CPFIS cannot be used to buy shares on the SGX watchlist from March 2016

SINGAPORE - From March next year, Central Provident Fund (CPF) savings under the CPF Investment Scheme (CPFIS) cannot be used to purchase shares of firms that are on the Singapore Exchange (SGX) watchlist.

"This restriction serves to safeguard members' CPF savings as securities placed on the SGX watchlist could potentially be delisted," the CPF board said in a statement on Tuesday.

The March 1, 2016 deadline is in line with a new SGX rule that requires listed companies to have a minimum trading price of 20 cents. Firms listed on the SGX have a 12-month transition period to meet the new rule.

CPF members who have invested in securities prior to their being placed on the SGX watchlist can choose to hold or sell them or participate in corporate actions, subject to the prevailing CPFIS rules and limits for these securities.

The restriction will apply to securities placed on SGX watch-list and included under CPFIS which are ordinary shares, preference shares and property funds.

CPF savings may be used to purchase securities that have exited from the SGX watchlist if they also meet the shares or property funds inclusion criteria under CPFIS.

The criteria are:

a. The shares or property funds are offered by a company incorporated in Singapore;

b. The shares or property funds are listed on the Singapore Exchange Mainboard;

c. The shares or property funds are traded in Singapore dollars; and

d. The company allows CPF investors, who have pre-registered with CPF Agent Banks, to attend their shareholders' or unit holders' meetings as observers.