SGX Listing Rules amendments effective from 7 February 2020

• Requirement to do QR is based on meeting a certain minimum market capitalisation.

• QR is required only where auditors have issued an adverse opinion, qualified opinion, disclaimer of opinion, or have stated material uncertainty relating to going concern on the latest financial statements. Grace period of one year from the date the condition is met, unless otherwise determined by the Exchange.
• Exchange may also direct companies to do QR pursuant to exercise of admin power. Exchange will release the list of companies that are not freed from QR, and this list will be reviewed quarterly.
   

• IPTs below S$100,000 are not covered.
• No specific requirement to disclose financial assistance from an Interested Person (“IP”) unless the value at risk exceeds the S$100,000 threshold.

• Exchange may deem a person or an entity to be an IP in certain circumstances.
• Exchange may aggregate transactions below S$100,000 in the same financial year and treat them as one transaction.
• Requirement for immediate disclosure of receipt of a significant amount of financial assistance (not necessary from an IP).

• Chapter 10 – Acquisitions & Realisations.
  • Applies to acquisitions & realisations not in the ordinary course of business.
  • Very substantial acquisitions or reverse takeovers, whether or not in the ordinary course of business.
  • No requirement for valuation unless it is a very substantial acquisition.
  • No disclosure requirement on providing financial assistance in favour of third parties.

• Provision of financial assistance in favour of third parties subject to same rules as for significant acquisitions or disposals. As a consequence of this change, the title of Chapter 10 is changed to Significant Transactions.
• Explanation required if no valuation is conducted for a major acquisition or disposal of assets. A valuation by competent & independent valuer is required for disposals of assets exceeding 75% threshold.
• Notwithstanding the classification based on the relative figures calculated, Exchange may impose additional requirements on the transaction

• Not subject to Rules under Chapter 10, Acquisitions & Realisations (except for very substantial acquisitions or reverse takeovers).

Transactions will not be regarded as “in the ordinary course of business” and exempted from Chapter 10 if the following conditions are not met:

• Asset acquired is to form part of existing principal business; and
• The acquisition does not change the issuer’s risk profile.
• A disposal of business or a substantial part of the business will usually not be considered to be in the ordinary course of business.

Existing Principal Business is a reportable operating segment that:

• Contributes more than 20% of net profits or total assets; and
• Has been reported in the latest audited financial statements.

Examples of Change of Risk Profile:

• Proposed acquisition reduces net profits or NAV by ≥ 20% based on latest audited financial statements.
• Asset to be acquired is loss-making or is in a net liability position.
• Acquisition will have significant adverse impact on gearing.
• Acquisition results in expansion into a new jurisdiction with significant new risks.
• For MOG companies – new resource, commodity type, or new jurisdiction likely requires reconsideration of applicable risks.

• Disclose key terms of rights issue including price, terms, purpose, amount, intended use, financial circumstances which call for the issue, etc.
• Announce use of proceeds from fund raising and when funds are materially disbursed, whether in accordance with the stated use & percentage, and reasons for material deviation.

Additional disclosures for rights issue:

• Present the principal terms including discount, using a prescribed format, prominently in the first page.
• Provide reasons if mainly for general working capital purposes.
• Directors’ opinion:
  (i) Reasons for the issue if the group’s present working capital and banking facilities are sufficient to meet its present requirements.
  (ii) If answer to (i) is no, whether the group’s net proceeds of the issues, present working capital, and banking facilities available are sufficient to meet its present requirements.
• Directors’ statement on why the issue is in the interest of the issuer.
• If the issue is within 12 months from previous equity fund raising: description, date of issue of new securities and amount raised, amount utilised & breakdown on use of proceeds, amount not utilised &  how it is intended to be used. If there is no such previous equity fund raising, a negative statement 

Additional disclosures where part of fund raising proceeds are used for general working capital:

• To announce breakdown with specific details on the portion used for general working capital.

• Corporate Disclosure Policy requires disclosure of significant improvement or deterioration in near-term earnings prospects.

Additional guidance on events which require timely disclosure:

• Profit Guidance or Profit Warning – significant deviation of financial position from previously reported results should be disclosed immediately, and not withheld until the scheduled release of the financial report
• Loss of a major customer or a significant reduction of business with a major customer.
• Major disruption to supply of critical goods or services.
• Investigation on a director or an executive officer.

• Requirement to disclose material information in accordance with LR 703.

• Additional guidance to make it explicit that the disclosure obligation apply not just to material price-sensitive information but also to trade-sensitive information