Minimum trading price: Market cap test added

The Singapore Exchange (SGX) said last night it has received positive feedback to a proposal related to revised minimum trading price rules.

It is adding a market capitalisation test to the minimum trading price requirement for mainboard-listed firms.

A mainboard firm whose share price is below the minimum trading price of 20 cents, but has a six-month average daily market cap above $40 million, can avoid falling onto the SGX watch list under the new proposal.

The SGX said it has decided on a review every six months, in June and December each year, "as it strikes a balance between being too short-term and too protracted".

If they meet the criteria, companies on the watch list may submit applications to exit the list in March and September each year.

The revised minimum trading price criteria were made effective yesterday.

The SGX said a one-time review of the companies on the list, based on previous minimum trading price rules, was conducted on Thursday.

The SGX said 14 companies that did not meet the new criteria have been removed from the list, which has now 54 firms.

The first review of firms affected by the revised criteria is on June 1.

Firms on the list now, whose shares have six-month volume-weighted average price and market cap below the new price thresholds, will stay on the watchlist with what the SGX called "a 36-month cure period" starting from June 1.

Those that fail the new price thresholds will enter the list that day, said the SGX.

SGX chief regulatory officer Tan Boon Gin said in a statement: "We are always looking for ways to improve our regulatory framework to see if we can achieve the same desired outcome with a more refined and calibrated approach. We will continue to engage the industry to find an equilibrium between the highest regulatory standards and the associated cost of compliance."

Rachael Boon

A version of this article appeared in the print edition of The Straits Times on December 03, 2016, with the headline 'Minimum trading price: Market cap test added'. Print Edition | Subscribe