A more robust sponsor-based regime for Catalist is needed

LAUNCHED in November 2007, the sponsor-based Catalist board welcomed its first sponsor-approved listing in June 2008, when Mencast Holdings raised S$6.3 million. JK Technology Group was the first SESDAQ company to transfer to Catalist in March 2008.

Over the last 10 years, Catalist listings have outpaced those on the Mainboard. They now account for 30 per cent of all SGX listings, up from 17 per cent in 2010. As at June 2020, 216 issuers were listed on it.

Catalist is modelled after the Alternative Investment Market (AIM) in the UK; sponsors on Catalist are equivalent to nominated advisers on AIM. A Catalist company is required to appoint a full sponsor for its listing and have a continuing sponsor throughout its life on Catalist. The continuing sponsor helps ensure that the Catalist issuer complies with listing rules. While Catalist, like AIM, requires companies to retain a sponsor throughout its entire life on that board, other sponsor-based regimes in HK and Malaysia require only a compliance adviser and sponsor respectively to be appointed for a limited period. Clearly, in the latter cases, the stock exchange regulator will have to play a more active role in monitoring companies.