8 May, 2016
Survey of ASEAN Regulations
Applicable Regulatory Body and Market Information
Monetary Authority of Singapore (“MAS”)
Singapore Exchange Securities Trading Limited (“SGX-ST”) where the shares or debentures are to be listed onshore
769 listed companies as of 2015.
Market Capitalization of SGD 930,559 million/ USD 659.92 billion as of 2015.
Securities Offering and/or Registration and Exemption Requirements
In general, no offer of shares or debentures can be made to persons in Singapore without a duly lodged and registered prospectus (containing prescribed information) with the MAS.
There are exemptions from the requirement to lodge and register a prospectus with MAS set out in the Securities and Futures Act (Chapter 289) of Singapore (the “SFA”)29, some of which, such as small offers, offers to no more than 50 persons and offers to accredited investors, have advertising restrictions and/or restrictions on selling or promotional expenses.
Resale restrictions generally apply if certain prospectus exemptions are relied upon.
An offer by an entity whose shares or debentures are listed on the SGX-ST, whether by means of a rights issue or otherwise, may be made without a prospectus if it is made in or accompanied by an offer information statement in the form prescribed which is lodged with the MAS, subject to conditions.
If the shares or debentures are to be listed on the SGX-ST, the prospectus must comply with additional disclosure requirements in the SGX-ST’s Listing Manual. The requirements in the SGX-ST Listing Manual are beyond the scope of this guide.
Marketing of Securities Where Issuer/Sponsor Offshore and Investor Onshore
Offers made offshore to onshore investors may still attract regulation due to the extra-territorial application of the SFA.
Therefore, prospectus requirements may still apply to an offer of shares or debentures outside Singapore without a
prospectus, targeted at persons in Singapore.
However, if all aspects of the offer of shares or debentures are outside Singapore and an investor in Singapore is made the offer outside Singapore, it is unlikely that the offer will attract prospectus requirements. An offshore issuer can also rely on prospectus exemptions.
There may additionally be licensing issues under the SFA depending on the mode of offering (Please refer to ‘Other Relevant Considerations’ listed below).
Need to Engage Onshore Sponsor, Licensed Placement or Other Distribution Agent
Yes.30
Legends or Other Disclosure Requiremtns on Offering Materials
Required.31
Other Relevant Considerations
A person making an offer of shares or debentures may be deemed to be carrying on business in dealing in securities and thus require a capital markets services license. However, such person (assuming he/it is an issuer) may work with a licensed or exempt dealer to distribute the shares or debentures solely for the person.
In addition, foreign companies which carry on business in Singapore are required to register under the Companies Act (Chapter 50 of Singapore). If a company makes gains or pro ts from any trade or business in Singapore, such gains or pro ts constitute income that is subject to tax.
To view the complete guide, please click here.
29 The exemptions from prospectus requirements include, amongst others: (a) Small personal offers where the total amount raised from such offers within any 12-month period does not exceed $5 million (or such other amount as may be prescribed by the MAS) under certain conditions; (b) An offer to no more than 50 persons within any period of 12 months and under certain conditions; (c) An offer made in connection with (i) a take-over offer which is in compliance with the Take-over Code, (ii) an offer for the acquisition of all or some of the shares in an unlisted corporation (being a corporation that is not incorporated in Singapore and listed on the SGX-ST)(“unlisted corporation”) to all members of the corporation in compliance with applicable laws and requirements, or (iii) a proposed compromise or arrangement between the unlisted corporation and its creditors or members, and such compromise or arrangement is in compliance with applicable laws and requirements; (d) an offer to enter into an underwriting agreement relating to shares or debentures; (e) Certain offers of shares or debentures of an entity (not being listed in Singapore or corporation not incorporated in Singapore with a secondary listing in Singapore made to existing members or debenture holders of that entity, (f) an offer of shares or debentures of any entity listed on the SGX-ST made to its existing members or debenture holders, (g) an offer of debentures of an entity whose debentures are listed on the SGX-ST, to its existing debenture holders, (h) an offer to qualifying persons like employees of the corporation or its related corpora- tions under speci ed conditions; (i) an offer to speci ed persons, including accredited investors under certain conditions; (j) an offer of debentures made by or guaranteed by the Singapore government or an international nancial institution of which Singapore is a member; (k) offer of shares or debentures which are issued for no consideration; (l) offers of shares or debentures to institutional investors which include, among others: banks, registered nance companies, registered trust companies, pension funds and the Government; and (m) offer in respect of certain international debentures denominated in foreign currency offered by appropriately licensed/exempt persons and subject to certain conditions.
30 If a person wishes to market shares or debentures through direct mailings, telephone calls or in-person visits, the use of a local intermediary licensed to deal in securities (or exempted from the relevant licensing requirements) would be required, unless they fall within a licensing exemption. Licensing obliga- tions under the SFA will be triggered if the content of any website is utilized to market shares or debentures and targeted at Singapore investors.
31 If a person wishes to rely on the prospectus exemptions for small offers, he must give the following statement in writing to the person to whom he makes the offer: “This offer is made in reliance on the exemption under section 272A(1) of the Securities and Futures Act. It is not made in or accompanied by a prospectus that is registered by the Monetary Authority of Singapore.” If a person wishes to rely on the prospectus exemptions to institutional investors and relevant persons such as accredited investors, there is no prescribed disclosure language under law but the market practice is to include language informing the offeree of the reselling restriction. We have included a sample, but please note that this should not be used as a precedent as the language may need to be catered to the speci c document: “The document has not been and will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares / debentures may not be circulated or distributed, nor may the shares / debentures be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as de ned in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore (the “SFA”) (“Institutional Investor”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as de ned in Section 275(2) of the SFA) (“Relevant Person”) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions speci ed in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.”
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann
eng.beng.lee@rajahtann.com
