SGX Consults On Minimum Trading Price
This consultation on the minimum trading price requirement and proposed changes to the existing watch-list follows positive response to the February 2014 Monetary Authority of Singapore (MAS) and SGX joint consultation on proposals to enhance the Singapore securities market. The notification requirement was announced at the same time as the joint consultation as part of SGX’s enhancement of its regulatory tools.
Minimum trading price and changes to existing watch-list
MAS and SGX have decided to introduce a minimum trading price for Mainboard-listed stocks as a continuing listing requirement to address risks associated with low-priced securities and to improve overall market quality. Given the strong public support for the requirement, SGX will proceed to set a minimum trading price of S$0.20 for Mainboard stocks.
A one-time transition period of 12 months from the date of introduction of the minimum trading price requirement will be given to affected issuers to undertake corporate actions to meet the new requirement. Those which are unable to meet the requirement after the 12-month transition period will be placed on a watch-list. Issuers which are unable to take steps to raise its minimum trading price and exit the watch-list will be delisted after a 36-month cure period.
SGX is consulting the public on operational details of the minimum trading price requirement. With the introduction of the minimum trading price requirement and its designation as one of the criteria for entry into the watch-list, SGX is also proposing adjustments to the existing watch-list framework to better rationalise the existing watch-list criteria with the minimum trading price entry and exit criteria.
SGX targets to introduce the minimum trading price requirement and adjustments to the existing watch-list requirements by March 2015, and for them to take effect from March 2016.