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November 2008:
Catalist for Growing Local and International Companies
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Catalist, a new listing platform was created by the Singapore Exchange (“SGX”) on 26 November 2007. It is transformed from SESDAQ, the current second Board of SGX.
Sponsors
Sponsors play a critical role in this new regime. Sponsors will be qualified as Full Sponsors or Continuing Sponsors. Full Sponsors will decide on the suitability of companies listing on Catalist and it is no longer reviewed by SGX. A Full Sponsor which brings a company to list must remain as its Sponsor for at least three years after IPO. All Sponsors are responsible for advising companies on rule compliance and reviewing all company announcements and circulars after IPO.
The Issuer
Companies with no track or earnings record may list on Catalist. There is no restriction on the size of companies seeking a listing on Catalist. Instead of a prospectus, listing applicants must issue an Offer Document. The Offer Document will be lodged on the Catalist website for public comment. Post-IPO, companies must retain a Sponsor at all times; if not they face delisting. Local companies listing on Catalist must have at least two independent directors sitting on the board. As for foreign companies, one of these must be local resident. There is no quantitative requirement for raising funds at the initial public offering. However, companies need to comply with the following shareholding spread requirements:-
- post-invitation, 15% of the share capital must be in public hands;
- the number of public shareholders must be at least 200; and
- the overall distribution of shareholdings should provide an orderly secondary market in the securities when trading commences, and must not lead to a corner situation in the securities
Promoters will be subject to several constraints on the sale of their shares. They must not sell their shares if (i) they collectively own less than 50% of issued capital at IPO; or (ii) such sale will cause their collective shareholding to fall below 50% of issued capital at the time of listing. A moratorium over all their shares will be imposed on the promoters for a period of first 6 months after the IPO and subsequently, a continued moratorium for another 6 months over half of their shares.
Transition to Catalist
Current SESDAQ companies will continue to be governed by the existing rules. They will have at least 2 years to find a sponsor and comply with the rules of Catalist, failing to do so, they may be delisted.
To assist in the transition of SESDAQ companies to Catalist, SGX is waiving the annual listing fees for the first three years. During this period, these companies will simply pay continuing fees to their sponsors and the annual listing fees of $15,000 to $50,000 will kick in only from the 4th year onwards.
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