The Global Listing Board aims to attract both initial public offering (IPO) candidates and existing Nasdaq-listed issuers with a market capitalization of at least SGD2 billion and an Asian nexus, to dual list on the Nasdaq Global Select Market (Nasdaq GSM) and SGX. The proposals are intended to harmonize the SGX and Nasdaq listing requirements and processes to reduce regulatory friction. We have set out below highlights of the key proposals relating to the Global Listing Board.
What does this mean for an issuer looking to list on the Global Listing Board?
Listing on the Nasdaq GSM
The issuer has to be a debut issuer that will be listed on the Nasdaq GSM, or an existing issuer already listed on the Nasdaq GSM. In particular, issuers already listed on NASDAQ that are eligible to use Form S-3/F-3 may use these short-form registration statements to register additional shares with the U.S. SEC and concurrently conduct a public offering in Singapore.
Market capitalization of at least SGD2bn
To qualify for admission to the Global Listing Board, an issuer must have a market capitalization of at least SGD2bn based on the issue price and post-invitation issued share capital.
Appoint issue managers accredited by SGX for the Singapore offering
Issuer has to appoint issue managers accredited by SGX that are responsible for, among other things, submitting material information to SGX RegCo for review, including all submissions and information provided to the U.S. Securities and Exchange Commission and Nasdaq in support of the issuer’s offering and listing application.
Allocation to Singapore retail investors
Issuers have to allocate to retail investors in Singapore the lower of 5% or SGD50 million of the total value of the securities offered for subscription or sale. The distribution will be carried out through SGX-designated retail brokerages.
Single prospectus in compliance with U.S. securities laws
Issuers may prepare a single prospectus in compliance with the requirements of the U.S. Securities Act of 1933, rather than complying separately with the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018, which may be used for the listing on the Global Listing Board.
Prospectus liability
Issuers and issue managers to the Singapore offering will continue to be subject to prospectus liability under the Singapore Securities and Futures Act.
SGX and MAS have regulatory oversight
The listing application to the Global Listing Board will still be subject to approval by SGX RegCo and registration by MAS respectively. SGX RegCo and MAS will retain the discretion not to approve the listing application and not to register the prospectus, respectively. In particular SGX RegCo may exercise discretionary authority where: (i) an individual associated with the issuer (typically a director, substantial shareholder, executive officer or consultant) has a history of regulatory misconduct; (ii) the issuer has going concern issues (including formal insolvency and restructuring proceedings); (iii) a modified opinion has been issued in respect of the financial statements of the issuer; (iv) an issuer’s current or planned business activities are in violation of Singapore law or the law in a jurisdiction where the issuer operates; or (v) there are any other public interest concerns. SGX RegCo may also require the issuer to propose remedial measures to address these concerns.
Local presence requirement
Issuers will need either a Singapore-resident independent director or a Singapore-based compliance adviser who is familiar with Singapore rules and regulations that apply to the issuer.
Offering timeline aligned between U.S. and Singapore offering
To facilitate concurrent offerings and/or dual listing, MAS has proposed modifications to the prospectus registration timeline. Issuers seeking to list on the Global Listing Board may register their prospectus at any time after the lodgment of its preliminary prospectus (instead of the current mandatory public exposure period of seven days between lodgment and registration). This will allow the Singapore final prospectus to be lodged and registered as soon as the U.S. registration statement becomes effective.
Further, issuers are permitted to engage with retail investors earlier in the IPO prospectus (similar to how retail investors are approached during the bookbuilding stage in a U.S. offering). Note this latter proposal applies to all SGX listing applicants in addition to GLB listing applicants.
Ongoing disclosure in alignment with U.S. requirements
Issuers on the Global Listing Board must ensure that all disclosures made in the U.S. are announced on SGXNET within one trading day after the date they are filed in the U.S. for changes in shareholdings of insiders, and within two trading days for all other filings.
Delisting
An issuer on the Global Listing Board will be subject to delisting if it is delisted from Nasdaq.
Alignment of safe harbors with U.S. practice
To align Singapore regulations with U.S. securities laws, safe harbors for the following actions will be provided (subject to compliance with U.S. securities law conditions): (i) the making of forward-looking statements by Global Listing Board issuers (this applies only to civil and not criminal liability); (ii) repurchases of common stock of Global Listing Board issuers by the issuer and its affiliates; and (iii) trades of common stock pursuant to pre-determined trading plans.
What else would issuers need to look out for?
Due diligence standards to be confirmed
As stated above, issuers and issue managers of Singapore offerings still have prospectus liability under the Singapore Securities and Futures Act. MAS has stated that the Singapore issue managers to the Singapore offering have to conduct due diligence in accordance with Notice SFA 04-N21 on Business Conduct Requirements for Corporate Finance Advisers. MAS is presently considering additional guidance to provide greater clarity on the level of due diligence expected from issue managers for dual listings.
Regulatory interaction in particular on scope and timeline
The circumstances in which SGX may exercise its discretionary authority are illustrative. The consultation papers also do not prescribe when an issuer should commence engaging with SGX. These are two areas for which we may expect further guidance from the regulators in due course.
Settlement and stabilization mechanics
The consultation papers do not prescribe how settlement, closing, and price stabilization is expected to work across Nasdaq and SGX. We expect further guidance from the regulators on such logistical processes in due course as well.
Key takeaways
The introduction of the Global Listing Board represents an exciting development for Singapore’s capital markets, offering a streamlined pathway for high-quality, U.S.-listed companies to access Asian investors through a concurrent listing on the SGX. This initiative has the potential to significantly boost activity on the SGX and enhance Singapore’s position as a leading international financial center.
The consultation period for both consultation papers has now closed, and we await further clarity and guidance on the Global Listing Board framework from MAS and SGX RegCo. We are keeping an eye out for the responses and will issue further updates in due course.
Reach out to any one of our Singapore and U.S. securities law partners, Kenny Kwan, Kyungwon (Won) Lee, Felipe Duque, or Caryn Ng if you have any questions.
Footnote
1. See the Consultation Paper on Proposed Amendments to the Securities and Futures Act and Regulations in Relation to the Global Listing Board issued by MAS, and the Consultation Paper on Introduction of New SGX Global Listing Board - SGX RegCo issued by SGX for further details.
