Following public consultation, Singapore Exchange (SGX) has decided to widen the practice of listed companies maintaining a privy list to all material transactions, from only certain significant transactions currently.
Respondents to the consultation were generally supportive of the practice of keeping the list which contains details of parties privy to the transaction. They recognised the privy list as a useful regulatory tool when SGX conducts an investigation into, for instance, insider trading. Currently, SGX requires the privy list to be maintained only for certain significant transactions i.e. takeovers, reverse takeovers or very substantial acquisitions.
Due to concerns about the privacy of personal data, companies will be given the flexibility of deciding what information the privy list will contain. More personal data can be provided at a later stage when SGX asks for the privy list.
Besides formal feedback to the consultation, SGX also approached several industry associations including the Singapore Institute of Directors and the Securities Investors Association (Singapore) for informal feedback.
The consultation also considered the proposed codification of a practice for listed companies and/or controlling shareholders to privately notify the exchange of significant transactions. Feedback received showed an overall lack of consensus on the right timing for such private notifications by companies and/or controlling shareholders.
Subsequent to the feedback received, SGX has decided not to proceed with the codification and will stop requiring the notifications. The notifications are made privately to SGX thus not requiring them should not impact investor interest.
Nevertheless, companies remain obliged to exercise vigilance and monitor the trading of their shares when sensitive confidential discussions are on-going, and to make the necessary disclosures as soon as possible where there is any suggestion of unusual trading.
Private notifications to SGX and the maintenance of a privy list were introduced in March 2014 to help the exchange’s surveillance of unusual trading in shares of companies involved in significant transactions.
The changes to the privy list requirement and the removal of the private notification on significant transactions are effective 1 December 2015.