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SGX proposes tweaks to strengthen disclosure rules

SINGAPORE'S bourse operator has zoomed in on the weak points in disclosure requirements under listing rules and proposed refinements that could improve transparency and accountability of companies.

The Singapore Exchange (SGX) has suggested three areas in which the tweaks will be made - secondary fund-raising, interested person transactions as well as significant transactions and loans.

Under secondary fundraising, the SGX has proposed that listed companies provide additional upfront and prominent report on the discount, ratio and other principal terms for rights issues.

Listed entities should also issue a directors' statement on why the rights issue is in the best interest of the issuer and the basis for it.

They should also declare the use of proceeds and intended use of unutilised amount if a rights issue takes place within a year of another fundraising, suggested the SGX.

The SGX has recommended that interested person transactions (IPT) that are under S$100,000 to no longer be exempted from announcements or shareholder vote, in addition to greater notice on the nature of the relationship with the interested person.

The bourse operator is also suggesting that the relevant director, chief executive or controlling shareholder of the issuer who will be covered by the IPT mandate, be identified.

In terms of significant transactions and loans, the SGX is proposing additional disclosures for loans that are not part of the issuer's ordinary course of business.

It wants companies to explain why no valuation was done for an acquisition or disposal of assets that is a major transaction. The exception will be if the transaction involved shares.

The SGX is also suggesting the appointment of a competent and independent valuer for significant asset disposals.

Tan Boon Gin, CEO of Singapore Exchange Regulation said: "We are proposing to recalibrate the disclosure regime using a risk-based approach following extensive engagements with investors, companies, and other stakeholders. The additional disclosures we are proposing address key areas of concern of the market and the exchange."

The public can submit feedback on the proposed listing rule changes till Jan 12, 2018.

If adopted, the SGX said that it expects to implement the changes in 2018.