The move is part of plans by Singapore Exchange Regulation (SGX RegCo) to hold Catalist sponsors to greater accountability and address key concerns in regulating the junior board.
SGX RegCo on Thursday released its inaugural «Findings and Recommendations on Continuing Sponsorship Work,» which aims to highlight areas for improvement following its observations from reviews and inspections of sponsors.
The Catalist regime has two types of sponsors – Full Sponsors who generally conduct introducing activities including preparing companies for an IPO on Catalist – and Continuing Sponsors who work with companies on continuing listing obligations. A total of 20 sponsors are qualified to perform continuing sponsorship work of whom 16 can also conduct introducing work.
The publication focuses on four areas of continuing sponsorship work: client acceptance, assessment of suitability of board and key management, continuous monitoring, conflict of interest, and sponsor independence.
Increasing Transparency
«Our sponsors are the linchpin of the Catalist regime, protecting the interests of both investors and issuers. We firmly believe this publication will increase transparency, promote best practices and result in greater accountability within the regime,» Tan Boon Gin, CEO of SGX RegCo, said.
The Catalist regime caters to the needs of fast-growing enterprises. Unlike a mainboard listing, which is subject to review and approval by the exchange and the Monetary Authority of Singapore (MAS), companies seeking a primary listing on the Catalist are brought to list by authorized Full Sponsors via an initial public offering (IPO) or a reverse takeover. There are no quantitative entry criteria required by SGX. Instead, Full Sponsors decide if the listing applicant is suitable to be listed.
The total number of companies listed on Catalist is currently 217, with a combined market capitalization of about S$9 billion ($6.57 billion).
