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Singapore Exchange proposes changes to disclosure rules

Singapore Exchange Ltd. proposed changes to its disclosure requirements to adopt a risk-based approach in order to address areas of concern of the market and the bourse.

The exchange proposed changes to three areas: secondary fundraising, interested person transactions and significant transactions and loans.

In regard to secondary fundraising, SGX proposed that listed companies provide additional upfront and prominent disclosure on the discount, ratio and other principal terms for rights issues. Companies must also provide a directors' statement on why the rights issue is in the best interests of the issuer and their basis for forming such a view.

The exchange also proposed additional disclosure of how proceeds will be used and the intended use of unutilized proceeds if a rights issue is within a year of another fundraising. It additionally suggested companies announce the specific use of funds earmarked for "general working capital purposes."

For interested person transactions, the bourse said that transactions below S$100,000 will no longer be exempted from announcements or shareholder votes. Listed companies will also need to provide additional disclosure on the nature of the relationship with the interested person, as well as identify the relevant director, CEO or controlling shareholder of the issuer who will be covered by the mandate for the transaction.

Moreover, SGX proposed additional disclosure for loans that are not part of the issuer's ordinary course of business. Companies must also provide an explanation on why no valuation was made for an acquisition or disposal of assets that is a major transaction, except if the transaction involved shares.

SGX is inviting feedback on the proposed changes until Jan. 12, 2018. The exchange expects to implement the new rules in 2018.

As of Nov. 7, US$1 was equivalent to S$1.35.