The execution stage begins with a due diligence exercise where the due diligence process is conducted on the listing entities to ensure the prospectus or offer document complies with the legal or accounting requirements, and the disclosure of the material information is prepared. The company will also need to undertake a corporate restructuring exercise to form the holding company being the listing entity which will hold the group of companies.
The lawyers will work with the company to draft the prospectus or offer document based on the specific requirements of the Fifth Schedule of the Securities and Futures Regulation. Drafting and verification meetings. The management team and IPO professional team will meet regularly for drafting meetings, which involve the drafting and review of the respective sections required for the prospectus or offer document and the collation of the source documents to support the contents.
Due diligence verification meetings will be held to check and verify the contents of the final draft prospectus or offer document prior to the submission to the SGX, lodgement or registration process. This is to ensure that the material statements of fact or opinion contained in the prospectus or offer document are complete and accurate.
Submission to the SGX. The issue manager or sponsor will submit the draft prospectus or offer document to the SGX to seek its approval for the listing of the company. The SGX will review the application and raise queries to the issue manager or sponsor, who will work with the company and other IPO professional team to address these queries in order to obtain the listing approval from the SGX.
Once the listing approval is obtained, the company will then complete the restructuring exercise and convert the status of the company from a private to a public company to prepare for the next stage. Lodgement and registration of the prospectus or offer document.
This will provide an avenue for the public to air any serious concerns they may have, which serves as an additional avenue to safeguard the public interest for the listing of the company. After clearing the exposure period, the company can proceed to register its prospectus or offer document and launch its offer for shares to the public. After the close of the offer for shares, the company will be listed on either the Mainboard or the Catalist as the case may be and commence trading of its shares thereafter, which will generally take place around one week after the launch of the offer for its shares.
The timeline for an IPO process varies for different companies. Generally, the pre-submission process will take about four to nine months after the kick-off meeting depending on the readiness of the listing applicant and the listing approval stage can take between two to three months depending on the complexity of the listing group and issues arising.
Quite often, an IPO process can take in excess of 12 months from the kick-off meeting to complete, and it is not uncommon for delays and postponements to the submission of the listing application to the SGX, as the pre-submission work for the IPO has not been completed.
The key factors affecting the timelines of an IPO process are the readiness of the listing applicant for the IPO exercise and the commitment of the management team. Most of the time, the management team does not realise the extent of the time and resources commitment required for an IPO exercise. One of the common issues for companies facing delays in an IPO exercise is that the audit work for the last three financial years cannot be completed in time as the operational and accounting systems of the group seeking listing are not sufficiently robust to pass the rigorous audit process of the independent auditors.
Other than facing cost overruns due to the additional work to be performed by the IPO professional team arising from the time delay, the management team will also not be able to use the additional time and resources that have been committed to the IPO process to otherwise generate productive business and revenues for the group. The organisations involved in the regulatory framework for the listing process in Singapore and their respective roles are as follows:.
The MAS is the licensing authority for holders of a capital markets services licence, who are permitted to carry on a business in the regulated activities of dealing in securities, trading in futures contracts, leveraged foreign exchange trading, fund management, advising on corporate finance, securities financing, real estate investment trust management, and providing custodial services for securities.
SGX is under the supervision of the MAS in relation to the listing of companies and other securities matters in Singapore. SGX is the primary regulator, whose approval must be obtained before a company can be listed in Singapore. It continues to regulate listed companies after their listing to ensure that they comply with the continuing listing obligations.
Where a company is listed on the Catalist board, the sponsors will assist the SGX in monitoring these Catalist issuers in regard to their compliance with the listing rules. These sponsors are in turn supervised by the SGX. Listed companies are required to comply with listing rules, which are designed to promote the high standard of disclosure and corporate governance expected of listed companies. Under the Singapore Securities and Futures Act, a prospectus or offer document serves as an important document which is required to contain true and full disclosure of the company seeking a listing.
Some of the important disclosures that are required to be made in the prospectus or offer document include:. The SGX is the primary regulator having oversight of the securities market and compliance of the continuing listing obligations by issuers in Singapore. Companies listed in Singapore are required to ensure full, accurate and timely disclosures of material information in order to maintain a fair, orderly and efficient market for the trading of their shares.
In addition, listed companies are required to comply with the continuing listing obligations set out in the SGX listing rules, which include the changes in share capital, IPTs, acquisitions and realisations by the issuer, takeovers and the issue of circulars and annual reports to shareholders.
Following the listing on the SGX, a publicly listed company is obliged to comply with the provisions of the SGX listing rules: Mainboard listed companies must comply with Mainboard Rules; and Catalist listed companies must comply with Catalist Rules. Some of the continuing listing obligations of a listed company in Singapore under SGX listing rules are outlined below:. Matters requiring immediate public announcements. The following is a non-exclusive list of matters which require immediate public announcement:.
Disclosure of other price-sensitive relevant information. All information which is necessary to avoid the establishment of a false market or is likely to materially affect the price of securities must be disclosed immediately. To ensure that such information is released to the market on a timely basis, listed companies are obliged to comply with the rules relating to corporate disclosure in the SGX listing rules. It includes beneficial ownership through nominees or a trust, as well as control over voting or disposition of a share i.
Directors of a listed company are required to notify the company of their direct and indirect interests in its shares and securities and subsequent changes thereafter. Interested Person Transaction. The objective of disclosure in relation to an IPT is to guard against the risk that such interested persons can influence the listed company to enter into transactions with other interested persons including directors, senior management, controlling shareholders and their associates which may adversely affect the listed company.
Periodic reporting. Listed companies are required to announce their financial statements for the relevant financial period within 45 days of the end of that financial period. Their financial statements for the full financial year are required to be announced within 60 days after the end of the financial year end.
Listed companies must hold their annual general meeting within four months of the end of the financial year, during which their annual reports will be tabled for approval by their shareholders. Sustainability reporting. The new requirements took effect from the financial year ending 31 December Listed companies are required to observe the Code of Corporate Governance and disclose in their annual reports the corporate governance practices adopted by them.
Although the Code of Corporate Governance, which comes under the purview of the MAS and SGX, has no force of law, listed companies are required to explain any deviations from any principles and guidelines. In connection with an IPO, lapses which attract liability under the Securities and Futures Act include making false or misleading statements in the prospectus or offer document, omission of material information required to be included in the prospectus or offer document, as well as new circumstances which have arisen since the lodgement of the prospectus or offer document.
Lapses may also be discovered during the period between the registration of the prospectus or offer document and close of the offer. For instance, if it is confirmed that there are misstatements in the prospectus or offer document which were discovered after the launch of the IPO but prior to the close of the offer, the listing applicant can withdraw the offer and refund application monies to investors. Due diligence plays an important role in the IPO process from the kick-off meeting through to the submission of the listing application to the SGX, as well as the lodgement and registration of the prospectus or offer document.
An effective due diligence process supported by the relevant source documents is essential, especially if the issue manager or any other relevant party wishes to rely on the due diligence defence under the Securities and Futures Act when the need arises. An effective due diligence process also helps issue managers and sponsors to identify issues and concerns that must be addressed, and provides adequate disclosures in the prospectus or offer document. The IPO process requires that the professional advisers exercise great care and diligence to ensure that the disclosures in the prospectus or offer document in relation to the IPO and the listing group are true, accurate and complete.
As such, it is important to put in place an efficient process through which material and relevant information relating to the listing group is made available by the management team to the IPO professionals for disclosure in the prospectus or offer document. This process is a continuing process from the kick-off meeting until the first trading day of the shares of the listed company.
The statutory prescribed information to be disclosed in the prospectus or offer document is found in the Fifth Schedule of the Securities and Futures Regulation. The Association of Banks in Singapore also issued its latest set of Listings Due Diligence Guidelines in to provide guidance to issue managers and sponsors in their conduct of the due diligence work in the listing process.
Under the Securities and Futures Act, persons who could be liable for any false or misleading statement in the prospectus include:. Directors of the listed company are subject to collective and individual legal responsibility for the contents of the prospectus or offer document, and they must ensure that all material information of the listing group is fully disclosed and statements therein are true, complete and accurate in all material respects.
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Restructuring and insolvency for corporate lawyers. Doing business in key global jurisdictions. Sign-in Help. What is the size of the market for initial public offerings IPOs in your jurisdiction? Who are the issuers in the IPO market? Do domestic companies tend to list at home or overseas? Do overseas companies list in your market? What are the primary exchanges for IPOs? How do they differ? Which bodies are responsible for rulemaking and enforcing the rules on IPOs? Must issuers seek authorisation for a listing?
What information must issuers provide to the listing authority and how is it assessed? What information must be made available to prospective investors and how must it be presented? What restrictions on publicity and marketing apply during the IPO process?
What sanctions can public enforcers impose for breach of IPO rules? On whom? Describe the timetable of a typical IPO and stock exchange listing in your jurisdiction. What are the usual costs and fees for conducting an IPO?
What corporate governance requirements are typical or required of issuers conducting an IPO and obtaining a stock exchange listing in your jurisdiction? Are there special allowances for certain types of new issuers? What types of anti-takeover devices are typically implemented by IPO issuers in your jurisdiction?
Are there generally applicable rules relevant to takeovers that are relevant? What are the main considerations for foreign issuers looking to list in your jurisdiction? Are there special requirements for foreign issuer IPOs?
Where a foreign issuer is conducting an IPO outside your jurisdiction but not conducting a public offering within your jurisdiction, are there exemptions available to permit sales to investors within your jurisdiction? Are there any unique tax issues that are relevant to IPOs in your jurisdiction? In which fora can IPO investors seek redress? Is non-judicial resolution of complaints a possibility? Are class actions possible in IPO-related claims? What are the causes of action? Whom can investors sue?
And what remedies may investors seek? Are there any other current developments or emerging trends that should be noted? What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended to address these concerns? What best practices are advisable for clients?
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Furthermore, the fund will provide pre-IPO financing and support businesses in their journey towards a public listing. The Growth IPO Fund focuses on late-stage private enterprises that are only a few more funding rounds away from listing typically a Series B or later. Under this scheme, the SGX will provide tailored solutions to support the various needs of high-growth companies.
These solutions are:. We also have partner firms in Malaysia , Bangladesh , the Philippines , and Thailand as well as our practices in China and India. Please contact us at asia dezshira. An Introduction to Doing Business in Singapore is designed to introduce the fundamentals of investing in Your email address will not be published.
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