SGX's regulatory arm to review the retail bonds framework

SGX RegCo has set up a working group of industry professionals and investors to review the regulatory framework.
SGX RegCo has set up a working group of industry professionals and investors to review the regulatory framework.PHOTO: ST FILE

SINGAPORE - The regulatory arm of the Singapore Exchange (SGX) will look into the rules around retail bonds, including possibly tightening the admission criteria for issuers.

SGX RegCo has set up a working group of industry professionals and investors to review the regulatory framework, it said on Thursday (Jan 2).

The move follows the high profile default by water treatment company Hyflux last year and follows on the heels of RegCo devising a road map to tighten its oversight of the market.

The road map includes measures such as setting up a whistle-blowing office and increasing the accountability of auditors, sponsors and issue managers.

It also made key changes to delisting rules to protect independent and minority shareholders.

Mr Michael Tang, SGX RegCo's head of listing policy and product admission, said: "We are reviewing the retail bonds framework following recent developments and feedback from the market.

"The possibility of tightening the admission criteria, including requiring a minimum level of subscription by institutional investors and a credit rating, are among matters to be discussed."

The working group will also assess the admission criteria for retail bond listings, the continuing obligations of issuers and ways to protect bondholders in the event of a default or restructuring.

Mr Tang added: "The working group will provide views on how individual investors can be better served when bonds they hold are in distress. We want to hear suggestions on how to fund trustees acting for bondholders and ways to help bondholders organise themselves."

The group is expected to present its recommendations by the middle of the year with a public consultation likely by the end of the year.

The working group comprises representatives from financial services firm Perpetual (Asia), law firms Allen & Gledhill, Allen & Overy and Clifford Chance, banks such as DBS, OCBC and United Overseas Bank and the Securities Investors Association Singapore (Sias).