Traders to get S$0.30 per DLC goodwill payment for SIA shorts by June 8

Published Mon, Jun 1, 2020 · 09:39 AM

REGISTERED holders of the 5x Short Singapore Airlines daily leveraged certificates (DLCs) who were disadvantaged by issuer Societe Generale's (SocGen) late disclosure about its ex-rights adjustment to the price of the structured products will receive a S$0.30 "goodwill" payment per DLC within five business days from June 2.

The payment will be made through the Central Depository, SocGen said.

SocGen had promised to make the "goodwill" gesture last month, after traders protested against SocGen's breach of timely disclosure rules, as well as what they felt was an unfair ex-rights adjustment made by the issuer of the DLCs.

Under the terms and conditions of the DLC, SocGen is required to make known via SGXNet the adjustment announcement as soon as practicable. SGXRegco also requires DLC issuers to announce the adjustment on SGXNet once determined, but in no event later than the market date prior to the effective date of the adjustment.

SocGen published the announcement only at 8.38am on the day that Singapore Airlines shares started trading ex-rights. Since the adjustment adopted by SocGen was also more aggressive than what the market had been expecting, this caught many traders off guard while their positions in the DLCs quickly went to zero.

It is widely believed that SocGen breached the disclosure rules. The regulator is yet to take a position on the matter. SGX RegCo has said that it is reviewing the situation.