Push to simplify disclosure requirements for firms eyeing IPOs in S'pore

Aim is to make listing process easier, help firms provide more relevant info to investors

- Kang Wan Chern

Disclosure requirements for companies considering initial public offerings (IPOs) here could be simplified to make the listing process easier and help firms provide more relevant information to investors.

The Monetary Authority of Singapore (MAS) said on May 15 that it is consulting the public on proposed amendments to regulations under the Securities and Futures Act.

The exchange regulator, Singapore Exchange Regulation (SGX RegCo), is also conducting a concurrent public consultation on the relevant amendments to listing rules.

The moves come after an MAS-led review group announced new measures in February aimed at reviving trading on the SGX.

These include getting selected fund managers to invest at least $5 billion of seed capital in promising non-index SGX stocks, and requiring family offices here to also invest in the stock market.

The proposed regulatory changes towards a less prescriptive and more disclosure-based system for IPOs are part of these measures.

STREAMLINING DISCLOSURES FOR PRIMARY AND MAINBOARD LISTINGS

Companies seeking a primary listing on the SGX will be required to disclose information that is most relevant to investors.

For example, the issuer is now required to disclose the list of all entities owned by the company's directors or controlling shareholder that operate in the same business as the issuer. This generates excessive details about these entities.

"The existing requirement will be streamlined to require issuers to provide clear disclosure on the core substance of conflicts faced, instead of purely factual information about the entities," noted the MAS consultation paper.

There are also proposals to ensure that the time and costs needed to compile the information are commensurate with the informational value to investors.

For example, companies have to get an outside expert to confirm their profit predictions when they list on the stock market.