The need to maintain confidentiality during the secret merger talks between the SGX and ASX prevented a tender process, resulting in firms being handpicked in accordance to their track record.
Stamford Law had not acted for ASX previously and was independently contacted by the stock exchange to advise as Singapore counsel. The firm provided strategic advice leading to the discussions and negotiations of the final inking of the Merger Implementation Agreement (MIA) yesterday.
According to Stamford law partner Yap Lian Seng, much of the deal’s complexity lies with regulatory approval – in particular on the Australian side – as the impending acts of parliament to be tendered pose some regulatory hurdles for the ASX to cross. “Because the two exchanges are highly regulated entities – the MAS in Singapore and ASIC in Australia – the regulatory approvals process is predicted to be lengthy,” he said.
Yap expects the implementation to be completed in the second quarter of 2011, in approximately six to nine months.
“This is a landmark transaction as the combined entity will have directorship and management participation on both sides. Each board continues to be regulated by a local authority despite being owned by the same company. It’ll be interesting to see how it will all work,” Yap said.
A development that capital markets lawyers will watch with interest is the ability to transfer between the two depositary platforms. At present, shares listed on either exchange cannot transfer from one to the other, even if they are dual-listed. “Previously it was not possible for ASX or SGX shares to transfer between the two exchanges. You have to do it by CDI as the two depositaries – the CDP and CHESS – are non-transferable. Having the rules align and being able to transfer to the two depositary platforms will be a positive development,” Yap said.ALB
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