Moves are under way to tackle the weak points in Singapore's disclosure requirements by refining listing rules to improve transparency and company accountability.
The Singapore Exchange (SGX) suggested three areas yesterday where tweaks will be made: secondary fund raising; interested person transactions; and significant transactions and loans.
Singapore Exchange Regulation chief executive Tan Boon Gin said: "We are proposing to recalibrate the disclosure regime using a risk-based approach following extensive engagements with investors, companies, and other stakeholders. The additional disclosures we are proposing address key areas of concern of the market and the exchange."
In the area of secondary fund raising, it is proposing that listed companies provide additional upfront and prominent reports on the discount, ratio and other principal terms for rights issues.
Companies should also issue a directors' statement on why the rights issue is in the best interest of the issuer and the basis for it.
They should also declare how the proceeds will be used and the intended use of unutilised funds if a rights issue takes place within a year of another capital raising.
The SGX has recommended that interested person transactions that are under $100,000 to no longer be exempted from announcements or shareholder vote. Additionally, it wants more notice given on the nature of the relationship with the interested person.
We are proposing to recalibrate the disclosure regime using a risk-based approach following extensive engagements with investors, companies, and other stakeholders. The additional disclosures we are proposing address key areas of concern of the market and the exchange.
SINGAPORE EXCHANGE REGULATION CEO TAN BOON GIN
The bourse operator also suggests that the relevant director, chief executive or controlling shareholder of the issuer who will be covered by the interested person transaction mandate be identified.
In terms of significant transactions and loans, the SGX is proposing additional disclosures for loans that are not part of the issuer's ordinary course of business.
It wants companies to explain why no valuation was done for an acquisition or disposal of assets that is a major transaction. The exception will be if the transaction involved shares.
The SGX is also suggesting the appointment of a competent and independent valuer for significant asset disposals.
The public can submit feedback on the proposed listing rule changes until Jan 12.