SINGAPORE: SGX RegCo Removes Minimum Trading Price Rule

Tuesday May 12 2020

On 11^th May 2020, Singapore Exchange Regulation (SGX RegCo) announced it is removing the minimum trading price (MTP) rule for Mainboard issuers with effect from 1 June 2020.

Since the implementation of a series of anti-manipulation tools, the number of manipulation alerts triggered on the market has declined. These tools include the enhanced Trade with Caution alerts and Member Surveillance Dashboard. In contrast, the MTP framework has turned out to be a blunt tool in addressing risk of manipulation.

The MTP watch-list will cease to exist on 1 June 2020 and Mainboard companies on the list will no longer need to satisfy the exit criteria and apply for removal from the MTP watch-list.

At the same time, SGX RegCo has strengthened the financial watch-list by refining the exit requirements. Starting from 1 June 2020, non-recurrent income or income generated by activities outside the ordinary course of business will be excluded in assessing whether issuers fulfil the profitability test for exiting the financial watch-list.

SGX RegCo will also ignore artificial distortions to share prices that are not representative of true market demand in assessing share price or market capitalisation thresholds in the Mainboard and Catalist listing rules, including the market capitalisation test for exiting the financial watch-list.

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