MAS, SGX RegCo propose rule changes to pave way for SGX-Nasdaq dual-listing bridge

[SINGAPORE] A key step was taken towards setting up the Singapore Exchange (SGX) and Nasdaq dual-listing bridge, as the Monetary Authority of Singapore (MAS) proposed various legislative and regulatory changes to facilitate the process.

The dual-listing bridge, Global Listings Board (GLB), was announced last November as part of measures to strengthen the competitiveness of Singapore’s equities market.

The consultation paper launched on Friday (Jan 9) suggests having a single prospectus for a dual listing. It also proposes earlier engagement of retail investors after an initial public offering (IPO) is lodged.

These amendments will grant MAS the flexibility to adopt similar streamlined regulatory frameworks for dual listings from jurisdictions that have disclosure requirements comparable to that of the International Organization of Securities Commissions.

Currently, companies can engage retail investors only after the IPO prospectus has been registered as a restriction. This is to mitigate the risk of retail investors relying primarily on the preliminary prospectus, which is subject to changes.

With the development, companies which are seeking an IPO through GLB can engage retail investors after lodging a preliminary prospectus with MAS.

This will include safeguards based on public feedback, such as alerting retail investors that there could be changes to the preliminary prospectus, and that no offer is made based on that initial document.

The changes will apply to both SGX-only listings and dual listings via GLB, and will support bookbuilding efforts as well as give investors more time to understand companies and their IPOs.

For the dual listings specifically, the move will align the retail engagement timings of the US and Singapore.

As part of the changes proposed, an IPO prospectus need not be lodged at least seven days before registration. This will allow for the document to be registered in Singapore as soon as the US registration statement is granted.

This will also bring Singapore’s IPO timeline in line with that of the US.

MAS proposes amending the Security and Futures Act (SFA) to include certain US requirements to allow companies to issue one IPO prospectus for a dual listing on GLB. This will allow companies to use the same prospectus lodged and registered in the US, in Singapore.

MAS is also proposing three safe harbours under the GLB, which are in line with US regulations. These are for forward-looking statements, share repurchases and pre-determined trading plans that do not contravene the SFA.

MAS noted that these safe harbours do not provide a valid defence against fraud or dishonesty and will only apply if certain conditions are met.

As well, while the companies will be listed on both the SGX and Nasdaq, the authorities stressed that MAS and SGX will make the final decision on all listings and prospectus registrations in Singapore.

MAS will also continue to work with the relevant authorities in Singapore to investigate and take action against breaches of disclosure requirements and market misconduct occurring in Singapore under the SFA.

Separately SGX Regulation (SGX RegCo) is also consulting the public on the listing handbook for the GLB. SGX RegCo is setting out some of the following admission requirements for the GLB:

• Companies must have a market capitalisation of at least S$2 billion
• Companies have to appoint a Singapore resident independent director and/or a Singapore-based compliance adviser
• Companies have to appoint a Singapore resident independent director and/or a Singapore-based compliance adviser
• An issue manager must be appointed to manage the listing application on GLB

Some other ongoing requirements to remain listed on GLB include timely disclosures to be released on SGX after release in the US and maintaining their listing status on Nasdaq.

Listing admissions is still subject to the discretion of SGX RegCo.

The proposal for SGX and Nasdaq to establish a dual listing bridge connecting both exchanges was announced in November last year and was among various key measures rolled out with the aim of strengthening the competitiveness of Singapore’s equities market.

This particular move, once implemented, will offer a direct pathway for companies to simultaneously access capital and liquidity across North America and Asia.

The bridge aims to attract quality growth companies in Asia with a market capitalisation of S$2 billion and above, and which have an Asian nexus and global ambitions. Such companies will be able to raise capital from investors in both markets.