OCTOBER 2020 – ANNOUNCEMENTS/GUIDANCE PUBLISHED BY SGX REGCO

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OCTOBER 2020 – ANNOUNCEMENTS/GUIDANCE PUBLISHED BY SGX REGCO

On 1 October 2020, the Accounting and Corporate Regulatory Authority (“ACRA”), the Monetary Authority of Singapore (“MAS”) and Singapore Exchange Regulation (“SGX RegCo”) have updated a checklist that guides both listed and non-listed entities on the conduct of general meetings. ACRA, MAS and SGX RegCo said issuers and non-listed companies may continue to conduct their general meetings held on or before 30 June 2021 via electronic means and are encouraged to do so. This will help keep physical interactions and COVID-19 transmission risks to a minimum.

Issuers are encouraged to adopt enhanced digital tools such as real-time remote electronic voting and real-time electronic communication to facilitate shareholder engagement at the meetings. We have provided a table below for the regulatory updates from SGX RegCo till date. The relevant guidance that are still applicable is appended below the table. (Updated as of 1 October 2020)

Description	Date	Remarks
Guidance on the Conduct of General Meetings Amid Evolving COVID-19 Situation	1 October 2020	Latest checklist guide to conduct general meetings via electronic means to 30 June 2021.Guideline for physical attendance
Electronic Dissemination of Rights Issue and Take-over Documents Extended to 30 June 2021	29 September 2020	Rights Issue and Take-over Documents Extended to 30 June 2021.
All SGX-listed issuers can hold general meetings by electronic means till 30 June 2021	7 September 2020	The Ministry of Law (MinLaw) has announced an extension to 30 June 2021 of the duration of legislation that enables entities to hold meetings via electronic means.
Additional Guidance on the Conduct of General Meetings During Safe Management Period – 13 April 2020 (Updated on 22 June 2020)	13 April 2020	Superseded by 1 Oct 2020 guidance.
Electronic Dissemination of Rights Issue and Take-over Documents Allowed Until 30 September 2020	6 May 2020	Superseded by 29 Sept 2020 guidance.
SGX RegCo grants auto-extension for release of unaudited financial results for FYs ended Feb, Mar and April 2020	22 April 2020	Superseded with extended deadline for 30 April 2020 YE (for unaudited financial results) has lapsed on 29 July 2020
SGX RegCo announces measures to support issuers amid challenging COVID-19 business climate	8 April 2020	Applicable to Mainboard 1. Suspension of Entry into the Financial Watch-List on the first market days of June 2020 and December 2020 2. Enhanced Share Issue Limit for Mainboard Issuersuntil 31 December 2021.
SGX RegCo grants automatic 60-day extension for issuers to hold AGMs	7 April 2020	Superseded with extended deadline for 31 March 2020 YE’s AGM on 14 Sept 2020 has lapsed
ACRA, MAS and SGX RegCo update guidance on general meetings	31 March 2020	Superseded by 1 Oct 2020 guidance.
Guidance on safe distancing measures for issuers when conducting meetings	25 March 2020	Superseded by 1 Oct 2020 guidance.
SGX RegCo provides guidance on holding of general meetings amid COVID-19	19 March 2020	Superseded by 1 Oct 2020 guidance.
SGX RegCo gives additional two months to issuers to hold AGMs due to concerns about large-group meetings amid COVID-19	27 February 2020	Superseded
SGX RegCo gives issuers up to 30 June 2020 to hold AGMs to approve FY Dec 2019 results amid 2019-nCoV situation	7 February 2020	Superseded

USEFUL LINKS:

SGX-ST’s Keeping the Marketplace available and accessible for you:

FAQ on Automatic Time Extension to Hold AGMs
FAQ on Other Listing Rules Amid Covid-19 Situation
FAQ on The Holding of General Meetings
FAQ on AGM Facilitation Grant

GUIDANCE ON THE CONDUCT OF GENERAL MEETINGS AMID EVOLVING COVID-19 SITUATION

(Published by SGX RegCo on 1 October 2020)

Joint Statement By Accounting And Corporate Regulatory Authority, Monetary Authority Of Singapore And Singapore Exchange Regulation:

The Accounting and Corporate Regulatory Authority (“ACRA”), the Monetary Authority of Singapore (“MAS”) and Singapore Exchange Regulation (“SGX RegCo”) have updated a checklist to guide listed and non-listed entities[1]on the conduct of general meetings (“Checklist”) arising from the latest updates from the Multi-Ministry Taskforce to ease safe management measures to facilitate business operations.
The Checklist was first issued amid the evolving COVID-19 situation on 13 April2020 and updated on 27 April 2020 and 22 June 2020.
On 23 September 2020, the Ministry of Health (“MOH”) issued an advisory to provide that work-related events within the workplace premises that are business-oriented (which includes general meetings) will be allowed to resume, for up to 50 persons at a permitted premises (and not a function centre hired from another) with strict adherence to safe management measures.
In addition, temporary legislative relief has been extended to allow entities to hold general meetings via electronic means up to 30 June 2021, even where entities are permitted under safe distancing regulations to hold physical meetings, as well as introduce refinements to the alternative arrangements for the conduct of general meetings (“Alternative Arrangements”).
In view of these developments, ACRA, MAS and SGX RegCo have refreshed the Checklist[2]. Issuers and non-listed companies may continue to conduct their general meetings held on or before 30 June 2021 via electronic means, and are encouraged to do so. This will help keep physical interactions and COVID-19 transmission risks to a minimum, which remain important in the long term, even as safe distancing regulations are gradually and cautiously relaxed. To facilitate shareholder engagement at general meetings, issuers are encouraged to adopt enhanced digital tools at their general meetings, such as allowing for real-time remote electronic voting and real-time electronic communication.
Should issuers and non-listed companies, after due consideration of public health and other risks, wish to provide for physical attendance at their general meetings, they must ensure that they implement all relevant measures to comply with the safe management measures imposed by the Singapore Government. Issuers must also continue to make available the option for shareholders to participate in their general meetings via electronic means.

These include companies, variable capital companies, business trusts, unit trusts (e.g. real estate investment trusts) and issuers of debentures.
The Checklist from SGX RegCo can be found in the following link: https://www.sgx.com/media-centre/20201001-guidance-conduct-general-meetings-amid-evolving-covid-19-situation

PLEASE CLICK ON THE FOLLOWING LINKS FOR MORE INFORMATION:

ELECTRONIC DISSEMINATION OF RIGHTS ISSUE AND TAKE-OVER DOCUMENTS EXTENDED TO 30 JUNE 2021

(Published by SGX RegCo on 29 September 2020)

Joint Statement By Monetary Authority Of Singapore, Securities Industry Council And Singapore Exchange Regulation:

The Monetary Authority of Singapore (MAS), the Securities Industry Council (SIC) and the Singapore Exchange Regulation (SGX RegCo) announced that listed issuers and parties involved in rights issues and take-over or merger transactions will continue to have the option to electronically disseminate Offer Documents through publication on SGXNET and their corporate websites for another 9 months, until 30 June 2021.

With the extension, rights issues and take-over or merger transactions can proceed within safe distancing guidelines, effectively reducing physical interaction at workplaces needed to prepare, print and deliver a large number of Offer Documents. This extension is aligned to the extension of the alternative meeting arrangements under the COVID-19 (Temporary Measures) Act 2020.
Under the temporary measures[1], issuers and parties who opt to disseminate their Offer Documents electronically must send a hardcopy notification to shareholders with instructions on how they can access the electronic version of the Offer Documents. They must also send the hardcopy application or acceptance forms to shareholders. These requirements will ensure that all shareholders continue to be informed of these significant corporate actions by mail during this time and are able to participate in the corporate actions. In addition, we strongly encourage parties undertaking rights issues or take-over or merger transactions to allow shareholders to apply and pay for the subscription of rights issues, accept offers and inspect documents through the internet[2]. Shareholders are encouraged to use the internet channels where these are available.

The temporary measures are effected through the Securities and Futures (Offers of Investments) (Temporary Exemption from Sections 277(1)(c) and 305B(1)(b)) Regulations 2020 by MAS for rights issues and the adoption of alternative arrangements by the SIC for takeover and merger transactions. SGX Listing Rules (i.e. Part IV of Chapter 12) which require delivery of physical documents relating to rights issues and take-over offers to shareholders will also not be applicable during this period.
Details on these internet channels may be set out in the hardcopy notification provided to shareholders.

ALL SGX-LISTED ISSUERS CAN HOLD GENERAL MEETINGS BY ELECTRONIC MEANS TILL 30 JUNE 2021

(Published by SGX RegCo on 7 September 2020)

The Ministry of Law (MinLaw) has announced an extension to 30 June 2021 of the duration of legislation that enables entities to hold meetings via electronic means. MAS and SGX RegCo are therefore highlighting aspects of MinLaw’s announcement that are particularly relevant to listed issuers.
As previously announced, the relevant legislation, including the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020 (“Meeting Order”), enables the conduct of general meetings by electronic means regardless of what issuers’ constitutive documents stipulate.
This latest extension of the application duration of the Meeting Order will provide issuers with the option to conduct general meetings by electronic means even where they are permitted under the COVID-19 safe distancing regulations to hold physical meetings, to help minimise physical interactions and COVID-19 transmission risks.
We will amend the ACRA-SGX-MAS joint guidance to reflect the extended period once the legislative changes are in place.

SGX REGCO ANNOUNCES MEASURES TO SUPPORT ISSUERS AMID CHALLENGING COVID-19 BUSINESS CLIMATE

Published by SGX RegCo on 8 April 2020)

Singapore Exchange Regulation (“SGX RegCo”), in consultation with the Monetary Authority of Singapore (“MAS”), will introduce measures to support issuers amid the challenging business and economic climate due to COVID-19, including enabling the acceleration of fund-raising efforts.

1. Suspension Of Entry Into The Financial Watch-List

COVID-19 has caused a drastic global deterioration in business conditions for all companies, with many experiencing significant loss of revenue and profitability. Share prices of companies have also fallen, translating to sharp declines in market capitalisation. Companies are also likely to face liquidity crunch at this time as banks are tightening credit.

SGX operates a Financial Watch-List and places companies on the List to compel them to turn around their financial performance after 3 years of losses and when market capitalisation falls below S$40 million. In light of current conditions, which are both unprecedented and unforeseen, placing listed issuers on the Financial Watch-List during this period might cause undue prejudice to companies in navigating the business challenges in this climate.

Accordingly, SGX RegCo will provisionally suspend the half-yearly reviews[1] on the first market days of June 2020 and December 2020 to place issuers on the Financial Watch-List[2](“Suspension”). The Suspension is to enable our issuers to focus on meeting the current business and economic challenges and dealing with any resultant liquidity crunch.

Companies which meet the exit criteria under the listing rules will continue to be able to exit the Watch-List.

SGX RegCo shall determine where appropriate, if the Suspension requires further extension in due course.

2. Enhanced Share Issue Limit For Mainboard Issuers

SGX RegCo will provisionally enable Mainboard issuers to seek a general mandate for an issue of pro-rata shares and convertible securities of up to 100% of its share capital (excluding treasury shares and subsidiary holdings in each class) versus 50% previously[3] (“Enhanced Share Issue Limit”).

The Enhanced Share Issue Limit is effective on 8 April 2020 and will be in force until 31 December 2021.

For the avoidance of doubt, the limit on the aggregate number of shares and convertible securities issued other than on a pro rata basis remains at not more than 20%.

Issuers intending to raise funds using the Enhanced Share Issue Limit must seek shareholders’ approval by way of an ordinary resolution either through obtaining a general mandate for the Enhanced Share Issue Limit at their annual general meeting or via specific shareholder approval by convening an extraordinary general meeting (“EGM”).

The Enhanced Share Issue Limit Is Subject To The Following Conditions:

the Board of Directors’ confirmation to SGX RegCo that the Enhanced Share Issue Limit is in the interest of the issuer and its shareholders;
compliance with any applicable legal requirements governing the issuer and the constitution/trust deed of the issuer (or the equivalent in the issuer’s country of incorporation) arising from the Enhanced Share Issue Limit;
issue of not more than 100% of the issuer’s total number of issued shares excluding treasury shares and subsidiary holdings in each class at the conclusion of the first annual general meeting of the issuer following the passing of the resolution on the general mandate for the Enhanced Share Issue Limit.
The issuer disclosing in the notice of general meeting:-
a. why the Board of Directors is of the view that the Enhanced Share Issue Limit is in the interest of the issuer and its shareholders and their basis for forming such views;
b. that the Enhanced Share Issue Limit may be renewed annually during the issuer’s annual general meeting (“AGM”) and is only valid until 31 December 2021, by which date the shares and/or convertible securities issued pursuant to the Enhanced Share Issue Limit must be listed; and no further shares[4] and/or convertible securities shall be issued under this limit; and
c. if the issuer is seeking shareholders’ approval via an EGM and has utilised any part of the existing share issue mandate (“Existing Amount Used”), the issuer is to disclose as at the latest practicable date[5], the remaining balance that would be available under the Enhanced Share Issue Limit after deducting the Existing Amount Used.
The issuer notifying SGX RegCo of the following, by way of email to enhancedsharelimit@sgx.com when the general mandate for the Enhanced Share Issue Limit has been approved by shareholders:-
a. name of issuer; and
b. date on which such general mandate is approved by shareholders.
The issuer disclosing that it is utilising the Enhanced Share Issue Limit in its announcement of an issue of shares or convertible securities in this regard. Please note that the notice of general meeting does not have to be cleared with SGX RegCo and no circular is required.
SGX RegCo will work closely with our issuers in effecting these measures and giving expedited clearance to their fund-raising efforts.

Paragraph 2.2 of Practice Note 13.2 Watch-List states that the Exchange will conduct half-yearly reviews to identify issuers to be included on the watch-list. The half-yearly review will take place on the first market day of June and December of each year. Upon identifying an issuer for inclusion on the watch-list, the Exchange will promptly notify the issuer of its status.
Listing Rule 1311(1) states that the exchange will place an issuer on the watch-list based on the financial entry criteria if it records pre-tax losses for the three most recently completed consecutive financial years (based on audited full year consolidated accounts); and an average daily market capitalisation of less than S$40 million over the last 6 months.
Listing Rule 806(2) states that a general mandate must limit the aggregate number of shares and convertible securities that may be issued. The limit must be not more than 50% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class, of which the aggregate number of shares and convertible securities issued other than on a pro rata basis to existing shareholders must be not more than 20% of the total number of issued shares excluding treasury shares and subsidiary holdings in each class.
For the avoidance of doubt, shares arising from the convertible securities may be issued and listed beyond 31 December 2021.
The date before the EGM and passing of the Enhanced Share Issue Limit resolution.