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Treasury & Capital Markets
SGX regulator seeks to boost investors’ say in listed firms
Proposal on requisitions aims to strengthen role of shareholders in driving change and market discipline
The Asset 23 Apr 2024

Singapore Exchange Regulation (SGX RegCo) is proposing a rule change to require listed companies to assist shareholders who have requisitioned a general meeting, as part of its effort to improve company engagements with shareholders.

Under the proposal, issuers should start facilitating such requisitions within 21 days of receipt of the notice. An issuer who disputes the validity of the requisition notice must apply for a court ruling within the same period.

SGX RegCo is the exchange’s independent subsidiary undertaking all frontline regulatory functions, including as securities market regulator.

While the board of directors of a listed issuer is the party that calls for general meetings, occasions may arise where shareholders may wish to draw certain matters to the attention of other shareholders, the regulator explains.

A shareholder, or shareholders acting together, may requisition a general meeting to put resolutions before other shareholders. Such resolutions may be for various purposes, including removing or replacing specific directors or the entire board, or effecting or terminating particular transactions.

"If investors have a stronger say, companies will be more motivated to consider their interests by improving both operational performance and shareholder returns,” says RegCo chief executive officer Tan Boon Gin. “By enabling the convening of general meetings, we empower shareholders to drive change and exercise market discipline."

“In addition to encouraging market discipline, we are working on two other areas to spur companies to increase shareholder value: the strengthening of the board to enhance company performance and a reduction in market friction. Initiatives to improve the quality of boards and amplify shareholder voice have already been put in place; other measures are still in development and we will keep the market updated," Tan adds.

Procedural requirements

Some areas in which SGX RegCo sees the issuer providing help to requisitionists include:

  • Releasing announcements and documents, such as notices, circulars and proxy forms, on SGXNet;
  • Sending documents, such as notices, circulars and proxy forms, to shareholders;
  • Collating any proxy forms submitted by shareholders at the issuer’s registered office;
  • Securing the board’s attendance at the shareholder-requisitioned meeting;
  • Enabling the appointed scrutineer to discharge its duties; and
  • Instructing its agents, including its share registrar and company secretary, to provide any necessary assistance such as preparing the mailing labels for the purposes of sending documents to shareholders and attending the shareholder-requisitioned meeting.

According to SGX RegCo, the requisition notice must meet the procedural requirements of the Companies Act 1967 of Singapore, including that requisitionists must hold at least 10% of the total number of paid-up shares.

To facilitate the board’s assessment on the validity of the requisition notice, the requisition notice should minimally encompass the names and shareholdings of the requisitionists and a description of the resolutions proposed to be tabled at the shareholder-requisitioned meeting.

When the board receives a requisition notice, it should immediately inform shareholders via SGXNet. Any subsequent material developments, including any application filed to court, should also be immediately announced, the regulator says.

The public consultation on the proposal is open until May 23.

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