Smaller Singapore-listed companies object to proposed minimum trading price

A group of Singapore-listed companies argued on Wednesday against setting a minimum trading price of 20 cents for mainboard listings, saying the move would not boost liquidity.

In a news release, the Small and Middle Capitalisation Companies Association (SMCCA) said they had given their feedback to proposed regulatory changes, including the idea of minimum trading price (MTP).

"SMCCA’s research shows that share consolidation will have a negative impact on trading liquidity as well as price," Tan Choon Wee, president of SMCCA, said. "It would also create unnecessary costs."

Under regulatory changes proposed by the Monetary Authority of Singapore and Singapore Exchange in a joint consultation paper issued in February, mainboard-listed companies that fail to comply with the MTP would be delisted or transferred to another trading facility.

SMCCA, which counts 22 listed firms as members, also said they have asked MAS/SGX not to implement a proposed enforcement framework in its current form.

The proposal would see the creation of listing committees for advisory, discipline and appeals, as well as a widening of SGX's powers to fine issuers and the granting of full investigative powers to SGX.

In its response paper, SMCCA argued that there is no legislative ground for SGX to regulate issuers.

Also, they said that there is also no clear and logical precedence in widening SGX’s current ability to fine sponsors $250,000 for Catalist rule breaches to fining issuers similarly given that the Catalist market is a sponsor-regulated market.

“SMCCA would be glad to sit down with SGX and understand their thinking behind some of these proposed regulatory changes. We do not agree with some of these and we believe that there are better measures to achieve some of the outcomes that they mentioned in their paper," Tan said.

He noted that some of the listed companies provided feedback earlier in the year at SGX-organised feedback sessions, but their comments and feedback were not acknowledged or mentioned in the MAS/SGX Feedback Review Paper in August.