Singapore Exchange plans to widen powers against listing rule breaches

An office worker walks past a logo of the Singapore Stock Exchange (SGX) outside its premises in the financial district of Singapore in this April 23, 2014 file photo. The Singapore Exchange is seeking public feedback on the expansion of its enf
An office worker walks past a logo of the Singapore Stock Exchange (SGX) outside its premises in the financial district of Singapore in this April 23, 2014 file photo. The Singapore Exchange is seeking public feedback on the expansion of its enforcement powers against those that breach its listing rules, in a move that is aimed at boosting market discipline and deterring contra and speculative trading. -- PHOTO: REUTERS

The Singapore Exchange is seeking public feedback on the expansion of its enforcement powers against those that breach its listing rules, in a move that is aimed at boosting market discipline and deterring contra and speculative trading.

To that end, it is looking at setting up disciplinary, advisory and appeals committees for listings here.

The new disciplinary committee, which effectively will be made up of members of the existing SGX disciplinary committee, will be empowered to impose fines of up to $250,000 on listed companies for each breach of the listing rules, and restrict activities such as fund-raising.

The fine is capped at $1 million for any series of linked breaches that can include the failure to announce material information.

The move is meant to address concerns over SGX's dual role as a stock market operator, and a regulator.

The public is invited to submit their feedback by Oct 16 via LM@sgx.com.

Separately, the regulator is also seeking feedback on its proposed introduction of the minimum trading price (MTP) of 20 cents for mainboard listings and adjustments to existing watch-list requirements by March 2015, and for these to take effect March 2016.

Mainboard-listed firms whose share prices fall below 20 Singapore cents have until March 2019 to comply with the MTP requirement, failing which they would be delisted.

So far, a majority of some 220 companies out of 660 mainboard-listed firms that are affected by the MTP rule, have indicated that they would consider share consolidation, transfers to the Catalist board, or other corporate actions to comply with the MTP requirement.

Under the new rule, the company's volume-weighted average price (VWAP) must meet the MTP requirement of 20 cents or above. The VWAP is calculated based on the total value of securities traded for six months divided against total volume traded for six months. A quarterly review, which will be conducted to determine if the company is in compliance with MTP requirement, will be done on the first market day of March, June, September and December.

With the introduction of MTP and its designation as one of the criteria for entry into the SGX watch-list, where loss-making companies currently find themselves, the regulator is proposing adjustments to the existing watch-list framework.