MAS review group to study Catalist board, expand investor protection in next set of measures
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More measures are being considered and will be announced in the months ahead.
PHOTO: LIANHE ZAOBAO
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SINGAPORE - More measures are being studied to reform the Singapore stock market, after the first measures to attract new listings boost investor confidence
The measures were described by Temasek chief executive Dilhan Pillay as “the most significant” in reforming the Singapore stock market in almost 30 years.
They included a $5 billion scheme backed by the Monetary Authority of Singapore (MAS) to invest in local stocks, requiring family offices to invest in Singapore-listed companies, and simplifying the stock market regulatory regime.
Second Minister for Finance and MAS deputy chairman Chee Hong Tat, who also chairs a review group tasked with recommending and implementing the measures, said its focus is on making the local stock market attractive to companies from Singapore and the region, enabling them to raise capital here.
The announcements came after tax incentives and rebates to encourage companies and funds to list here were announced during Budget 2025 on Feb 18, with plans to extend and expand similar incentives for Singapore-listed real estate investment trusts.
More measures are being considered and will be announced in the months ahead.
These include undertaking a review of Singapore Exchange’s (SGX) Catalist board, which was established in 2007 to facilitate the listing of smaller, fast-growing companies that may not meet the mainboard’s listing requirements.
But while Catalist offers companies a more flexible listing regime, some firms are loss-making with limited growth potential, and many are poorly traded.
“The review group notes that SGX is reviewing the value proposition and regulatory framework of Catalist, and will consider further measures in due course,” MAS said.
Speaking to The Straits Times, chairman of Singapore Exchange Regulation Tan Cheng Han said: “One question which we have to ask ourselves is, given the changes that we are making to mainboard listings, what do we now see the role of Catalist as?
“Do we want it to be a more specialist board that caters to certain types of pre-profit type companies? Do we want to make it a high-tech board? These are all issues that we need to think about.”
The group will also look into stronger investor protection by improving avenues for investors to seek legal compensation for losses caused by market misconduct, particularly in cases involving listed companies.
He said: “The review group will continue to engage with MAS on proposals to enhance the avenues for investors to commence civil suits and introduce measures to aid these investors to take collective action.”
It will be considering ways to equip and encourage firms to communicate their growth and business plans to shareholders. The aim is to raise investor interest in listed companies and give them more confidence to invest by reducing information asymmetry in the market, where one party has more information than the other.
There are also ongoing reviews to widen research coverage and improve retail investors’ access to such research.
Feedback revealed that the due diligence requirements and guidelines for issue managers are currently too prescriptive, and may have resulted in overly cautious interpretation and implementation.
Issue managers are financial institutions, typically investment banks or securities firms, that guide firms on the best way to structure a listing, including deciding on the type of securities to issue, the timing, pricing, and market conditions.
“The review group will consider the merits of recalibrating these requirements to allow greater flexibility for issue managers to exercise professional judgment and adopt alternative approaches that can provide similar levels of assurance,” MAS said.
Studies on whether grants to defray the costs of issuing depository receipts (DRs) will facilitate the development of the product class in Singapore are being conducted.
DRs provide Singapore investors with a simplified means of accessing foreign shares without the complexities of cross-border trading. For Singapore firms, having DRs listed overseas also helps broaden their investor base and improve trading interest in the underlying counter listed in Singapore.
In that light, grant support to defray the costs of issuing DRs can encourage greater participation in DR listings and facilitate greater cross-border flows and partnerships across exchanges and brokerages, MAS said.
The first exchange-level DR cooperation in Asean, the Thailand-Singapore DR collaboration, included eight Thai blue-chip firms launched as DRs on SGX, while seven Singapore blue-chip companies and two exchange-traded funds launched as DRs on The Stock Exchange of Thailand.
