VANESSA NG MARKUS POH LEONG KEE
Director, Corporate Practice Associate, Corporate Practice
T: (65) 6645 4506 T: (65) 6645 4505
E: vanessa.ng@fortislaw.com.sg E: markus.poh@fortislaw.com.sg
Fortis Law Corporation
24 Raffles Place, #29-05 Clifford Centre, Singapore 048621
T: 6535 8100
E: mail@fortislaw.com.sg
The Singapore Exchange Securities Trading Limited (“SGX-ST”) is regarded as an efficiently regulated marketplace with a strong emphasis on market transparency and integrity. A company seeking to list on the SGX-ST would have to consider, in its initial planning and preparation stage, whether it will be listing on the Mainboard or the Catalist of the SGX-ST, with each board having different listing conditions.
These are some of the reasons why a company seeks a listing:
• Funding – the issuance of new shares to the public would allow a listed company to raise funds to expand and grow its business.
• Additional funding – a listed company may raise additional funds by carrying out corporate actions such as share placement and rights issue. It would be easier for a listed company to raise additional funds through such corporate actions as shareholders would have the comfort level that their investments will be secured.
• Acquisition – a listed company may choose to use its shares, which are more marketable, as a form of acquisition currency as part of the consideration when acquiring other companies or businesses. The holder of consideration shares can choose to keep those shares as a form of investment or dispose them on the open market when desired.
• Market exposure – there will be better market exposure for a listed company, enabling it to attract a large institutional investor base.
• Reputation – a listing would enhance the branding and reputation of a company, and could provide additional publicity through increased and sustained media attention.
A typical initial public offering (“IPO”) process involves the following:
• Detailed due diligence on the company and its related entities.
• Preparation of a prospectus and other documents required under the Securities and Futures Act (Cap. 289) and applicable regulations.
• SGX-ST reviews and approves the company’s listing application and draft prospectus.
• Lodgement of the prospectus with the Monetary Authority of Singapore (“MAS”), and upon approval by MAS, the prospectus will be registered and offer of the company’s shares for subscription would commence.
• Following the close of the offer, the company’s shares would be listed on the SGX-ST and trading in its shares on the SGX-ST would commence.
A key difference between a Mainboard and a Catalist listing is that a company seeking a listing on the Mainboard would need to meet the conditions on market capitalisation and profit under Rule 210 of the Mainboard listing rules, whereas such requirements do not apply in a Catalist listing. However, a company seeking to list on the Catalist would need to appoint a sponsor to assess the company’s suitability to list, who will advise and guide the company through the listing process. We shall go into further details of the differences between a Mainboard and a Catalist Listing next month.
