SGX steps up Singapore stock market transformation

Singapore Exchange (“SGX”) today introduced higher Mainboard admission standards as it continues the transformation of the Singapore stock market, ensuring SGX remains a competitive and relevant global exchange.

The new criteria extend market transformation to the quality of the primary (IPO) market, making it attractive for larger companies seeking to list. This builds on earlier structural initiatives in the secondary (trading) market such as the launch of Reach technology, continuous all-day trading and the reduction in minimum bid sizes.

SGX will also look to increase the proportion of IPO tranches allocated to retail investors, particularly for listings which draw high retail subscription.

New Mainboard admission criteria

Companies intending to join SGX’s Mainboard must meet one of the following quantitative requirements:

• Have a market capitalisation at IPO of not less than S$150 million if they are profitable in the last financial year and have an operating track record of at least three years
• Have a market capitalisation at IPO of not less than S$300 million if they only have operating revenue in the latest completed financial year.
• Have minimum consolidated pre-tax profit of at least S$30 million for the latest financial year and have operating track record of at least three years;

In addition, the IPO shares issued must be at least S$0.50 each.

The new admission criteria take into account feedback and suggestions SGX received from the public consultation concluded in February 2010. The new criteria are effective 10 August 2012. Details on the new criteria for Mainboard applicants and transitional arrangements for Catalist companies seeking to transfer to Mainboard are in Appendices A and B. These can also be accessed from www.sgx.com/transformingthemarket.

Mr Magnus Bocker, CEO of SGX, said: “Our transformational journey ensures customers coming to SGX will continue to find Asia’s most competitive and relevant capital-raising and risk management venue. Quality begets quality. The enhanced admission standards will increase Singapore’s attractiveness for companies and investors, further strengthening its position as an international financial centre.”

Mr David Gerald, president of Securities Investment Association of Singapore said, “We welcome SGX’s initiative to address key challenges the Singapore stock market faces. I think retail investors will reap significant benefits in terms of having wider access to new IPOs. At the same time, they can be better assured that companies listed on SGX are of good standing and quality. More importantly, investors can look forward to a more attractive market that has a higher level of corporate governance overall.”