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MAS, SGX to go ahead with proposed stock market reforms, sets minimum trading price

Companies listed on the Singapore Exchange (SGX) will have to ensure their shares are worth at least 20 cents each, as authorities go ahead with proposed reforms aimed at curbing excessive speculation in the stock market.

SINGAPORE: Companies listed on the Singapore Exchange (SGX) will have to ensure their shares are worth at least 20 cents each, as authorities go ahead with proposed reforms aimed at curbing excessive speculation in the stock market. This was one of the measures announced by the Monetary Authority of Singapore (MAS) and SGX on Friday (August 1).

The requirement will affect about 220 of the 600-plus companies on SGX's main board. "This is to address risks of low-priced securities being more susceptible to excessive speculation and potential market manipulation,” MAS and SGX said in a statement.

“A transition period of 12 months will be given to affected issuers to undertake corporate actions to meet the new requirement. This proposal will, over time, improve the quality of issuers listed on the SGX main board," they added.

MAS and SGX said issuers with share price below the threshold will be placed on a watch list. If the issuer fails to exit the watch list within the "cure period" of 36 months, the firm will be de-listed. MAS and SGX earlier this year issued a consultation paper seeking feedback on a series of changes aimed at strengthening the stock market in the wake of a scandal involving a number of SGX-listed penny stocks.

The Commercial Affairs Department, the police's white collar crime unit, has sought information about key executives and directors of several companies, including Blumont Group, amid investigations into suspected trading irregularities.

Other measures announced by MAS and SGX on Friday include:

  • SGX will establish three independent committees: the Listings Advisory Committee, the Listings Disciplinary Committee and the Listings Appeals Committee. These will further strengthen SGX's listings process, improve transparency of its disciplinary process and enhance SGX's ability to enforce listing rules.
  • A requirement that securities intermediaries collect a minimum five per cent of collateral from their customers for trading of listed securities to promote financial prudence.
  • Aggregate short position reporting to further enhance transparency of short selling activities in the securities market.

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