MAS Simplifies and Enhances Requirements on Disclosure of Interests in Listed Entities

Singapore, 8 October 2012…The Monetary Authority of Singapore (MAS) will introduce a new disclosure of interests (DOI) regulatory regime to streamline and enhance the existing DOI requirements in listed entities by directors and substantial shareholders. The new regime will take effect on 19 November 2012 and will:

(a) Consolidate all DOI requirements in the SFA

Currently, directors and substantial shareholders of any listed company are required to report their interests, and changes in interests, in securities to the company under the Companies Act, and the Singapore Exchange Limited (SGX) under the SFA. Reporting requirements for business trusts and real estate investment trusts (REITs) are found in the Business Trusts Act and the SFA respectively. Separately, the listed entity is required to announce such information to the market under the SGX Listing Rules. Under the new regime, all notification requirements in respect of interests in listed entities (corporations, business trusts and REITs) will be streamlined and consolidated in the SFA.

(b) Simplify notification process for directors and substantial shareholders

Directors and substantial shareholders will no longer be required to separately report their interests, and changes in interests, in securities to the SGX. This simplifies the reporting process and reduces compliance burden on directors and substantial shareholders. As listed entities will be required to disclose the relevant information to investors, this change to the reporting process will not reduce market transparency.
Further, only the holding company will be required to aggregate the interests of every related corporation for its reporting purposes. For each subsidiary, it will need only to report its own interests. This will cut down the volume of reporting by large corporate groups and reduce compliance costs.

(c) Make it a legal requirement for listed entities to notify investors of interests or changes in interests

To ensure that investors are kept informed of any changes in holdings of directors and substantial shareholders on a timely basis, listed entities will be required to announce the information as soon as possible and no later than the end of the following business day.

(d) Extend reporting obligations to Chief Executive Officer (CEO) who is not a director

The notification requirements applicable to directors will be extended to CEOs who are not directors. Even if the CEO is not a director, he is a key decision maker in respect of operating and financial policies of the listed entity. Hence, information on his dealings in the entity’s securities are relevant to investors.

(e) Extend the DOI requirements to include interests in foreign corporations with a primary listing on the SGX

The legal obligations for directors and substantial shareholders to report their interests or changes in interests, which currently apply only to Singapore-incorporated listed companies, will be extended to foreign-incorporated corporations with a primary listing on the SGX. This levels the playing field between local and foreign listed companies and enhances investors’ protection.

(f) Impose notification requirements on shareholders of trustee-managers of business trusts (BTs) and responsible persons of real estate investment trusts (REITs)

For BTs and REITs where business and assets are externally managed by the manager, investors are likely to be also concerned with the identity of the persons controlling the manager. Under the new regime, a shareholder of the manager of a BT or REIT will be required to give notification when his shareholdings in the manager reaches, crosses or falls below the strategic levels of 15%, 30%, 50% and 75%. Any acquisition or disposal of interest in the securities of the BT or REIT by the manager must also be disclosed.

(g) Introduce stiffer penalties for flagrant breaches

MAS will introduce a stiffer penalty of up to $250,000 and/or imprisonment for a term not exceeding two years for material contraventions which are committed intentionally or recklessly. Civil penalties may also be imposed for such flagrant breaches of the law. This will enable MAS to take enforcement action proportionate to the seriousness of the offence.

(h) Introduce the use of electronic notification forms

In light of feedback received from listed entities, MAS has developed electronic notification forms for use by directors, CEOs and substantial shareholders and unitholders. The SGXNet announcement template has also been re-designed and will allow the listed entity to attach the notification form directly for immediate dissemination. This removes the need for manual entries by the listed entity and increases the efficiency of the reporting process. The requirement to use prescribed notification forms also standardizes the information disclosed to the market.   

2   In formulating the amendments, MAS has carefully considered all feedback received from various rounds of public consultations.The new DOI regime strikes a good balance between consistency, transparency, and flexibility.

3   Over the next few weeks, MAS will work with industry participants and their professional organisations to familiarise relevant stakeholders with the new notification requirements (including the new electronic notification forms).  

4   Timely disclosure of interests is necessary for the proper functioning of a fair, efficient and transparent securities market. Such information will enable investors to make decisions in respect of their acquisition or disposal of securities with knowledge of dealings by directors and CEOs, and changes in ownership and voting control of the listed entity. All persons must exercise due care and diligence to ensure compliance with their disclosure obligations at all times.

5   For more information on the Regulations and prescribed notification forms, please refer to the following links:

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Last Modified on 26/11/2016