Annual Report each director it considers to be independent. Where the Board considers a director to be independent in spite of the existence of a relationship as stated in the Code that would otherwise deem a director not to be independent, the nature of the director's relationship and the reasons for considering him as independent should be disclosed | Guideline 2.3 |
| • Where the Board considers an independent director, who has served on the Board for more than nine years from the date of his first appointment, to be independent, the reasons for considering him as independent should be disclosed. | Guideline 2.4 |
| • Relationship between the Chairman and the CEO where they are immediate family members | Guideline 3.1 |
| • Names of the members of the NC and the key terms of reference of the NC, explaining its role and the authority delegated to it by the Board | Guideline 4.1 |
| • The maximum number of listed company board representations which directors may hold should be disclosed | Guideline 4.4 |
| • Process for the selection, appointment and re-appointment of new directors to the Board, including the search and nomination process | Guideline 4.6 |
| • Key information regarding directors, including which directors are executive, non-executive or considered by the NC to be independent | Guideline 4.7 |
| • The Board should state in the company's Annual Report how assessment of the Board, its board committees and each director has been conducted. If an external facilitator has been used, the Board should disclose in the company's Annual Report whether the external facilitator has any other connection with the company or any of its directors. This assessment process should be disclosed in the company's Annual Report | Guideline 5.1 |
| • Names of the members of the RC and the key terms of reference of the RC, explaining its role and the authority delegated to it by the Board | Guideline 7.1 |
| • Names and firms of the remuneration consultants (if any) should be disclosed in the annual remuneration report, including a statement on whether the remuneration consultants have any relationships with the company | Guideline 7.3 |
| • Clear disclosure of remuneration policies, level and mix of remuneration, and procedure for setting remuneration | Principle 9 |
| • Remuneration of directors, the CEO and at least the top five key management personnel (who are not also directors or the CEO) of the company. The annual remuneration report should include the aggregate amount of any termination, retirement and post-employment benefits that may be granted to directors, the CEO and the top five key management personnel (who are not directors or the CEO) | Guideline 9.1 |
| • Fully disclose the remuneration of each individual director and the CEO on a named basis. There will be a breakdown (in percentage or dollar terms) of each director's and the CEO's remuneration earned through base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives | Guideline 9.2 |
| • Name and disclose the remuneration of at least the top five key management personnel (who are not directors or the CEO) in bands of S$250,000. There will be a breakdown (in percentage or dollar terms) of each key management personnel's remuneration earned through base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives. In addition, the company should disclose in aggregate the total remuneration paid to the top five key management personnel (who are not directors or the CEO). As best practice, companies are also encouraged to fully disclose the remuneration of the said top five key management personnel | Guideline 9.3 |
| • Details of the remuneration of employees who are immediate family members of a director or the CEO, and whose remuneration exceeds S$50,000 during the year. This will be done on a named basis with clear indication of the employee's relationship with the relevant director or the CEO. Disclosure of remuneration should be in incremental bands of S$50,000 | Guideline 9.4 |
| • Details and important terms of employee share schemes | Guideline 9.5 |
| • For greater transparency, companies should disclose more information on the link between remuneration paid to the executive directors and key management personnel, and performance. The annual remuneration report should set out a description of performance conditions to which entitlement to short-term and long-term incentive schemes are subject, an explanation on why such performance conditions were chosen, and a statement of whether such performance conditions are met | Guideline 9.6 |
| • The Board should comment on the adequacy and effectiveness of the internal controls, including financial, operational, compliance and information technology controls, and risk management systems The commentary should include information needed by stakeholders to make an informed assessment of the company's internal control and risk management systems The Board should also comment on whether it has received assurance from the CEO and the CFO: (a) that the financial records have been properly maintained and the financial statements give true and fair view of the company's operations and finances; and (b) regarding the effectiveness of the company's risk management and internal control systems | Guideline 11.3 |
| • Names of the members of the AC and the key terms of reference of the AC, explaining its role and the authority delegated to it by the Board | Guideline 12.1 |
| • Aggregate amount of fees paid to the external auditors for that financial year, and breakdown of fees paid in total for audit and non-audit services respectively, or an appropriate negative statement | Guideline 12.6 |
| • The existence of a whistle-blowing policy should be disclosed in the company's Annual Report | Guideline 12.7 |
| • Summary of the AC's activities and measures taken to keep abreast of changes to accounting standards and issues which have a direct impact on financial statements | Guideline 12.8 |
| • The steps the Board has taken to solicit and understand the views of the shareholders e.g. through analyst briefings, investor roadshows or Investors' Day briefings | Guideline 15.4 |
| • Where dividends are not paid, companies should disclose their reasons. | Guideline 15.5 |
The Role of Shareholders in Engaging with Companies in which they Invest
The Code on Corporate Governance focuses on providing principles and guidelines to listed companies and their Boards to spur them towards a high standard of corporate governance. To ensure that these standards are achieved and sustained in practice, active and constructive shareholder relations is crucial. Bearing in mind the diversity of shareholders in a listed company and their differing investment objectives, this statement sets out certain broad views on the role of shareholders.
The objective of creating sustainable and financially sound enterprises that offer long-term value to shareholders is best served through a constructive relationship between shareholders and the Boards of companies.
Shareholder inputs on governance matters are useful to strengthen the overall environment for good governance policies and practices, and convey shareholders' expectations to the Board. By constructively engaging with the Board, shareholders can help to set the tone and expectation for governance of the company.
A shareholder's vote at general meetings is a direct way of expressing views and expectations to the Board. Hence, shareholders should exercise their right to attend general meetings and vote responsibly. Where relevant, shareholders should communicate to the Board their reasons for disagreeing with any proposal tabled at a general meeting.
Where appropriate, specific shareholder groups and their associations are encouraged to consider adopting international best practices. Initiatives by relevant industry associations or organisations to develop guidelines on their roles as shareholders of listed companies will be welcomed.
For the avoidance of doubt, this statement does not form part of the Code of Corporate Governance. It is aimed at enhancing the quality of engagement between shareholders and companies, so as to help drive higher standards of corporate governance and improve long-term returns to shareholders.
Introduction
1. Corporate governance refers to having the appropriate people, processes and structures to direct and manage the business and affairs of the company to enhance long-term shareholder value, whilst taking into account the interests of other stakeholders. Companies that embrace the tenets of good governance, including accountability, transparency and sustainability, are more likely to engender investor confidence and achieve long-term sustainable business performance.
2. The Code of Corporate Governance (the "Code"), which is applicable to listed companies in Singapore on a comply-or-explain basis, first came into effect on 1 January 2003. The Code aims to promote high levels of corporate governance in Singapore by putting forth Principles of good corporate governance and Provisions with which companies are expected to comply. The Practice Guidance complements the Code by providing guidance on the application of the Principles and Provisions and setting out best practices for companies. Adoption of the Practice Guidance is voluntary.
3. The Code takes as its starting point a recognition that the Board has the dual role of setting strategic direction, and of setting the company's approach to governance. This includes establishing an appropriate culture, values and ethical standards of conduct at all levels of the company. The role of the Board is therefore broader than that of providing oversight. A well-constituted Board fosters more complete discussions, leading to better decisions and enhanced business performance. This version of the Code expands on the need for a strong and independent element on the Board, along with a diverse skill set.
4. Given the centrality of the Board to good corporate governance, it is fundamental that the Chairman of the Board (the "Chairman") sets the right tone. The Chairman should encourage a full and frank exchange of views, drawing out contributions from all directors so that the debate benefits from the full diversity of views around the boardroom table. The Chairman should seek to stimulate and engender a robust yet collegiate setting, set the right ethical and behavioural tone, and provide leadership to the Board.
5. Good corporate governance is good for the company, with a well-governed company better placed to perform over the longer-term. The Code should not be seen as burdensome but should help companies by giving clear direction on good Board and Management practices that will help build investor and stakeholder confidence. For this outcome, a culture of substantive compliance, rather than a checklist approach, is crucial. A sustainably successful company is good for myriad stakeholders: employees, suppliers, customers, shareholders, as well as society at large.
Comply or explain
6. This updated version of the Code represents a significant development both in terms of the way the Code is structured, and the way in which companies are required to describe their corporate governance practices.
7. This version of the Code has at its core broad Principles of corporate governance. Compliance with, and observation of, these Principles is mandatory. These Principles set out broadly accepted characteristics of good corporate governance. Companies are required1 to describe their corporate governance practices with reference to both the Principles and Provisions, and how the company's practices conform to the Principles.
8. The Provisions that underpin the Principles are designed to support compliance with the Principles. These Provisions, which replace the Guidelines of previous Codes, are drafted in a simple and direct manner, and describe the tenets of good corporate governance. Companies are expected to comply with the Provisions, and variations from Provisions are acceptable to the extent that companies explicitly state and explain how their practices are consistent with the aim and philosophy of the Principle in question. The explanations of variations should be comprehensive and meaningful.
9. The emphasis of the Code is for companies to provide thoughtful and meaningful explanations around their practices, and for investors to carefully consider these discussions as part of their engagements with companies. Frank and informed dialogue between companies and their shareholders is a central tenet of good corporate governance, and encourages more active stewardship. Better engagement between these parties will benefit the company and investors.
1 Rule 710 of the SGX Listing Rules (Mainboard) / Rule 710 of the SGX Listing Rules (Catalist)
Board Matters
THE BOARD'S CONDUCT OF AFFAIRS
Principle:
1 The company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.
Provisions:
1.1 Directors are fiduciaries who act objectively in the best interests of the company and hold Management accountable for performance. The Board puts in place a code of conduct and ethics, sets appropriate tone-from-the-top and desired organisational culture, and ensures proper accountability within the company. Directors facing conflicts of interest recuse themselves from discussions and decisions involving the issues of conflict.
1.2 Directors understand the company's business as well as their directorship duties (including their roles as executive, non-executive and independent directors). Directors are provided with opportunities to develop and maintain their skills and knowledge at the company's expense2. The induction, training and development provided to new and existing directors are disclosed in the company's annual report.
1.3 The Board decides on matters that require its approval and clearly communicates this to Management in writing. Matters requiring board approval are disclosed in the company's annual report.
1.4 Board committees, including Executive Committees (if any), are formed with clear written terms of reference setting out their compositions, authorities and duties, including reporting back to the Board. The names of the committee members, the terms of reference, any delegation of the Board's authority to make decisions, and a summary of each committee's activities, are disclosed in the company's annual report.
1.5 Directors attend and actively participate in Board and board committee meetings. The number of such meetings and each individual director's attendances at such meetings are disclosed in the company's annual report. Directors with multiple board representations ensure that sufficient time and attention are given to the affairs of each company.
1.6 Management provides directors with complete, adequate and timely information prior to meetings and on an on-going basis to enable them to make informed decisions and discharge their duties and responsibilities.
1.7 Directors have separate and independent access to Management, the company secretary, and external advisers (where necessary) at the company's expense. The appointment and removal of the company secretary is a decision of the Board as a whole.
BOARD COMPOSITION AND GUIDANCE
Principle:
2 The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.
Provisions:
2.1 An "independent" director3 is one who is independent in conduct, character and judgement, and has no relationship with the company, its related corporations4, its substantial shareholders5 or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director's independent business judgement in the best interests of the company6.
[Amended on 11 January 2023]
2.2 Independent directors make up a majority of the Board7 where the Chairman is not independent8.
2.3 Non-executive directors make up a majority of the Board.
2.4 The Board and board committees are of an appropriate size, and comprise directors who as a group provide the appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as to avoid groupthink and foster constructive debate. The board diversity policy and progress made towards implementing the board diversity policy, including objectives, are disclosed in the company's annual report9.
2.5 Non-executive directors and/or independent directors, led by the independent Chairman or other independent director as appropriate, meet regularly without the presence of Management. The chairman of such meetings provides feedback to the Board and/or Chairman as appropriate.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Principle:
3 There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.
Provisions:
3.1 The Chairman and the Chief Executive Officer ("CEO") are separate persons to ensure an appropriate balance of power, increased accountability, and greater capacity of the Board for independent decision making10.
3.2 The Board establishes and sets out in writing the division of responsibilities between the Chairman and the CEO.
3.3 The Board has a lead independent director to provide leadership in situations where the Chairman is conflicted, and especially when the Chairman is not independent. The lead independent director is available to shareholders where they have concerns and for which contact through the normal channels of communication with the Chairman or Management are inappropriate or inadequate.
BOARD MEMBERSHIP
Principle:
4 The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.
Provisions:
4.1 The Board establishes a Nominating Committee ("NC")11 to make recommendations to the Board on relevant matters relating to:
(a) the review of succession plans for directors, in particular the appointment and/or replacement of the Chairman, the CEO and key management personnel12;
(b) the process and criteria for evaluation of the performance of the Board, its board committees and directors;
(c) the review of training and professional development programmes for the Board and its directors; and
(d) the appointment and re-appointment13 of directors (including alternate directors, if any)14.
4.2 The NC comprises at least three directors, the majority of whom, including the NC Chairman, are independent. The lead independent director, if any, is a member of the NC.
4.3 The company discloses the process for the selection, appointment and re-appointment of directors to the Board, including the criteria used to identify and evaluate potential new directors and channels used in searching for appropriate candidates in the company's annual report.
4.4 The NC determines annually, and as and when circumstances require, if a director is independent, having regard to the circumstances set forth in Provision 2.1. Directors disclose their relationships with the company, its related corporations, its substantial shareholders or its officers, if any, which may affect their independence15, to the Board. If the Board, having taken into account the views of the NC, determines that such directors are independent notwithstanding the existence of such relationships, the company discloses the relationships and its reasons in its annual report.
4.5 The NC ensures that new directors are aware of their duties and obligations. The NC also decides if a director is able to and has been adequately carrying out his or her duties as a director of the company. The company discloses in its annual report the listed company directorships and principal commitments16 of each director, and where a director holds a significant number of such directorships and commitments, it provides the NC's and Board's reasoned assessment of the ability of the director to diligently discharge his or her duties.
BOARD PERFORMANCE
Principle:
5 The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.
Provisions:
5.1 The NC recommends for the Board's approval the objective performance criteria and process for the evaluation of the effectiveness of the Board as a whole, and of each board committee separately, as well as the contribution by the Chairman and each individual director to the Board.
5.2 The company discloses in its annual report how the assessments of the Board, its board committees and each director have been conducted, including the identity of any external facilitator and its connection, if any, with the company or any of its directors.
2 Rule 210(5)(a) of the SGX Listing Rules (Mainboard) / Rule 406(3)(a) of the SGX Listing Rules (Catalist) requires any director who has had no prior experience as a director of a listed company to undergo training in the roles and responsibilities of a listed company director.
3 Rule 1207(10B) of the SGX Listing Rules (Mainboard) / Rule 1204(10B) of the SGX Listing Rules (Catalist) requires the Board to identify in the company's annual report each director it considers to be independent.
4 The term "related corporation", in relation to the company, has the same meaning as currently defined in the Companies Act (Chapter 50) of Singapore, i.e. a corporation that is the company's holding company, subsidiary or fellow subsidiary.
5 A "substantial shareholder" is a shareholder who has an interest or interests in one or more voting shares (excluding treasury shares) in the company and the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all voting shares (excluding treasury shares) in the company, in line with the definition set out in section 2 of the Securities and Futures Act (Chapter 289) of Singapore.
6 A director who falls under the circumstances described in Rule 210(5)(d) of the SGX Listing Rules (Mainboard) / Rule 406(3)(d) of the SGX Listing Rules (Catalist) is not independent. The circumstances are as follows: (i) a director who has been employed by the company or any of its related corporations for the current or any of the past three financial years; (ii) a director who has an immediate family member who is, or has been in any of the past three financial years, employed by the company or any of its related corporations and whose remuneration is determined by the Remuneration Committee; (iii) [deleted]; and (iv) a director who has been a director of the company for an aggregate period of more than 9 years (whether before or after listing). Such director may continue to be considered independent until the conclusion of the next annual general meeting of the company. Rule 210(5)(d)(i) and (ii) of the SGX Listing Rules (Mainboard) / Rule 406(3)(d)(i) and (ii) of the SGX Listing Rules (Catalist) came into effect on 1 January 2019. Rule 210(5)(d)(iii) of the SGX Listing Rules (Mainboard) and Rule 406(3)(d)(iii) was deleted on 11 January 2023. Rule 210(5)(d)(iv) of the SGX Listing Rules (Mainboard) / Rule 406(3)(d)(iv) of the SGX Listing Rules (Catalist) takes effect at an issuer’s annual general meeting for the financial year ending on or after 31 December 2023; for further details on transitional arrangements, please refer to Transitional Practice Note 4 of the SGX Listing Rules (Mainboard) and Transitional Practice Note 3 of the SGX Listing Rules (Catalist).
7 Rule 210(5)(c) of the SGX Listing Rules (Mainboard) / Rule 406(3)(c) of the SGX Listing Rules (Catalist) requires independent directors to make up at least one-third of the Board. This rule came into effect on 1 January 2022.
8 The Chairman is not independent when (i) he or she is not an independent director, (ii) he or she is also the CEO, (iii) he or she and the CEO are immediate family members as defined in the Listing Manual of the Singapore Exchange (i.e. the person's spouse, child, adopted child, step-child, brother, sister and parent), (iv) he or she and the CEO have close family ties with each other (i.e. a familial relationship between two parties which extends beyond immediate family members and could influence the impartiality of the Chairman) as determined by the Nominating Committee, or (v) he or she is part of the Management team.
9 Rule 710A(1) of the SGX Listing Rules (Mainboard) / SGX Listing Rules (Catalist) requires issuers to maintain a board diversity policy that addresses gender, skills and experience, and any other relevant aspects of diversity. Rule 710A(2) of the SGX Listing Rules (Mainboard) / SGX Listing Rules (Catalist) further requires the issuer to describe in its annual report its board diversity policy, including the following: (a) the issuer’s targets to achieve diversity on its board; (b) the issuer’s accompanying plans and timelines for achieving the targets; (c) the issuer’s progress towards achieving the targets within the timelines; and (d) a description of how the combination of skills, talents, experience and diversity of its directors serves the needs and plans of the issuer.
10 Rule 1207(10A) of the SGX Listing Rules (Mainboard) / Rule 1204(10A) of the SGX Listing Rules (Catalist) requires the Board to disclose the relationship between the Chairman and the CEO if they are immediate family members.
11 Rule 210(5)(e) of the SGX Listing Rules (Mainboard) / Rule 406(3)(e) of the SGX Listing Rules (Catalist) requires companies to establish one or more committees as may be necessary to perform the functions of an Audit Committee, a Nominating Committee and a Remuneration Committee. Each committee formed has written terms of reference which clearly set out the authority and duties of the committee.
12 The term "key management personnel" shall mean the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company.
13 Rule 720(5) of the SGX Listing Rules (Mainboard) / Rule 720(4) of the SGX Listing Rules (Catalist) requires all directors to submit themselves for re-nomination and re-election at least once every three years.
14 Rule 720(6) of the SGX Listing Rules (Mainboard) / Rule 720(5) of the SGX Listing Rules (Catalist) requires key information on directors to be provided together with each resolution on the proposed appointment or re-appointment of directors.
15 Such relationships include business relationships which the director, his or her immediate family member, or an organisation which the director, or his or her immediate family member is a substantial shareholder, partner (with 5% or more stake), executive officer or director in has with the company or any of its related corporations, and the director's direct association with a substantial shareholder of the company, in the current and immediate past financial year. Where the director or his or her immediate family member, or a company that he, she or they are a substantial shareholder in, provides to or receives from the company or its subsidiaries any significant payments or material services, the amount and nature of the service is disclosed.
16 The term "principal commitments" includes all commitments which involve significant time commitment such as full-time occupation, consultancy work, committee work, non-listed company board representations and directorships and involvement in non-profit organisations. Where a director sits on the boards of non-active related corporations, those appointments should not normally be considered principal commitments.
Remuneration Matters
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
Principle:
6 The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.
Provisions:
6.1 The Board establishes a Remuneration Committee ("RC")17 to review and make recommendations to the Board on:
(a) a framework of remuneration for the Board and key management personnel; and
(b) the specific remuneration packages for each director as well as for the key management personnel.
6.2 The RC comprises at least three directors. All members of the RC are non-executive directors, the majority of whom, including the RC Chairman, are independent.
6.3 The RC considers all aspects of remuneration, including termination terms, to ensure they are fair.
6.4 The company discloses the engagement of any remuneration consultants and their independence in the company's annual report.
LEVEL AND MIX OF REMUNERATION
Principle:
7 The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.
Provisions:
7.1 A significant and appropriate proportion of executive directors' and key management personnel's remuneration is structured so as to link rewards to corporate and individual performance. Performance-related remuneration is aligned with the interests of shareholders and other stakeholders and promotes the long-term success of the company.
7.2 The remuneration of non-executive directors is appropriate to the level of contribution, taking into account factors such as effort, time spent, and responsibilities.
7.3 Remuneration is appropriate to attract, retain and motivate the directors to provide good stewardship of the company and key management personnel to successfully manage the company for the long term.
DISCLOSURE ON REMUNERATION
Principle:
8 The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.
Provisions:
8.1 The company discloses in its annual report the policy and criteria for setting remuneration, as well as names, amounts and breakdown of remuneration of:
(a) each individual director and the CEO18; and
[Amended on 11 January 2023]
(b) at least the top five key management personnel (who are not directors or the CEO) in bands no wider than S$250,000 and in aggregate the total remuneration paid to these key management personnel.
8.2 The company discloses the names and remuneration of employees who are substantial shareholders of the company, or are immediate family members of a director, the CEO or a substantial shareholder of the company, and whose remuneration exceeds S$100,000 during the year, in bands no wider than S$100,000, in its annual report. The disclosure states clearly the employee's relationship with the relevant director or the CEO or substantial shareholder.
8.3 The company discloses in its annual report all forms of remuneration and other payments and benefits, paid by the company and its subsidiaries to directors and key management personnel of the company. It also discloses details of employee share schemes.
17 Rule 210(5)(e) of the SGX Listing Rules (Mainboard) / Rule 406(3)(e) of the SGX Listing Rules (Catalist) requires companies to establish one or more committees as may be necessary to perform the functions of an Audit Committee, a Nominating Committee and a Remuneration Committee. Each committee formed should have written terms of reference which clearly set out the authority and duties of the committee.
18 For the financial years ending on or after 31 December 2024, Rule 1207(10D) of the SGX Listing Rules (Mainboard) / Rule 1204(10D) of the SGX Listing Rules (Catalist) requires issuers to disclose in their annual reports, the names, exact amounts and breakdown of remuneration paid to each individual director and the CEO by the issuer and its subsidiaries. Such breakdown must include (in percentage terms) base or fixed salary, variable or performance-related income or bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives.
Accountability and Audit
RISK MANAGEMENT AND INTERNAL CONTROLS
Principle:
9 The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders19.
Provisions:
9.1 The Board determines the nature and extent of the significant risks which the company is willing to take in achieving its strategic objectives and value creation. The Board sets up a Board Risk Committee to specifically address this, if appropriate.
9.2 The Board requires and discloses in the company's annual report that it has received assurance from:
(a) the CEO and the Chief Financial Officer ("CFO") that the financial records have been properly maintained and the financial statements give a true and fair view of the company's operations and finances; and
(b) the CEO and other key management personnel who are responsible, regarding the adequacy and effectiveness of the company's risk management and internal control systems.
AUDIT COMMITTEE
Principle:
10 The Board has an Audit Committee ("AC")20 which discharges its duties objectively.
Provisions:
10.1 The duties of the AC include:
(a) reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the company and any announcements relating to the company's financial performance;
(b) reviewing at least annually the adequacy and effectiveness of the company's internal controls and risk management systems;
(c) reviewing the assurance from the CEO and the CFO on the financial records and financial statements;
(d) making recommendations to the Board on: (i) the proposals to the shareholders on the appointment and removal of external auditors; and (ii) the remuneration and terms of engagement of the external auditors;
(e) reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the company's internal audit function; and
(f) reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated and appropriately followed up on. The company publicly discloses, and clearly communicates to employees, the existence of a whistle-blowing policy and procedures for raising such concerns.
10.2 The AC comprises at least three directors, all of whom are non-executive and the majority of whom, including the AC Chairman, are independent. At least two members, including the AC Chairman, have recent and relevant accounting or related financial management expertise or experience.
10.3 The AC does not comprise former partners or directors of the company's existing auditing firm or auditing corporation: (a) within a period of two years commencing on the date of their ceasing to be a partner of the auditing firm or director of the auditing corporation; and in any case, (b) for as long as they have any financial interest in the auditing firm or auditing corporation.
10.4 The primary reporting line of the internal audit function is to the AC, which also decides on the appointment, termination and remuneration of the head of the internal audit function. The internal audit function has unfettered access to all the company's documents, records, properties and personnel, including the AC, and has appropriate standing within the company.
10.5 The AC meets with the external auditors, and with the internal auditors, in each case without the presence of Management, at least annually.
19 Rule 610(5) and Rule 719(1) of the SGX Listing Rules (Mainboard) / Rule 407(4)(b) and Rule 719(1) of the SGX Listing Rules (Catalist) require the Board to comment on the adequacy and effectiveness of the company's internal controls and risk management systems, and the AC's concurrence with the Board's comments. Where either the Board or the AC comments that the issuer's group's internal controls or risk management systems have weaknesses, the issuer must provide clear disclosure on the weaknesses and the steps taken to address them.
20 Rule 210(5)(e) of the SGX Listing Rules (Mainboard) / Rule 406(3)(e) of the SGX Listing Rules (Catalist) requires companies to establish one or more committees as may be necessary to perform the functions of an audit committee, a nominating committee and a remuneration committee. Each committee formed should have written terms of reference which clearly set out the authority and duties of the committee.
Shareholder Rights and Engagement
SHAREHOLDER RIGHTS AND CONDUCT OF GENERAL MEETINGS
Principle:
11 The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders' rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects.
Provisions:
11.1 The company provides shareholders with the opportunity to participate effectively in and vote at general meetings of shareholders and informs them of the rules governing general meetings of shareholders.
11.2 The company tables separate resolutions at general meetings of shareholders on each substantially separate issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are "bundled", the company explains the reasons and material implications in the notice of meeting.
11.3 All directors attend general meetings of shareholders, and the external auditors are also present to address shareholders' queries about the conduct of audit and the preparation and content of the auditors' report. Directors' attendance at such meetings held during the financial year is disclosed in the company's annual report.
11.4 The company's Constitution (or other constitutive documents) allow for absentia voting at general meetings of shareholders.
11.5 The company publishes minutes of general meetings of shareholders on its corporate website as soon as practicable. The minutes record substantial and relevant comments or queries from shareholders relating to the agenda of the general meeting, and responses from the Board and Management.
11.6 The company has a dividend policy and communicates it to shareholders21.
ENGAGEMENT WITH SHAREHOLDERS
Principle:
12 The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.
Provisions:
12.1 The company provides avenues for communication between the Board and all shareholders, and discloses in its annual report the steps taken to solicit and understand the views of shareholders.
12.2 The company has in place an investor relations policy which allows for an ongoing exchange of views so as to actively engage and promote regular, effective and fair communication with shareholders.
12.3 The company's investor relations policy sets out the mechanism through which shareholders may contact the company with questions and through which the company may respond to such questions.
21 Rule 704(24) and Rule 704(23) of the SGX Listing Rules (Mainboard) / Rule 407(4)(b) and Rule 719(1) of the SGX Listing Rules (Catalist), require that in the event that the Board decides not to declare or recommend a dividend in respect of the full financial year, the company must expressly disclose the reason(s) for the decision together with the announcement of the financial statements for the full financial year.
Managing Stakeholders Relationships
Engagement with Stakeholders
Principle:
13 The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.
Provisions:
13.1 The company has arrangements in place to identify and engage with its material stakeholder groups and to manage its relationships with such groups.
13.2 The company discloses in its annual report its strategy and key areas of focus in relation to the management of stakeholder relationships during the reporting period.
13.3 The company maintains a current corporate website to communicate and engage with stakeholders.
Practice Guidance 1: Board Roles and Director Duties
Board's Role
The Board's role is to:
(a) provide entrepreneurial leadership, and set strategic objectives, which should include appropriate focus on value creation, innovation and sustainability;
(b) ensure that the necessary resources are in place for the company to meet its strategic objectives;
(c) establish and maintain a sound risk management framework to effectively monitor and manage risks, and to achieve an appropriate balance between risks and company performance;
(d) constructively challenge Management and review its performance;
(e) instil an ethical corporate culture and ensure that the company's values, standards, policies and practices are consistent with the culture; and
(f) ensure transparency and accountability to key stakeholder groups.
Scope of Director Duties
Directors should be aware of their duties at law, which includes acting in good faith and the best interests of the company; exercising due care, skills and diligence; and avoiding conflicts of interest. Directors should also put in place policies, structures and mechanisms to ensure compliance with legislative and regulatory requirements, establish appropriate tone-at-the-top, desired organisational culture and standards of ethical behaviour.
While the duties imposed by law are the same for all directors, a listed Board will generally have different classes of directors (executive, non-executive and independent directors) with different roles:
• Executive Directors (EDs) are usually members of senior management, and involved in the day-to-day running of the business. Executive directors are expected to:
(a) provide insights on the company's day-to-day operations, as appropriate;
(b) provide Management's views without undermining management accountability to the Board; and
(c) collaborate closely with non-executive directors for the long term success of the company.
• Non-Executive Directors (NEDs) are not part of Management. They are not employees of the company and do not participate in the company's day-to-day management. NEDs are expected to:
(a) be familiar with the business and stay informed of the activities of the company;
(b) constructively challenge Management and help develop proposals on strategy;
(c) review the performance of Management in meeting agreed goals and objectives; and
(d) participate in decisions on the appointment, assessment and remuneration of the executive directors and key management personnel generally.
• Independent Directors (IDs) are NEDs who are deemed independent by the Board (see Provision 2.1 and Practice Guidance 2 on criteria for director independence). IDs have the duties of the NEDs, and additionally provide an independent and objective check on Management. In certain cases, the SGX Listing Rules require IDs to make certain decisions and determinations. However, IDs should avoid focusing solely on the duties relating to compliance with rules. As with all directors, they are to act in the best interests of the company as a whole and not of any particular group of shareholders or stakeholders.
Conflicts of Interest
The Board should have clear policies and procedures for dealing with conflicts of interest. Where the director faces a conflict of interest, he or she should disclose this and recuse himself or herself from meetings and decisions involving the issue. For instance, if the Chairman of the Board (Chairman) is a member of the Nominating Committee (NC), he or she may face a conflict of interest on discussions relating to the succession of the Chairman and should thus recuse himself or herself from such discussions after providing his or her input to the NC on other matters.
Director Competencies
There should be formal communication from the company to each of the directors on their appointment and their roles, duties, obligations and responsibilities, and the expectations of the company. This includes each director developing his or her competencies to effectively discharge his or her duties.
To ensure that directors have the opportunities to develop their skills and knowledge, the Board should develop a policy and criteria for directors' development. The Chairman and the NC Chairman should jointly and regularly review and agree with each director his or her training and professional development needs.
Board Organisation and Support
The Board may form board committees, and decide the scope and the matters delegated to the board committees. Generally, all important decisions should be made at the Board level.
If the Board chooses to form an executive committee (EXCO) and delegate certain matters for the EXCO to decide, it is responsible for understanding the EXCO's discussions and endorsing the EXCO's decisions.
Management provides the Board with information for its meetings and decision making, including board papers and supporting information. In respect of budgets, any material variance between the projections and actual results should also be disclosed and explained.
Relying purely on what is volunteered by Management is unlikely to be enough in all circumstances and further enquiries may be required if the director is to fulfil his or her duties properly. Directors are entitled to request from Management and should be provided with such additional information as needed to make informed decisions. Management should provide the information in a timely manner.
The Board should be supported by the company secretary, whose role should be clearly defined. The company secretary's responsibilities include advising the Board on corporate and administrative matters, as well as facilitating orientation and assisting with professional development as required. The company secretary should attend all board meetings.
Practice Guidance 2: Board Composition and Guidance
Director Independence
There should be a strong and independent element on the Board.
An independent director (ID) should have no relationship (whether familial, business, financial, employment, or otherwise) with the company, its related corporations, substantial shareholders1 or officers, which could interfere or be perceived to interfere with the director's independent judgment.
Rule 210(5)(d) of the SGX Listing Rules (Mainboard)/ Rule 406(3)(d) of the SGX Listing Rules (Catalist) sets out the following specific circumstances in which a director should be deemed to be non-independent:
(a) a director who is or has been employed by the company or any of its related corporations for the current or any of the past three financial years;
(b) a director who has an immediate family member who is, or has been in any of the past three financial years, employed by the company or any of its related corporations and whose remuneration is determined by the Remuneration Committee (RC); and
(c) a director who has been a director of the company for an aggregate period of more than nine years (whether before or after listing). Such director may continue to be considered independent until the conclusion of the next annual general meeting of the company.2
In addition to these, the Nominating Committee (NC) and Board should consider the following circumstances in which a director should also be deemed to be non-independent:
(a) a director, or a director whose immediate family member, in the current or immediate past financial year, provided to or received from the company or any of its subsidiaries any significant payments or material services (which may include auditing, banking, consulting and legal services), other than compensation for board service. The amount and nature of the service, and whether it is provided on a one-off or recurring basis, are relevant in determining whether the service provided is material. As a guide, payments aggregated over any financial year in excess of S$50,000 should generally be deemed significant;
(b) a director, or a director whose immediate family member, in the current or immediate past financial year, is or was, a substantial shareholder or a partner in (with 5% or more stake), or an executive officer of, or a director of, any organisation which provided to or received from the company or any of its subsidiaries any significant payments or material services (which may include auditing, banking, consulting and legal services). The amount and nature of the service, and whether it is provided on a one-off or recurring basis, are relevant in determining whether the service provided is material. As a guide, payments3 aggregated over any financial year in excess of S$200,000 should generally be deemed significant irrespective of whether they constitute a significant portion of the revenue of the organisation in question; or
(c) a director who is or has been directly associated4 with a substantial shareholder of the company, in the current or immediate past financial year.
The above examples are not exhaustive and the NC and Board should determine whether there is any circumstance or relationship which might impact a director's independence, or the perception of his or her independence. Other than the circumstances set out in the SGX Listing Rules, these examples are meant to illustrate situations of likely non-independence and the NC and Board can still consider a director to be independent notwithstanding the existence of any of the above-mentioned situations. However, if the Board, having taking into account the view of the NC, does so, it has to fully disclose the nature of the director's relationship, and why the Board has determined the director to be independent.
Proportion of Non-Executive Directors
A key duty of the Board is to set objectives and goals for Management, monitor the results, and assess and remunerate Management on its performance. Executive directors who are part of Management may face conflicts of interest in these areas. To avoid undue influence of Management over the Board and ensure that appropriate checks and balances are in place, non-executive directors should comprise at least a majority of the Board.
Role of the Lead Independent Director
The lead independent director (Lead ID) plays an additional facilitative role within the Board, and where necessary, he or she may also facilitate communication between the Board and shareholders or other stakeholders of the company. The company should clearly communicate to shareholders and other stakeholders on how the Lead ID can be contacted.
The role of the Lead ID may include chairing Board meetings in the absence of the Chairman, working with the Chairman in leading the Board, and providing a channel to non-executive directors for confidential discussions on any concerns and to resolve conflicts of interest as and when necessary. In addition, the Lead ID may also help the NC conduct annual performance evaluation and develop succession plans for the Chairman and CEO and help the RC design and assess the Chairman's remuneration.
Board Diversity Policy
Principle 2 requires a board to have an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.
Provision 2.4 expands on the concepts of independence and diversity in Principle 2 by stating that the Board and board committees should be of an appropriate size, and comprise directors who as a group provide the appropriate balance and mix of skills, knowledge, experience, and other aspects of diversity such as gender and age, so as to avoid groupthink and foster constructive debate.
With effect from 1 January 2022, Rule 710A(1) of the SGX Listing Rules (Mainboard) / Rule 710A(1) of the SGX Listing Rules (Catalist) requires issuers to maintain a board diversity policy. The rules take reference from the elements of Provision 2.4, and state that a board diversity policy must address gender, skills and experience, and any other relevant aspects of diversity.
It is recognised that diversity is multi-dimensional in nature, encompassing various aspects. Certain aspects of diversity are widely tracked by investors and other stakeholders globally. The SGX Listing Rules ask that issuers maintain a board diversity policy that minimally addresses gender, skills and experience. Boards may incorporate other aspects of diversity as are relevant for the company.
To provide investors and other stakeholders with relevant information, Rule 710A(2) of the SGX Listing Rules (Mainboard) / Rule 710A(2) of the SGX Listing Rules (Catalist) also requires an issuer to include in the disclosure of its board diversity policy, the following:
(a) the issuer’s targets to achieve diversity on its Board;
(b) the issuer’s accompanying plans and timelines for achieving the targets;
(c) the issuer’s progress towards achieving the targets within the timelines; and
(d) a description of how the combination of skills, talents, experience and diversity of its directors serves the needs and plans of the issuer.
The NC is responsible for setting the board diversity policy, including the targets, plans and timelines, for the Board’s approval. The NC should review the progress towards meeting the policy targets and keep the Board updated.
The board diversity policy should have measurable targets that are numerical or quantitative, to be achieved within an appropriate timeline (for example, achieving specific numerical targets for female representation on its board within a specified time period). The accompanying plans for achieving the targets should describe the concrete steps that the company will undertake. Aspirational or qualitative targets (for example, ‘creating an inclusive culture’) may also be included, but these should also be accompanied with a description of the initiatives to be undertaken to translate the aspiration into results.
Companies should provide updates on their progress toward their targets by stating what they achieved within the year under report and what is to be achieved beyond the year under report. If companies face challenges in meeting their stated targets within the relevant timelines, they should provide an explanation and describe their plans to overcome these challenges. Companies should strive to build on their achievements each year, and may consider disclosing how their performance relative to their targets has changed over the years.
The description of how the Board’s combination of skills, talents, experience and diversity serves the needs and plans of the company should be made in the context of the company’s current plans and future strategy.
1 A "substantial shareholder" is a shareholder who has an interest or interests in one or more voting shares (excluding treasury shares) in the company and the total votes attached to that share, or those shares, is not less than 5% of the total votes attached to all voting shares (excluding treasury shares) in the company, in line with the definition set out in section 2 of the Securities and Futures Act (Chapter 289) of Singapore.
2 Rule 210(5)(d)(iv) of the SGX Listing Rules (Mainboard) / Rule 406(3)(d)(iv) of the SGX Listing Rules (Catalist) takes effect at an issuer’s annual general meeting held for the financial year ending on or after 31 December 2023. For further details on transitional arrangements, please refer to Transitional Practice Note 4 of the SGX Listing Rules (Mainboard) and Transitional Practice Note 3 of the SGX Listing Rules (Catalist).
3 Payments for transactions involving standard services with published rates or routine and retail transactions and relationships (for instance credit card or bank or brokerage or mortgage or insurance accounts or transactions) will not be taken into account, unless special or favourable treatment is accorded.
4 A director is considered "directly associated" with a substantial shareholder when he is accustomed or under the obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder in relation to the corporate affairs of the company. A director will not be considered "directly associated" with a substantial shareholder by reason only of his or her appointment having been proposed by that substantial shareholder.
Practice Guidance 3: Chairman and CEO
The separation of the role of the Chairman of the Board (Chairman) from that of the Chief Executive Officer (CEO) avoids concentration of power in one individual, and ensures a degree of checks and balances. Where the Nominating Committee determines that the Chairman and CEO share close family ties, the Chairman is not independent. Such ties include familial relationships beyond immediate family members that could influence the impartiality of the Chairman. Examples of these relationships include those of in-laws, cousins, aunts, uncles and grandparents.
The overall role of the Chairman is to lead and ensure the effectiveness of the Board. This includes:
(a) promoting a culture of openness and debate at the Board;
(b) facilitating the effective contribution of all directors; and
(c) promoting high standards of corporate governance.
Externally, the Chairman is the face of the Board, and should ensure effective communication with shareholders and other stakeholders.
Within the company, the Chairman should ensure appropriate relations within the Board, and between the Board and Management, in particular, between the Board and the CEO.
In the boardroom, the Chairman's responsibilities range from setting the Board agenda and conducting effective Board meetings, to ensuring that the culture in the boardroom promotes open interaction and contributions by all.
Practice Guidance 4: Board Membership
Selection, Appointment and Re-appointment Process
The process for the selection, appointment and re-appointment of directors should take into consideration the composition and progressive renewal of the Board, as well as each director's competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation and candour) including, if applicable, his or her performance as an independent director (ID).
The NC, which is responsible for making recommendations to the Board in relation to the appointment and / or re-appointment of directors, should go beyond the Board’s immediate circle of contacts and use a variety of channels including third party search firms, director associations or advertisements to identify a broader range of suitable candidates.
To facilitate investors' understanding of its nomination process, the Board should disclose the following in the corporate governance section of the company’s annual report:
(a) the channels used in the search and nomination process for identifying appropriate candidates, and the channel via which the eventual appointee was found; and
(b) the criteria used to identify and evaluate potential new directors, including the relevant experience and skillsets to the company's business which are considered, and whether broader search criteria such as diversity and technological expertise are also included.
The company should disclose how the Board, with its collection of skills, experience and diversity, meets the needs of the company.
Appointment of Alternate Directors
A director should take on a directorship appointment only if he or she is able to commit the time to discharge the duties of a director, one of which includes attending all Board meetings. Alternate directors4 should only be appointed in exceptional circumstances. In particular, companies should not appoint alternate directors for IDs.
Alternate directors bear all the duties and responsibilities of a director. All rules and procedures that apply to directors similarly apply to alternate directors.
Multiple Directorships
The responsibilities of a director of a listed company are complex and demanding. Directors need to make the substantial time commitment required to fulfill their responsibilities and duties to the company and its shareholders. A director with other major commitments can be, or be perceived to be, ineffective because he or she is unable to allocate sufficient time to properly discharge his or her duties on the Board.
The Board and Nominating Committee (NC) should therefore take into account the number of directorships and principal commitments of each director in assessing whether he is able to or has been adequately carrying out his or her duties. The Board and NC should establish guidelines on what a reasonable and maximum number of such directorships and principal commitments for each director (or type of director) should be. For instance, directors who are full-time executives could have less capacity to take on listed company directorships, as compared to retirees who may be able to focus entirely on directorships. In addition, an appointment as a non-executive chairman of a listed company would likely require more time and commitment as compared to other non-executive directorships.
The Board and NC should take into consideration whether a director had previously served on the board of a company with an adverse track record or with a history of irregularities or is or was under investigation by regulators, and seek clarity on the director’s involvement therein. The Board and NC should also assess whether a director’s resignation from the board of any such company casts any doubt on the director’s qualification and ability to act as a director of the Company.
The Board and NC should also consider other factors in determining the practicality of multiple directorships and principal commitments. For example, scheduling board and committee meetings may be challenging for a director sitting on four boards with similar financial year ends and/or reporting timelines.
Succession Planning
Provision 4.1(a) states that the NC should make recommendations to the Board on the review of succession planning for directors, in particular the Chairman and the CEO, as well as key management personnel (KMP).
It may be the practice in some companies for the CEO to take charge of the succession planning for KMP while the NC takes charge of succession planning for directors, the Chairman and the CEO. In such circumstances, the NC should still review the plans that the CEO has made for KMP succession.
Also, it may be the practice in some companies for a board committee other than the NC to review succession planning for KMP. The Board, having regard to the particular circumstances of the company, has the prerogative to determine that any other board committee should review the plans made for KMP succession.
In reviewing succession plans, it is necessary to have in mind the company’s strategic priorities and the factors affecting the long-term success of the company.
In relation to directors, the NC should aim to maintain an optimal Board composition by considering the trends affecting the company, reviewing the skills needed, and identifying gaps (which includes considering whether there is an appropriate level of diversity of thought). The NC may use these considerations to set appointment criteria for successors.
In relation to KMP succession, the NC, or such other committee determined by the Board, should take an active interest in how key talent is managed within the organization. The committee can consider reviewing the mechanisms for identifying strong candidates and developing them to take on senior positions in the future.
Different time horizons should be considered for succession planning as follows: (1) long-term planning, to identify competencies needed for the company’s strategy and objectives, (2) medium-term planning, for the orderly replacement of Board members and KMP, and (3) contingency planning, for preparedness against sudden and unforeseen changes.
4 An alternate director is generally a person who is appointed to attend Board meetings on behalf of a director when the latter (usually referred to as the principal director) is unable to attend. Section 4(1) of the Companies Act defines a "director" to include alternate directors.
Practice Guidance 5: Board Performance
The Nominating Committee (NC) should decide how the Board's performance may be evaluated and propose objective performance criteria.
The evaluation should consider the Board's composition (balance of skills, experience, independence, knowledge of the company, and diversity), Board practices and conduct, and how the Board as a whole adds value to the company. The performance criteria should be approved by the Board. The Board should consider the use of peer comparisons and other objective third party benchmarks. These performance criteria should not be changed from year to year, and where circumstances deem it necessary for any of the criteria to be changed, the onus should be on the Board to justify this decision.
The evaluation of individual director's performance should aim to assess whether each director is willing and able to constructively challenge and contribute effectively to the Board, and demonstrate commitment to his or her roles on the Board (including the roles of Chairman of the Board (Chairman) and chairman of a board committee). The Chairman should act on the results of the performance evaluation, and, in consultation with the NC, propose, where appropriate, new members to be appointed to the Board, or seek the resignation of directors.
To provide a greater level of objectivity in the evaluation process, the Board may consider the use of external facilitators in the performance assessment. Such facilitators should be independent of the company and its directors.
Practice Guidance 6: Procedures for Developing Remuneration Policies
There should be written terms of reference which clearly spell out authority and duties of the Remuneration Committee (RC). The Board should disclose in the company's annual report the names of the members of the RC and the key terms of reference of the RC, explaining its role and the authority delegated to it by the Board. While remuneration matters are deliberated in detail by the RC, its remit is only to make recommendations to the Board in relation to the framework of remuneration for the Board and key management personnel (KMP) and specific remuneration packages for each director and KMP.
The Board is ultimately accountable for all remuneration decisions. The RC considers all aspects of remuneration (including director's fees, salaries, allowances, bonuses, options, share-based incentives and awards, benefits in kind and termination payments) and should aim to be fair and avoid rewarding poor performance. The RC also reviews the company's obligations arising in the event of termination of the executive directors' and KMP's contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous.
The RC should comprise all non-executive directors, with the majority being independent directors to minimise conflicts of interest. If necessary, the RC should seek expert advice inside and/or outside the company on remuneration. A key aspect of remuneration is benchmarking with comparable organisations. Such data is often not available in-house. Where such advice is obtained, the company should disclose the name and firm of the remuneration consultant, if any, including whether the remuneration consultant has any relationship with the company that could affect his or her independence and objectivity.
Practice Guidance 7: Level and Mix of Remuneration
A company's remuneration framework should be tailored to the specific role and circumstances of each director and key management personnel (KMP). This ensures an appropriate remuneration level and mix that recognises the performance, potential and responsibilities of these individuals.
Performance-related remuneration schemes should take account of the risk policies of the company, be symmetric with risk outcomes and be sensitive to the time horizon of risks. There should be appropriate and meaningful measures for the purpose of assessing executive directors' and KMP's performance.
Performance should be measurable, appropriate and meaningful so that they incentivise the right behaviour and values that the company supports. For individuals in control functions (e.g. chief financial officer, chief risk officer, head of the internal audit function), performance measures should be principally based on the achievement of the objectives of their functions. While long-term incentive schemes are generally encouraged for executive directors and KMP, the costs and benefits of such schemes should be carefully evaluated. In normal circumstances, offers of shares or grants of options or other forms of deferred remuneration should vest over a period of time. The use of vesting schedules, whereby only a portion of the benefits can be exercised each year, is strongly encouraged. Executive directors and KMP should be encouraged to hold their shares beyond the vesting period, subject to the need to finance any cost of acquiring the shares and associated tax liability.
The Remuneration Committee should also consider implementing schemes to encourage non-executive directors (NEDs) to hold shares in the company so as to better align the interests of such NEDs with the interests of shareholders. However, NEDs should not be over-compensated to the extent that their independence may be compromised.
Companies should consider the use of contractual provisions to allow them to reclaim incentive components of remuneration from executive directors and KMP in exceptional circumstances, including for example, misstatement of financial results or misconduct resulting in financial loss to the company.
Practice Guidance 8: Disclosure on Remuneration
A company's annual remuneration report should form part of, or be annexed to, the company's annual report. It should be the main means through which the company reports to shareholders on all forms of remuneration and other payments and benefits, for directors and key management personnel (KMP), from itself and its subsidiaries, in respect of the financial year reported on. Companies should make the disclosure regardless of whether shareholder approval has been obtained.
Remuneration disclosures for individual directors and the Chief Executive Officer (CEO) should specify the names, amounts and breakdown of remuneration6.
Remuneration disclosures for at least the top five KMP (who are not directors or the CEO) should specify the names, amounts and breakdown of remuneration in bands no wider than S$250,000 (refer to illustrative examples below).
A breakdown (in percentage terms) of the remuneration earned by each director, the CEO and each of at least the top five KMP (who are not directors or the CEO) should include base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives. The disclosures on employee share schemes should cover the important terms such as the potential size of grants, methodology of valuing stock options, exercise price of options that were granted as well as outstanding, whether the exercise price was at the market or otherwise on the date of grant, market price on the date of exercise, the vesting schedule, and the justifications for the terms adopted.
In addition to the disclosure in aggregate of the total remuneration paid to at least the top five KMP (who are not directors or the CEO), the aggregate amount of any termination, retirement and post-employment benefits that may be granted to directors, the CEO and at least the top five KMP (who are not directors or the CEO) should be separately disclosed. In the case of a company with less than five KMP (who are not directors or the CEO), it is acceptable for the company to make the disclosure in respect of all KMP, with the appropriate explanation.
For administrative convenience, the company may round off the disclosed figures to the nearest thousand dollars. The disclosure of remuneration may be in bands no wider than S$250,000 for at least top five KMPs; and no wider than S$100,000 for employees who are substantial shareholders, or are immediate family members of a director, the CEO or a substantial shareholder.
Illustrative Examples of Banding:
A company has five KMP: V, W, X, Y and Z. The KMPs' remuneration are as follows: V is paid S$300,000; W is paid SS300,000; X is paid S$540,000; Y is paid S$650,000; and Z is paid S$1,005,000.
| Applicable bands | Top 5 KMP |
| ≥S$1,000,001–S$1,250,000 | Z |
| ≥S$500,001–S$750,000 | X, Y |
| ≥S$250,000–S$500,000 | V, W |
Disclosure of Relationships between Remuneration, Performance and Value Creation
To facilitate better understanding of the relationships between remuneration, performance and value creation, companies should adopt and disclose the following information:
• the company's definition of value creation for its stakeholders (including shareholders and other material stakeholders) and how it is measured;
• the process for formulating the remuneration policies, including the governance of the process;
• the way that remuneration is designed to drive corporate performance, including a description of why the indicators chosen are relevant to the company in the context of their strategy, or their desire to create value and generate shareholder returns;
• the way that remuneration is used to manage risk (e.g. remuneration that does not generate excessive risk taking and envisages reductions to remuneration for exceeding agreed risk limits);
• the way that performance is measured, including the types of financial and non-financial metrics adopted (e.g. Earnings Per Share (EPS), Total Shareholder Returns (TSR), Return On Equity (ROE), customer metrics, operational metrics, safety metrics);
• the way that personal performance is assessed and taken into account (e.g. the way that the officers create an appropriate work culture in the company, and the contributions of such officers to succession planning, and engagement with the regulatory authorities in the relevant industries in which the company operates in);
• the breakdown of those metrics as part of variable remuneration (e.g. 80% financial metrics split across 33% EPS, 33% TSR and 33% ROE; 20% non-financial metrics split across 40% Customer Satisfaction, 40% Safety Performance and 20% Employee Engagement);
• the metrics used, and why the metrics are appropriate (e.g. EPS growth of 6% compound, TSR of top quartile, ROE of 8%, zero Lost Time Injuries, 90% On Time Performance), including whether relative performance is measured against peers;
• the periods over which performance is assessed (e.g. three year performance period), including justification for why a shorter-term performance period is used for a long-term incentive plan, in instances where this is the case;
• payouts that can be achieved for hitting or exceeding these targets (e.g. 100% payout for median performance, 150% payout for top quartile, 50% payout for 90-percentile performance);
• the form of the payout, (e.g. whether in the form of shares or cash), along with holding periods, if any, for shares;
• the breakdown in company and individual performance outcomes and actual remuneration paid, including explanations where company and/or individual performance outcomes were not achieved yet remuneration was not adjusted in line with the remuneration policy;
• where discretion can be exercised by the Board and/or Remuneration Committee in determining the relationship between remuneration, performance and value creation;
• the existence of any gateways (or negative indicators) to pay-outs (e.g. whether, if the company received a highly critical regulatory report, long term incentives would nevertheless be fully payable because of achievement of profitability metrics); and
• the existence and structure of any clawbacks for malfeasance.
6 For the financial years ending on or after 31 December 2024, Rule 1207(10D) of the SGX Listing Rules (Mainboard) / Rule 1204(10D) of the SGX Listing Rules (Catalist) requires issuers to disclose in their annual reports, the names, exact amounts and breakdown of remuneration paid to each individual director and the CEO by the issuer and its subsidiaries. Such breakdown must include (in percentage terms) base or fixed salary, variable or performance-related income or bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives.
Practice Guidance 9: Risk Management and Internal Controls
The Board is responsible for the governance of risk, including determining the nature and extent of the significant risks which the company is willing to take.
The Board oversees the company's risk management framework and policies, and ensures that Management maintains a sound system of risk management and internal controls.
The Board may delegate responsibility for risk governance to a board committee, such as the Audit Committee or a separate Board Risk Committee.
The Board, with the assistance of a board committee (where established), should review, at least annually, the adequacy and effectiveness of the company's risk management and internal control systems and comment4 on the same in the company's annual report. Such a review can be carried out internally or with the assistance of any competent third parties.
The Board's commentary in the company's annual report should include:
(a) information needed by stakeholders to make an informed assessment of the company's risk management and internal control systems;
(b) a description of the principal risks (including financial, operational, compliance and information technology risk categories) facing the company and how they are being managed or mitigated;
(c) an explanation of the company's approach towards identifying, measuring and monitoring its key and emerging risks, and an elaboration of its approach towards the governance and management of these risks; and
(d) an explanation of how the Board has assessed the prospects of the company, over what period it has done so, and why the Board considers it to be appropriate to use that period.
4 Refer to Rules 610(5) and 1207(10) of the SGX Listing Rules (Mainboard) / Rules 407(4)(b) and 1204(10) of the SGX Listing Rules (Catalist); Main Board Practice Note 12.2/ Catalist Practice Note 21B—Internal Controls and Risk Management Systems.
Practice Guidance 10: Audit Committees
There should be written terms of reference which clearly spell out the authority and duties of the Audit Committee. The Board should disclose in the company's annual report the names of the members of the AC and the key terms of reference of the AC, explaining its role and the authority delegated to it by the Board.
The AC should have explicit authority to investigate any matter within its terms of reference, full access to and co-operation by Management, full discretion to invite any director or executive officer to attend its meetings, and reasonable resources to enable it to discharge its functions.
In respect of appointments and re-appointments of external auditors, the AC should evaluate the performance of the external auditor, taking into consideration the Audit Quality Indicators Disclosure Framework published by the Accounting and Corporate Regulatory Authority (ACRA).
The AC should make recommendations to the Board on establishing an adequate, effective and independent internal audit function. For the avoidance of doubt, the internal audit function can be in-house, outsourced to a reputable accounting/auditing firm or corporation, or performed by a major shareholder, holding company or controlling enterprise with an internal audit staff.
The AC should ensure that the internal audit function is adequately resourced and staffed with persons with the relevant qualifications and experience. The AC should also ensure that the internal auditors comply with the standards set by nationally or internationally recognised professional bodies.
The AC should report to the Board how it has discharged its responsibilities and whether it was able to discharge its duties independently. The activities the ACs should report to the Board include:
(a) the significant issues and judgements that the AC considered in relation to the financial statements, and how these issues were addressed. Where the external auditors, in their review or audit of the company's year-end financial statements, raise any significant issues (e.g. significant adjustments) which have a material impact on the interim financial statements or financial updates previously announced by the company, the AC should bring this to the Board's attention immediately1. The AC should also advise the Board if changes are needed to improve the quality of future interim financial statements or financial updates2, and;
(b) the AC's assessment of the adequacy and effectiveness of internal controls and risk management systems;
(c) the AC's assessment of the adequacy, effectiveness and independence of the internal audit function;
(d) the AC's assessment of the independence and objectivity of the external auditors, taking into consideration the requirements under the Accountants Act (Chapter 2) of Singapore, including but not limited to, the aggregate and respective fees paid for audit and non-audit services and the cooperation extended by Management to allow an effective audit;
(e) the AC's assessment of the quality of the work carried out by the external auditors, and the basis of such assessment, such as the use of ACRA's Audit Quality Indicators Disclosure Framework;
(f) the significant matters raised through the whistle-blowing channel.
1 The Board should then consider whether an immediate announcement is required under Rule 703 of the SGX Listing Rules (Mainboard) / Rule 703 of the SGX Listing Rules (Catalist).
2 Such changes (if any) should be disclosed in the company's annual report.
Practice Guidance 11: Shareholder Rights and Conduct of General Meetings
Dividend policy
The purpose of having and disclosing a dividend policy is to provide an account of how the board stewards the company’s income to create value for shareholders. A dividend policy explains how the cash generated by the company is allocated, the objectives, risks and constraints considered, and why the allocation is appropriate.
It is good for a company to announce its dividend policy as this is a factor that investors may generally consider when assessing the company’s expectations of future cash flows and the extent to which those cash flows can be used for reinvestment, may be available for dividends, or can be used for other purposes. This information is a relevant input into investors’ pricing of the company’s shares and can also attract potential investors that are looking for a particular type of company.
A company would normally consider various factors including its cash and reserves position, business prospects, capital commitments, and projected financial position in deciding whether to declare any dividend and, if so, the level of dividend to be declared. It is helpful to investors when companies that do not intend to distribute dividends nevertheless communicate their considerations for not doing so under their dividend policy disclosure and identify the circumstances that would allow them to do so in the future.
A dividend policy also provides useful information to assist investors in assessing the company’s expectations of cash flows, its ability and propensity to use that cash flows to pay dividends to investors and thus the suitability of the company’s shares as an investment to the investor. A disclosed dividend policy may encourage the company to exercise greater discipline and consistency in the distribution of dividends to shareholders.
It is appropriate to review the dividend policy regularly in light of the changing business environment. Factors to consider include capital expenditure needs, growth opportunities, business risk assessments, economic cycles, and changes in regulation or taxation.
Facilitating shareholder participation at general meetings
While companies are required to meet the minimum notice period for general meetings, companies should consider providing longer notice for meetings, especially when dealing with complex transactions, or where the company has numerous overseas shareholders.
Management is encouraged to make a presentation to shareholders to update them on the company's performance, position and prospects at general meetings. Presentation materials should be made available on SGXNET and the company's website for the benefit of shareholders.
In order to enhance shareholder participation in general meetings, companies should use their best endeavours to avoid scheduling meetings during peak periods when the meetings may coincide with those of other companies, especially if they have a large shareholder base. Companies should consider other avenues of engaging shareholders, such as through townhall meetings, briefings and roadshows, or webcasting meetings and allowing electronic online voting of shares.
Resolutions
In general, resolutions should not be bundled or made inter-conditional on each other. This is to ensure that shareholders are given the right to express their views and exercise their voting rights on each resolution separately. However, in situations where resolutions have to be inter-conditional (such as in meetings to approve a reverse takeover), the company should provide clear explanations.
Companies should provide the necessary information on each resolution to enable shareholders to exercise their vote on an informed basis. For resolutions on the election or re-election of directors, companies should provide sufficient information on the background of directors, their contributions to the company, and the board and committee positions they are expected to hold upon election.
Director involvement during general meetings
Directors should be present for the entire duration of general meetings. The Chairman of the meeting should facilitate constructive dialogue between shareholders and the Board, Management, external auditors and other relevant professionals. The Chairman should allow specific directors, such as board committee chairs or the lead independent director, to answer queries on matters related to their roles.
Directors should take the opportunity to interact with shareholders before and/or after general meetings.
Practice Guidance 12: Engagement with Shareholders
Communication between the Board and shareholders
Beneficial communications between the Board and shareholders would include interim updates that are in addition to the mandatory financial statements. Updates that shareholders would find useful include: a discussion of the significant factors that affected the company's interim performance, relevant market trends, and the foreseeable risks and opportunities that may have a material impact on the company's prospects. Such information provides shareholders a better understanding of the company's performance in the context of the current business environment.
Investor relations policy
Maintaining and disclosing an investor relations policy serves to facilitate effective two-way communication between the company and its shareholders. An investor relations policy informs shareholders on how the company will engage them (e.g. interim updates, as described above, or scheduled shareholder engagement events), and how they can communicate with the company (refer to “Mechanisms for contacting the company”, below). Implementing and publicizing these engagement channels on the company’s website enhances accessibility to shareholders.
A stated investor relations policy also helps to align the stakeholders within the company (e.g. the board, management and the personnel in charge of investor relations) with a coordinated approach to investor engagement.
Mechanisms for contacting the company
Companies should have a dedicated investor relations contact, via an online submission form, email address or contact number, through which shareholders are able to ask questions and receive responses in a timely manner. As shareholder concerns are different from business or customer issues, it is appropriate to have separate and dedicated investor relations contact points. It is also appropriate for these contact points to be operated by the company’s investor relations department or company secretary, as they are acquainted with the matters that investors would be concerned with. The board should have the investor relations function provide regular updates on the feedback received from investors.
Where the company has a lead independent director (Lead ID), the company should provide information as to how shareholders can contact the Lead ID directly, rather than having to go through the company.
Practice Guidance 13: Managing Stakeholder Relationships
In the execution of its duties, the Board should not only consider the company's obligations to its shareholders but also the interests of its material stakeholders. The relationships with material stakeholders may have an impact on the company's long term sustainability.
Stakeholders are parties who may be affected by the company's activities, or whose actions can affect the ability of the company to conduct its activities. The Board should determine the relevant stakeholders, and set policies in relation to material stakeholders identified.
It is accepted practice for sustainability reports to be used to engage stakeholders. The results of such engagements could also inform the contents of these reports.