Advancing a disclosure-based regime

SGX RegCo’s reform focuses on reducing prescriptive requirements in favour of disclosure of decision-useful information for investors, while preserving safeguards that uphold market quality and investor trust. This update highlights four notable changes under the new regime.

Streamlined listing process focused on robust disclosures

(1) Disclosure of material weaknesses in internal control and accounting systems

SGX RegCo will no longer require a listing applicant to confirm the non-materiality of any weaknesses in its internal control and accounting systems. Instead, the listing applicant will now have to disclose the material weaknesses in the internal control and accounting systems and the steps to address them, which may continue after listing.

This approach will enhance transparency by informing investors of material internal control issues and the issuer’s commitment to remediation, which can influence investment decisions. This is compared to a bare confirmation of non-materiality, which has limited informational value and is subjective in nature. This approach would also give issuers time to improve their internal controls without delaying their listing, in alignment with the practices of other jurisdictions.

(2) Lowering the S$30 million profit criterion to S$10 million

SGX RegCo will lower the profit test requirement in Mainboard Rule 210(2)(a) from S$30 million to S$10 million, aligning with other major stock exchanges. The SGX RegCo recognises that companies with strong growth potential in emerging industries may be suitable listing candidates on the Mainboard, notwithstanding that they may not meet traditional financial criteria due to the unique circumstances of their industries. The listing of such companies will widen the diversity of offerings on the Mainboard and offer investors a wider choice of quality companies in which to invest.

Maintaining rigorous oversight post-listing while minimising unnecessary friction

(3) Removal of the financial watch-list

SGX RegCo has removed the financial watch-list because it has the unintended effect of hindering issuers’ ability to secure funding and attract customers, making it difficult for them to improve their financial position. This negative perception may also depress the share prices of such issuers, affecting investors. All issuers currently on the financial watch-list have been automatically removed from 29 October 2025.

(4) Revised trading suspension approach

SGX RegCo will now limit trading suspensions to situations with clear evidence of going concern issues, instead of imposing a suspension if the issuer’s state of affairs is unclear or its ability to continue as a going concern is in doubt. Such evidence includes (a) the commencement of formal insolvency or restructuring proceedings, and (b) the board being unable or unwilling to confirm as well as state the basis for the issuer’s ability to continue as a going concern. This revised trading suspension approach for financially distressed issuers will minimise unnecessary market disruption, allowing investors to continue trading based on disclosed information.

MAS’ proposal to consolidate listing review functions under SGX RegCo

The Mainboard listing process is currently bifurcated: SGX RegCo assesses listing suitability under the SGX Listing Manual, while MAS reviews prospectuses for compliance with statutory disclosure requirements under Part 13 of the Securities and Futures Act 2001 (SFA). To streamline this process, MAS proposes to delegate its powers, functions, and duties concerning prospectus lodgment and registration for Mainboard listings to SGX RegCo, by appointing SGX RegCo as its assistant under section 320(1) of the SFA.This approach will apply to corporations, business trusts, and real estate investment trusts (REITs) seeking a Mainboard listing.

Under the proposed approach:

• An issuer seeking a Mainboard listing will submit its listing application and draft prospectus to the SGX RegCo. SGX RegCo will then review both submissions, accept lodgment of preliminary prospectuses and other offer documents (including profile statements, product highlight sheets, and information to be incorporated in the prospectus by reference), administer public exposure, and register the final prospectuses or profile statements.
• SGX RegCo will be empowered to refuse registration of the final prospectus on the grounds set out in sections 240(13), 240(14), 296(10), and 296(11) of the SFA; accept lodgment of supplementary or replacement documents; and issue interim and final stop orders on the issuer to direct that no, or no further, securities, securities-based derivatives contracts, or units in the REIT be allotted, issued, or sold.
• After the listing, SGX RegCo will accept all lodgments of offer information statements lodged by all SGX-listed issuers.

MAS will retain its role as the statutory regulator, overseeing SGX RegCo’s performance of delegated functions, retaining investigative and enforcement powers for breaches under Part 13 of the SFA, setting disclosure requirements, and deciding on exemptions. The authorisation and recognition of REITs and business trusts will remain with MAS.

MAS is now consulting on the proposed approach to consolidate listing suitability and prospectus review functions under SGX RegCo to streamline the listing process for issuers. Concurrently, MAS is undertaking a holistic review of SGX RegCo’s mandate, governance, and resourcing frameworks to ensure that SGX RegCo is equipped to discharge expanded regulatory responsibilities. In tandem with MAS’ consultation, SGX RegCo is proposing changes to SGX’s listing rules to operationalise the proposed consolidation.

Conclusion

The latest measures by SGX RegCo to advance a more disclosure-based regulatory regime, together with MAS’ proposal to consolidate key regulatory functions, represent a significant step towards enhancing the vitality and efficiency of Singapore’s capital markets scene. These changes are expected to further strengthen Singapore’s position as an international capital markets hub, while maintaining robust investor protection and market integrity.

Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style Reed Smith Pte Ltd (hereafter collectively, "Reed Smith"). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith's Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.

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