SINGAPORE: The Singapore Exchange (SGX) on Thursday (Dec 7) proposed making tweaks to the disclosure requirements under listing rules to address key areas of concerns.
The bourse operator is mulling changes in three aspects: Secondary fund-raising, interested person transactions, as well as significant transactions and loans.
For secondary fundraising, the recommendations include having listed companies provide additional upfront and prominent disclosure of the discount, ratio and other principal terms for rights issues, as well as a directors’ statement on why the rights issue is in the best interest of the issuer and the basis for such a view should also be issued.
Listed entities should also provide additional disclosure of the use of proceeds and intended use of unutilised amount if a rights issue takes place within a year of another fundraising, said the SGX in its news release.
In terms of interested person transactions (IPT), the SGX suggested for IPT that are below S$100,000 to be no longer exempted from announcements or shareholder vote.
It also wants additional disclosure on the nature of the relationship with the interested person, as well as the identification of the relevant director, chief executive or controlling shareholder of the issuer who will be covered by the IPT mandate.
Under significant transactions and loans, the bourse operator recommended additional disclosures for loans that are not part of the issuer's ordinary course of business.
Other proposed changes include the appointment of a competent and independent valuer for significant asset disposals, as well as have companies explain why no valuation was done for an acquisition or disposal of assets that is a major transaction unless it involved shares.
"We are proposing to recalibrate the disclosure regime using a risk-based approach following extensive engagements with investors, companies, and other stakeholders,” said Mr Tan Boon Gin, chief executive of Singapore Exchange Regulation. "The additional disclosures we are proposing address key areas of concern of the market and the exchange."
Securities Investors Association Singapore (Sias) head David Gerald welcomed the move, noting that the proposed changes satisfy calls from shareholders for more visibility and accountability.
He added that the SGX’s requirements on significant transactions and loans would also be beneficial to shareholders.
“Companies should aim to adhere to high standards of ethics and communicate their actions adequately to their stakeholders. The proposed enhanced disclosure requirements are in the right direction and will help raise the level of transparency and accountability, thereby improving the level of confidence in our market,” Mr Gerald said in a statement.
The public can submit feedback on the proposed listing rule changes till Jan 12, 2018. If adopted, the SGX said that it expects to implement the changes in 2018.