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SINGAPORE: Parliament passed amendments to the Securities and Futures Act on Thursday (May 7), enabling authorities to put in place a framework to allow companies to dual list on the Singapore Exchange (SGX) and Nasdaq while cutting down on the paperwork.
This comes after the Monetary Authority of Singapore (MAS) announced in November last year that a tie-up between SGX and Nasdaq would allow companies to list in Singapore and the United States at the same time, subject to the completion of relevant regulatory processes.
The dual listing bridge was one of the measures announced by the Equities Market Review Group, which studied ways to boost Singapore’s stock market.
During the debate, 10 Members of Parliament rose in support of the Bill, but raised questions on the pipeline of companies that could list on the Global Listing Board (GLB), and how these firms can maintain liquidity after they list on both exchanges.
In his opening speech, MAS deputy chairman Chee Hong Tat said the Bill introduces a new legislative framework and aims to attract more quality listings to Singapore.
It supports the formation of the GLB, where companies seeking dual listings on the SGX and Nasdaq will list. The board is set to go live in the middle of 2026.
Mr Chee noted that presently, companies that wish to list in SGX and on another overseas exchange face differing requirements. This is not ideal as it increases compliance costs, he said.
The new legislation empowers MAS to set regulations to close differences in the securities laws of Singapore and a foreign country.
Other amendments allow MAS to modify offer-related provisions to facilitate the use of a single set of offer documents and align listing timelines with that of the US.
In parliament on Thursday (May 7), Deputy Chairman of the Monetary Authority of Singapore Chee Hong Tat responded to clarifications sought by Members of the House on the Securities and Futures (Amendment) Bill. The bill was then passed in the House. *Audio issues inherent from source
WHAT IS THE GLOBAL LISTING BOARD?
The GLB is set to be the third equity board on the SGX, set up for the purpose of dual listings on the SGX and Nasdaq.
Companies listing on the GLB operate under a set of harmonised rules and processes, and only need to prepare a single set of offering documents to both exchanges.
These companies will also be allowed to conduct pre-marketing outreach with accredited and institutional investors before the preliminary prospectus is lodged.
The arrangement stipulates that companies must have a minimum market capitalisation of S$2 billion (US$1.6 billion) at the time of listing. At least S$75 million, or 15 per cent of the fundraising for the initial public offering, must be raised in Singapore, depending on which is higher.
Retail brokers are expected to be allocated at least 5 per cent of the value of the Singapore tranche, or S$50 million, whichever is lower.
CONCERNS THAT TRADING MIGRATES OVERSEAS
Several MPs raised questions about how Singapore would ensure meaningful trading activity and liquidity after companies list on the GLB.
Mr Victor Lye (PAP-Ang Mo Kio) said liquidity is what determines market relevance.
“If companies list here, but trading migrates overseas, Singapore captures the ceremony of listing, but not the economics of liquidity,” he said.
“We may gain the headline but lose the heartbeat.”
Associate Professor Jamus Lim (WP-Sengkang) also said that in dual listings, trading and associated liquidity tends to concentrate in the dominant exchange, which is likely to be Nasdaq instead of SGX.
If that happens, Singapore’s “already scarce liquidity” could be leaking away to foreign shores, he said.
“We must surely be careful what we wish for when we promote cross listing, especially with a bigger partner,” he said.
The Securities and Futures (Amendment) Bill is part of the continued effort by the Monetary Authority of Singapore to improve market liquidity in the Singapore Exchange, said MP Jamus Lim. Speaking in parliament in Thursday (May 7), he noted that it has two main elements - legislative changes to facilitate dual listings and refinements to improve regulatory oversight. He pointed out that the trick is to sustain the momentum with concrete policy actions that truly shore up liquidity and keep it in Singapore. He raised concern that Singapore’s push for dual listing may result in its scarce local liquidity leaking to foreign shores. He also asked if parliament will have any role in scrutinising the credibility of other exchanges before they are designated.
Mr Chee, who is also National Development Minister, said he agreed that building liquidity and deepening investor participation are important.
“Growing the equities market cannot … rely only on one silver bullet. It requires a suite of measures that can help to build up the ecosystem steadily and sustainably,” he said.
He said the GLB increases the opportunities and dynamism in Singapore’s equities markets, and if it succeeds, there will be more investor interest and liquidity. That can also spill over to business opportunities for lawyers, accountants and other financial intermediaries.
He acknowledged that success is not guaranteed, but said Singapore is prepared to take calculated risks.
“If you don't try, the probability of success is zero. If you try, it's not 100 per cent, but at least we have a shot at it,” he said.
PIPELINE OF COMPANIES
Several MPs also raised questions about the minimum market capitalisation of S$2 billion for the GLB.
Mr Saktiandi Supaat (PAP-Bishan-Toa Payoh) noted that the threshold can help Singapore capture smaller and mid-sized enterprises that are not well served by the US markets.
But he asked how many Asian companies had a market capitalisation of at least S$2 billion each year over the last decade, and if there are any examples of companies that Singapore is looking to attract.
He wanted to know if there have been engagements with specific companies about their interest in the GLB.
“Being a novel mechanism, attracting notable companies to list as poster child listings could have a significant effect in encouraging issuer and investor interest,” he said.
Mr Ng Shi Xuan (PAP-Sembawang) said the S$2 billion threshold means that the GLB is aimed at a narrow group of large, mature and credible companies.
The proposed focus on companies with an Asian or regional nexus further narrows the pool, he said, raising a question of how many companies would choose this listing pathway.
“Having an Asian nexus is one thing, but having a reason to raise capital in Singapore is another,” he said.
The threshold for the Global Listing Board - a joint initiative of the Singapore Exchange and Nasdaq - is “very high”, at around S$2 billion in market capitalisation, said MP Ng Shi Xuan. Noting that this is aimed at a narrow group of large, mature and credible companies, he asked how many that meet the criteria are willing to take it up. He said a key constraint is whether firms see real value in listing in Singapore, given the additional requirements. The proposed focus on companies with an Asian or regional nexus further narrows the pool. In parliament on Thursday (May 7), Mr Ng also made the point that success is not how many names are on the board; it is whether real activity, real capital and real investor participation are brought into Singapore.
Mr Chee said he believes that as Asia continues to grow, there will be a pool of companies that can meet the requirements, and benefit from the arrangement between SGX and Nasdaq.
Both stock exchanges will work together to engage companies and build a pipeline, he added.
As for the S$2 billion minimum market capitalisation limit, Mr Chee said setting too high a threshold means fewer companies would be eligible to list on the GLB, while setting too low a threshold may mean companies face more difficulties after listing.
It is a judgment call about where to set the threshold, but S$2 billion seems to be the right level, the minister added.
“I certainly do not want to count our chickens before they hatch, but let me just put it this way, there has been healthy interest from potential issuers on this GLB collaboration.”
