General Announcement::SGX RegCo removes minimum trading price rule while enhancing other anti-manipulation tools

Issuer & Securities

Issuer/ Manager
SINGAPORE EXCHANGE LIMITED
Securities
SINGAPORE EXCHANGE LIMITED - SG1J26887955 - S68
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
11-May-2020 17:16:52
Status
New
Announcement Sub Title
SGX RegCo removes minimum trading price rule while enhancing other anti-manipulation tools
Announcement Reference
SG200511OTHRX6XS
Submitted By (Co./ Ind. Name)
Jo-Ann
Designation
Senior Associate, Marketing & Communications
Description (Please provide a detailed description of the event in the box below)
Singapore Exchange Regulation (SGX RegCo) is removing the minimum trading price (MTP) rule for Mainboard issuers with effect from 1 June 2020.

Since the implementation of a series of anti-manipulation tools, the number of manipulation alerts triggered on our market has declined. These tools include the enhanced Trade with Caution alerts and Member Surveillance Dashboard. In contrast, the MTP framework has turned out to be a blunt tool in addressing risk of manipulation.

The shares of most of the issuers in the MTP watch-list have not been found to be manipulated. Yet these issuers are subject to risk of a delisting as a result of the MTP rule. Issuers on the MTP watchlist have also faced challenges in borrowing from banks and developing business relationships.

The public consultation to remove the MTP rule received broad support from market participants. The MTP watch-list will cease to exist on 1 June 2020 and Mainboard companies on the list will no longer need to satisfy the exit criteria and apply for removal from the MTP watch-list.

SGX RegCo will continue to enhance our tools to prevent and detect manipulation. This includes developing new capabilities such as the deployment of artificial intelligence in our real-time monitoring system.

At the same time, SGX RegCo has strengthened the financial watch-list[1] by refining the exit requirements. Starting from 1 June 2020, non-recurrent income or income generated by activities outside the ordinary course of business will be excluded in assessing whether issuers fulfill the profitability test for exiting the financial watch-list.

In addition, an issuer will not be considered as meeting the profitability test for exiting the financial watch-list if its latest financial statements are subject to a modified audit opinion, or if its auditors have highlighted a material uncertainty relating to going concern.

SGX RegCo will also ignore artificial distortions to share prices that are not representative of true market demand in assessing share price or market capitalisation thresholds in the Mainboard and Catalist listing rules, including the market capitalisation test for exiting the financial watch-list.

SGX RegCo's responses to the feedback received on the MTP public consultation can be found here.

[1] As announced on 8 April 2020, SGX RegCo has provisionally suspended placing issuers on the financial watchlist in June 2020 and December 2020 amid the challenging business and economic climate due to COVID-19. However, issuers can continue to exit the financial watch-list if they can meet the exit criteria.

Attachments

20200511_SGX_RegCo_removes_minimum_trading_price_rule_while_enhancing_other_anti-manipulation_tools.pdf
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