(Adds details from statement)
SINGAPORE Aug 1 Singapore will implement
wide-scale reforms to its equity market rules following a
penny-stock scandal last year, its central bank and stock
exchange announced on Friday.
After a three-month public consultation process that ended
on May 2, the Monetary Authority of Singapore (MAS) and
Singapore Exchange Ltd (SGX) agreed on a number of
changes including minimum trading prices, new collateral rules,
short-selling reporting, and new independent committees to
examine listing applicants and impose regulatory sanctions. bit.ly/1oUPVBW
From March 2015, Singapore will have a minimum trading price
of S$0.20 ($0.16) for main board-listed issuers and a transition
period of 12 months.
The new rules will impact about 220 companies out of about
800 listed on SGX, but regulators expect most companies to
comply through "share consolidation" during the transition
period, after which there will be a grace period of three years.
"This is to address risks of low-priced securities being
more susceptible to excessive speculation and potential market
manipulation," MAS and SGX said in a statement.
SGX is the front-line regulator of the city-state's stock
market as well as its commercial operator. "Ultra penny stocks"
trade for as little at S$0.001 on its smaller Catalist exchange.
The wide-ranging proposals, due to be implemented over two
years, are aimed at promoting orderly trading, improving
transparency and strengthening the process for admitting new
listings and enforcing against rule breaches.
SGX has seen a drop in trading volume since October when
shares in three companies - Blumont Group Ltd,
LionGold Corp and Asiasons Ltd - crashed and
wiped out about S$8 billion in value in just two days after huge
run-ups in their share prices.
(1 US dollar = 1.2495 Singapore dollars)
(Reporting by Anshuman Daga; Editing by Rachel Armstrong and