The revamp unveiled yesterday would transform the bourse into a more vibrant marketplace, offering the sort of investment options now available only in financial centres like London and New York.

The 38 proposed changes outlined in the consultation paper ranged from fine-tuning regulations over new listings and disclosure to radical moves to admit different kinds of players to the SGX.

One ground-breaking proposal is to let promising biotech firms list even if they do not have a financial track record. The move could make Singapore the first stop for such firms in Asia.

The SGX also wants to attract fund managers to list 'blind pool funds'.

These place few restrictions on fund managers, who can invest the cash raised from investors pretty much how they like. Their popularity has soared in the United States because of the fat gains made during the bull run in recent years.

Market players welcomed the SGX proposals.

Dealer Francis Tan said biotech companies would make a welcome addition to the local bourse and enhance its appeal.

'These firms may give the SGX the same type of cutting edge over other bourses that contract manufacturers did 10 years ago,' he said.

While the SGX will allow biotech firms with no track record to list, it will protect shareholder interests by demanding that companies show they can attract funds from professional investors and generate revenue.

And after listing, they must give quarterly disclosures on the use of funds.

While the biotech plan attracted plenty of comment, it was the proposal on blind pool funds that captured the attention of professionals involved in initial public offerings.

One corporate lawyer said: 'Investment banks may find it more worthwhile to launch special investment vehicles, which give investors the opportunity to buy into many foreign firms, rather than undergo the onerous process of sponsoring only one listing. It saves time and money.'

The revamp also addresses the issue of safeguarding investor interests in reverse takeovers, which loss-making firms have adopted as a way of securing a new business - and a new lease of life.

The SGX wants a company's board to disclose the factors taken into consideration for accepting any profit guarantee made by the seller, and the safeguards available if the guarantee is not met.

It is also formalising a practice to impose a minimum price of 20 cents per share in a reverse takeover exercise.

Firms will also need shareholder consent if there is a fundamental change in their core business.

The SGX also wants to raise the bar on disclosure requirements when a firm makes a cash call by issuing new shares, warrants or convertible bonds.

It wants to know the type of investor being targeted and how the interests of existing shareholders have been accounted for.

Mr Kevin Scully, the managing director of boutique finance house NRA Capital, said the SGX proposals on profit guarantees will give investors added protection in reverse takeovers.

'Some companies take over the businesses they are acquiring by issuing shares and paying cash. This will help to spell out how a company can claim compensation if the profit guarantee is not met,' he said.

The SGX also wants to scrap a 40-year-old rule that requires a newly listed firm to have at least 1,000 shareholders. It proposes that the limit be cut to 500 investors.

'This is one rule listed companies will be glad to have. The SGX shows that it is moving with the times,' said a merchant banker.

engyeow@sph.com.sg