Independent listing committee will add expertise

Industry observers welcomed the Singapore Exchange’s proposal of an independent listings advisory committee for SGX, saying that it will help the exchange to make sense of unusual features in potential listings that it has grappled with in the past, such as dual class shares.

Comments

Guanyu 道 said…
Independent listing committee will add expertise

But composition will be extremely critical: observers

Andrea Soh
11 February 2014

Industry observers welcomed the Singapore Exchange’s proposal of an independent listings advisory committee for SGX, saying that it will help the exchange to make sense of unusual features in potential listings that it has grappled with in the past, such as dual class shares.

“The reference to an industry panel would allow the SGX to tap expertise and, in this way, help the listing process when a difficult issue arises,” said UBS head of corporate client solutions Choo Oi Yee.

In a wide-ranging consultation paper announced last Friday, the Monetary Authority of Singapore (MAS) and SGX made proposals for independent listing, disciplinary and appeal committees, in response to concerns over the exchange’s dual roles as both a commercial entity and a listing regulator.

The independent listing advisory committee will comprise 15 members drawn from investment banking, accounting and legal professionals, among others.

Listing applications will still be reviewed and approved by SGX. But if they meet one of three criteria - present unprecedented issues such as a new jurisdiction, sector or having unusual features or structures; require specialised expertise; or involve matters of public interests such as high profile cases - they would go before the independent committee.

The composition of the independent listing committee will be critical, said Rachel Eng, joint managing partner of WongPartnership.

“The process is already quite stringent, so I doubt they will add another similar layer as it wouldn’t help,” she said. “I think they should look for people who can add value.”

This includes those with expertise in certain sectors or countries.

Compared to the past, when companies that listed were typically manufactuerers, “nowadays with globalisation and new products and services, you’re coming up with new business models or new types of business”, Ms Eng added. “It is not as straightforward as before.”

The diversity of the committee will also be important, said UBS’s Ms Choo.

“Having the independent listing committee is good. But some careful consideration needs to go into who is going to be on this listing committee,” she said. “It would be constructive to ensure a diversity of views incorporating international best practices, whether from foreign banks or law firms, given the increasing globality of listings.”

Industry observers do not expect the time to market for initial public offerings to be affected, nor procedures for listings to be made more onerous as a result of the independent committee.

Hong Kong, which has a similar approach, “has attracted a wide range of IPO candidates over the recent years, and their number is still growing”, noted RHTLaw Taylor Wessing managing partner Tan Chong Huat. “It is unlikely that the independent listing committee will make it more onerous for new listings and make SGX less attractive.”

The proposed changes will, in fact, put SGX closer in its regulatory practice to markets such as the United States, where an external regulator, the US Securities and Exchange Commission, reviews listing applications, noted Shook Lin & Bok partner Robson Lee. “(These) will better augment the current practice of the SGX.”

Popular posts from this blog