SGX Mainboard lifts minimum trading price rule

MTP watchlist companies are no longer required to satisfy exit criteria.

Singapore Exchange Regulation (SGX RegCo) is removing the minimum trading price (MTP) rule for mainboard issuers starting 1 June, according to an announcement.

The MTP watchlist will cease to exist on 1 June, and mainboard companies on the list will no longer need to satisfy the exit criteria and apply for removal from the MTP watchlist.

The removal of MTP is attributed to the framework turning out to be a blunt tool in addressing the risk of manipulation compared to other anti-manipulation tools, such as enhanced trade with caution alerts and member surveillance dashboard

The shares of most of the issuers in the MTP watchlist were not found to be manipulated but are still subject to risk of delisting due to the MTP rule.

At the same time, SGX RegCo will be refining the exit requirements. Non-recurrent income will be excluded in assessing whether issuers fulfill the profitability test for exiting the financial watchlist.

In addition, an issuer will not meet the profitability test for exiting the financial watchlist if its financial statements are subject to a modified audit opinion, or if its auditors have highlighted a material uncertainty relating to going concern.

SGX RegCo will also ignore artificial distortions to share prices not representative of true market demand when assessing share price or market capitalisation thresholds in the mainboard and catalist listing rules.