SGX RegCo consults on regulatory changes to streamline IPO rules

Business Times

15-05-2025

[SINGAPORE] Listed issuers on the Singapore Exchange (SGX) will be expected to take on a more proactive role in providing timely and relevant disclosures, focusing on material information rather than following prescriptive requirements.
The change comes as the Singapore Exchange Regulation (SGX RegCo) seeks market feedback on the proposed regulatory changes aimed at transitioning to a more disclosure-based regime, it announced on Thursday (May 15).
These changes include streamlining qualitative mainboard admission criteria, refining quantitative mainboard admission criteria, removing the financial watch list, as well as revising post-listing queries and obligations.
It said the proposed changes are in line with an approach that 'adopts a pro-enterprise stance alongside measures to strengthen investor confidence'. These reforms are part of recommendations to revive the local market, which were announced by the Monetary Authority of Singapore (MAS) equities market review group in February 2025.
The changes are expected to complement other measures announced by the group to promote institutional participation, and foster an attractive and trusted market. These include the S$5 billion Equity Market Development Programme and tax incentives to encourage greater investment in Singapore-listed equities.
The group also recommended adopting a more 'pro-enterprise regulatory stance' with regulatory measures moving Singapore towards a more disclosure-based regime.
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'This will smoothen the path for enterprises to access the capital markets, allowing investors an expanded range of investing opportunities and better ability to make investment decisions in reliance on relevant and material information,' said Tan Boon Gin, chief executive officer at SGX RegCo.
The aim is to assure market participants that the information on which they base their decisions is accurate and accessible as well as maintaining a fair market.
'To that end, we will ensure that regulatory oversight of both corporate disclosures and trading activity remains rigorous, even as we refine the manner in which such oversight is conducted and communicated, to ensure relevant and material information for investors is disclosed,' he added.
Streamlining admission criteria for mainboard listings
The proposed changes will also include streamlining the qualitative admission criteria for mainboard listings. SGX RegCo intends to maintain a prescriptive approach in critical areas such as an applicant's financial position and the track record of its directors, management and controlling shareholders.
For other matters, the emphasis would be on ensuring companies provide relevant and robust disclosures to support informed investor decisions, rather than mandating how such matters should be resolved.
Market participants told The Business Times that the moves could boost SGX's appeal as a listing destination, but cautioned that such a shift must be accompanied by robust investor safeguards, corporate governance and investor education.
'Traditional, prescriptive metrics often make it difficult for such companies to list – one reason we see so few tech firms on our exchange,' said Terence Wong, CEO at Singapore-based fund manager Azure Capital.
He also stressed that investor education becomes even more critical in this new environment, as investors need to learn how to extract key insights from increasingly detailed disclosures.
Luke Lim, managing director at brokerage Phillip Securities and chairman of Securities Association of Singapore, said: 'This approach recognises that today's capital markets are more diverse, dynamic and investor-led than ever before. Instead of prescribing what companies should or should not do, disclose with clear, relevant, and timely disclosures – and then let the markets decide.'
Lock Yin Mei, managing director of Venture Law, noted that a merit-based assessment of qualitative criteria, such as conflicts of interest, represents only a snapshot at a specific moment.
She said that as facts and contexts evolve, a prescriptive approach may not always be appropriate for every issuer.
'The alternative of disclosure and explanation, makes the issue public and places the responsibility with the issuer and professionals, for which under the proposals, they can be taken to task,' she added.
Balancing regulatory oversight and market empowerment
To support good companies, SGX RegCo is also proposing to remove the financial watch list, citing concerns over its unintended impact on business confidence and financing.
The regulator said companies will still be required to announce if they report losses for three consecutive years. In the meantime, its half-yearly reviews related to placing companies on the watch list will be suspended.
However, companies already on the list will remain listed during this period, regardless of whether they meet the exit criteria.
In addition to the proposed listing rule changes, SGX RegCo also plans to refine its approach to post-listing queries and obligations.
The regulator noted that issuing public queries for immaterial matters could create unnecessary alarm in the market.
It is therefore proposing a more calibrated approach, including shifting to private engagement in certain cases, narrowing public disclosures to price-sensitive or trade-sensitive information, limiting the validity of trade-with-caution alerts to two weeks, and updating its suspension framework.
All feedback is to be submitted by Jun 14.