SINGAPORE - Fresh from a major revamp of disclosure rules for listed companies, the Singapore Exchange (SGX) moved on Friday (Jan 10) toughened its review process for companies seeking a mainboard listing by holding issue managers of firms going public to higher disclosure standards.
With immediate effect, issue managers now have to comply with the due diligence guidelines issued by the Association of Banks in Singapore (ABS).
The ABS guidelines will be incorporated into SGX's mainboard listing rules, said SGX RegCo, the bourse's regulatory arm.
They will serve as a reference point for expected industry standards, and provide guidance on the broad framework and principles which issue managers should consider when conducting due diligence work, said SGX RegCo.
SGX RegCo also strengthened its oversight of issue managers as part of overall enhancements to regulations governing the mainboard listings review process.
These and other enhancements to the mainboard listing rules follow generally supportive feedback to a public consultation on the listings review process in late 2018, said the regulator.
SGX RegCo said it is also codifying existing issue manager independence requirements in the mainboard listing rules and will introduce a practice note to provide guidance on its assessment of the factors affecting this independence. The note will set out the circumstances and relevant threshold limits in considering whether an issue manager is considered independent.
SGX RegCo will also explicitly require all directors and executive officers of a listing applicant, whether proposed or appointed, to be held responsible for ensuring that information submitted to SGX in listing applications and SGXNET announcements is "complete and accurate in all material respects, and not misleading".
This rule enhancement will clarify the regulatory position that proposed directors and executive officers are among the relevant persons held responsible for such accuracy and completeness, said SGX RegCo.
"The strengthening of the rules governing the listing review process is crucial to investor confidence," said SGX RegCo chief executive officer Tan Boon Gin.
"Issue managers are the gatekeepers to our market, and - together with company directors and executive officers - hold great responsibility for ensuring quality disclosures of information that emphasise substance over form," he added.
"The Singapore market can only continue to thrive when directors and executive officers, with market professionals, play their part responsibly and robustly."
On Thursday, SGX RegCo scrapped mandatory quarterly reporting for bigger listed companies. When the rule change takes effect on Feb 7, only riskier companies will need to report earnings every three months. At the same time, to better protect investors the regulator will enhance continuous disclosure rules on interested person transactions, significant financial assistance, significant transactions and dilutive secondary fund-raising.