Firm rapped for not calling for trading halt

The SGX took private disciplinary action against a company for failing to call for a trading halt in a timely manner.

Unusual trading in the company's shares had taken place while it was in discussions over the possible termination of a major contract.

But the company requested a trading halt only after it was queried by the SGX.

SGX investigations showed that the company was first notified of the possible termination of the contract one day before it was issued the trading query.

The company said it did not think it was necessary to call for a trading halt initially, pending finalisation of the termination.

It also said the parties mutually agreed on the termination only during the trading halt.

But listing rules require an issuer to announce any information known to the issuer concerning it or any of its subsidiaries or associated companies to avoid the establishment of a false market in the issuer's securities among other things.

The SGX said companies should always keep a close watch on the trading activity of its securities, especially when there are material developments in proposed transactions. A trading halt should be requested, if necessary.

A version of this article appeared in the print edition of The Straits Times on December 22, 2015, with the headline 'Firm rapped for not calling for trading halt'. Print Edition | Subscribe