Improve disclosure when SGX rejects transfers to Catalist

THE SINGAPORE equity market now has clarity on how the Singapore Exchange (SGX) will assess applications from Mainboard companies seeking to transfer to the Catalist board.

The good news is that the market regulator is taking steps to protect the quality of the Catalist board. What SGX needs to add is that issuers must also disclose the reasons that their transfer applications are rejected.

Mainboard companies are placed on a watch-list if they fail to meet requirements either for minimum trading price or for profitability and market capitalisation, and such companies will be delisted if they are not able to get off the watch-list within certain time limits. The Catalist board, however, has no such listing requirements, making a transfer to the Catalist board a potentially desirable option for some companies on a watch-list. The existence of that alternative, however, creates a risk that Catalist, which was intended as a listing venue for less mature but potentially faster growing companies, will be seen as a dumping ground for Mainboard rejects.