Cross-referenced from Rules 226(2), 226(3), 226(4) and 228
(a) A sponsor undertaking continuing activities for an issuer must comply with the guidelines in this Practice Note.
2. Regular Contact (Rule 226(2)(a))
(a) As part of maintaining regular contact with its issuer, the continuing sponsor should:
(i) Assess whether the issuer continues to understand its obligations under the Rules.
(ii) Assess whether it is being kept up-to-date with developments at the issuer so that it can advise the company.
(iii) Establish a regular contact routine.
(iv) Hold discussions with the directors where appropriate.
(v) Be satisfied that any procedures established at admission continue to be effective.
(vi) Review the trading and financial performance of the issuer on a regular basis.
(vii) Endeavour to attend shareholder meetings of the issuer.
(viii) In the case of an overseas issuer, arrange for visits as necessary to get a proper understanding of their operations and personnel.
3. Review of Documents Released to the Market (Rule 226(2)(b))
(a) When reviewing documents to be released by the issuer to shareholders or to the market, the sponsor should:
(i) Be readily accessible for reviewing all such documents so that the requirement of immediate disclosure can be met.
(ii) Review the document with a view to ensuring rule compliance and in particular proper disclosure.
(iii) Establish in advance a procedure for the issuer to identify and notify the sponsor of all documents to be released to the market.
(iv) Ensure that the statement required in Rule 753
(2) is included prominently in all documents to be released to its shareholders or the market.
4. Monitor Trading (Rule 226(2)(c))
(a) As part of monitoring the trading of the listed securities of its issuer, the sponsor should:
(i) Be aware of the issuer's daily trading activity.
(ii) Contact the issuer if there is a substantial movement in the price or volume of the issuer's securities, to ascertain whether an announcement or other action is required.
(iii) Arrange for regular press monitoring to identify any material information reported in the press which has not been released via SGXNET. This is particularly important when the sponsor is aware of material undisclosed price-sensitive information in existence.
(iv) Respond speedily to enquiries from the Exchange.
(b) The sponsor may put in place arrangements with third parties for assistance in monitoring.
5. Advise on Changes to the Board (Rule 226(2)(d))
(a) In advising its issuer on the suitability of directors arising from proposed changes in the issuer's board of directors, the sponsor should:
(i) Investigate and consider the suitability of each director and proposed director of the issuer and consider the efficacy of the board as a whole for the company's needs.
(ii) Issue and review directors' questionnaires and review directors' CVs.
(iii) Test the information revealed by the above questionnaires and CVs, for example by conducting third party checks, press searches, ACRA checks and taking-up references. For directors who are not Singapore-based, other appropriate investigations should be undertaken.
(iv) Analyse any issues arising from these investigations, in particular as to how they could affect the issuer's appropriateness for continued listing on Catalist and trading in a public market.
(v) Consider each director's suitability and experience in relation to their (proposed) company role.
(vi) Consider the board of directors as a whole in relation to the issuer's needs, for example given its type, size, profile and that the issuer is listed on a Singapore-based, English-language public market.
6. Trading Halt or Suspension of a Counter (Rule 226(2)(f))
(a) As part of its review of trading, or when an announcement should be made, the sponsor may form the view that the issuer needs to halt the trading in, or suspend, its securities. If so, the sponsor must inform the issuer, together with its reasons, and inform the Exchange at the same time. This allows the Exchange to watch the counter and to expect the request for a trading halt or suspension from the issuer.
(b)The issuer, not the sponsor, requests the Exchange to halt or suspend trading in its securities. If the issuer does not contact the Exchange, the Exchange will contact the issuer for an explanation as to why it has not accepted the advice of its sponsor. The Exchange may take action under the Rules to halt or suspend the securities in the usual way.
7. Listing of Additional Securities (Rule 226(4)(b))
(a) In assessing whether an issuer's listing of additional securities complies with rule and legal requirements, a sponsor should take the following into consideration and determine if disclosure in a circular and/or announcement is necessary:
(i) The financial position of issuer, including:
(A) if the group is currently under pressure from its bankers to repay any of its borrowings and whether there are any arrangements for refinancing of the group's borrowings; and
(B) whether the group has sufficient resources to meet its capital commitments.
(ii) In a rights issue:
(A) the amount of cash raised from issues of securities in the past 2 years and whether the proceeds were used for the intended purposes; and
(B) if applicable, whether a valid share issue mandate is available and sufficient for the proposed issue of securities.
(iii) In an issue of convertible securities:
(A) the form, basis of allotment, exercise price, exercise period and whether the convertible securities are detachable;
(B) the number of new shares that will be issued upon full exercise or conversion of the proposed convertible securities as a percentage of the applicant's issued shares as at the date of the application; and
(C) the number of new shares that will be issued upon full exercise or conversion of the proposed convertible securities and all outstanding convertible securities as a percentage of the applicant's issued shares as at the date of the application.
(iv) In an issue of shares for cash under Part IV of Chapter 8:
(A) the issue price and the weighted average price for the period specified in Rule 811
(B) the amount of cash raised from issues of securities in the market in the past 2 years and a statement on whether the proceeds had been used for the intended purposes;
(C) where the end-placee(s) is not procured by a placement agent, that the end-placee(s) and its(their) directors and substantial shareholders (if applicable) have no connections (including any business relationship) with the issuer and its directors and substantial shareholders; and
(D) if applicable, whether a valid share issue mandate is available and sufficient for the proposed issue of securities.
8. Ending of Sponsorship (Rule 228)
(a) An outgoing sponsor should discuss its experience of the issuer and the reasons for ending the sponsorship. The Rules require an outgoing sponsor to be constructive and open with a prospective new sponsor.
(b) The outgoing sponsor must disclose any compliance issues to the incoming sponsor in order to meet its obligation under Rule 228
(5). If the issuer is not in compliance with the Rules, or is in poor financial health, the new sponsor may require rectification or disclosure before it starts its sponsorship role. In this event, the incoming sponsor should liaise with the Exchange to ensure that a smooth transfer of responsibilities from the outgoing sponsor to the incoming sponsor is possible.