Companies should comply with SGX's MTP as soon as possible

FROM March 2, companies whose shares are listed on Singapore Exchange's (SGX) mainboard will have to comply with the requirement of a minimum trading price (MTP) of 20 cents for their shares. After a one-year grace period that extends to March 2016, companies that do not satisfy the MTP requirement will be placed on a watchlist for three years, during which their shares will not be eligible for investment under the Central Provident Fund Investment Scheme.

Beyond that, non-compliance with the MTP could result in a delisting, though this is likely to be a last resort as the option exists for a transfer to the second board, Catalist, where there is no MTP.

In an update this week, SGX pointed out the easiest means of meeting the MTP would be via share consolidations and urged companies with upcoming annual general meetings to use the opportunity to also hold extraordinary general meetings where the relevant shareholder approvals could be secured for such exercises.