Response to "Cost-Effective IPO System? Check Out US" (Straits Times, 17 June 2004)
I refer to "Cost-effective IPO system? Check out US" (ST, 17 June 2004).
2 As part of the Government-wide initiative to encourage entrepreneurship, the Monetary Authority of Singapore (MAS) has been reviewing the Securities and Futures Act (SFA) to make it easier and less expensive for companies to raise funds without compromising the level and quality of disclosure to potential investors.
3 Under the SFA, prospectus requirements are already exempted for several classes of offers where the absence of a prospectus would not be prejudicial to public interest. These include offers that are available only to a select group of investors or where the information in a prospectus is available from other sources.
4 On the recommendation of the private-sector led Company Legislation and Regulatory Framework Committee (CLRFC), MAS will amend the SFA later this year to introduce additional exemptions. Private placements made to not more than 20 investors and small offerings of up to $5 million will then not require a prospectus. These changes will be particularly relevant for small and medium sized enterprises (SMEs).
5 Various government agencies are also studying ways to help SMEs access the capital markets for funds. One option currently being explored includes using asset securitization as a financing alternative for SMEs.
6 To the extent that gaps in SME financing could be filled by other financing mechanisms such as a private equity exchange (PEX), MAS will be supportive of such initiatives. The current regulatory framework is able to accommodate the set up of a PEX in Singapore.
7 MAS recognises that the capital markets are constantly evolving and that the regulatory framework must keep pace to remain responsive and relevant. We will continue to engage the industry to fine-tune our framework.
Angelina Fernandez Director, Communications Monetary Authority of Singapore