SGX mulls setting minimum share price for mainboard-listed firms

Cheap securities pose significant risk.

The Singapore Exchange (SGX) yesterday unveiled a detailed proposal on the minimum trading price requirement and proposed changes to the existing watch-list, which aims to address risks associated with cheap stocks and improve overall market quality.

Under the proposal, the SGX will set a minimum trading price of S$0.20 for Mainboard stocks. A one-time transition period of 12 months from the date of introduction of the minimum trading price requirement will be given to affected issuers to undertake corporate actions to meet the new requirement.

Those which are unable to meet the requirement after the 12-month transition period will be placed on a watch-list. Issuers which are unable to take steps to raise its minimum trading price and exit the watch-list will be delisted after a 36-month cure period.

SGX targets to introduce the minimum trading price requirement and adjustments to the existing watch-list requirements by March 2015, and for them to take effect from March 2016.

The Consultation Paper covering proposals on both the minimum trading price and notification requirements can be viewed at https://www.sgx.com/wps/portal/sgxweb/home/regulation/consult_pub/consult_papers