New Singapore rules could boost foreign investment

Jun 26, 2014
<p>Proposals would ease secondary listing requirements for companies from developed nations, says BNY Mellon</p>

Singapore Exchange (SGX) could draw more foreign investors and bolster its status as a world financial center if it moves ahead with proposals to ease listing requirements for companies that are already listed in a developed nation, according to BNY Mellon.

The exchange would also boost its liquidity and draw more investors from around the world if it passes proposals that would establish two tiers of regulatory oversight of secondary listings, the bank says in a statement.

‘More than 40 percent of companies listed on SGX today are from overseas and there are 33 companies with a secondary listing,’ says Neil Atkinson, head of BNY Mellon’s depositary receipts business in Asia-Pacific. ‘Should SGX’s proposals go ahead, we expect this number to increase as it [would] make Singapore a much more compelling proposition for the increasing number of foreign companies gazing East and eyeing access to the growing pools of available capital and business prospects in the region.’

Early this month, SGX proposed the creation of a new regulatory framework that would eliminate additional continuing listing obligations for companies seeking a secondary listing in Singapore if they already have a primary listing in one of the 23 developed markets, as classified by both FTSE and MSCI.

The exchange, currently the largest institutional investor base in Asia with $2 tn in assets under management, said in a June 4 press release that it may continue to impose additional continuing listing obligations on companies from developing markets in order to ‘enhance shareholder protection and corporate governance standards’.

The proposals were up for public comment until June 25 and SGX says it hopes to implement them by the end of this year. It says it also intends to help investors more easily distinguish between primary and secondary listings on the exchange by, for example, segregating their stock listings on its website.

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