Singapore is one of the world's foremost international financial centres. Its sound economic and financial fundamentals and pleasant business environment attract a number of Hong Kong or PRC based enterprises seeking to obtain a listing on the Singapore Mainboard or SESDAQ every year. The listing requirements and procedures for Singapore are different from those of Hong Kong. A company needs to have plans and carry out thorough preparation before going public in Singapore in order to maximise the value of the business.

This article, spread over three issues of Insight, will highlight the listing requirements of the Singapore Mainboard and SESDAQ, describe the listing procedures, and compare listing procedures in Singapore and Hong Kong. Each issue will address a different aspect, starting with this article on the listing requirements of the Singapore Mainboard and SESDAQ.

Overview
Singapore Exchange Limited (SGX) was formed in 1999 in order to effectuate the demutualisation and merger of two exchanges, namely the Stock Exchange of Singapore and the Singapore International Monetary Exchange. Prior to the merger, each exchange was owned by the member firms that engaged in trading, clearing and settlement functions. Pursuant to legislation adopted to effect the merger, SGX was created to own the exchanges and their related clearing houses, and the former owners and seat-holders were given shares in SGX in exchange for their shares and seats in the two exchanges. SGX is one of Asia-Pacific's first demutualised and integrated securities and derivatives exchanges. On 23 November 2000, SGX became the first exchange in the Asia Pacific region to be listed via a public offer and a private placement.

Over the years, Singapore has developed into one of the premier financial centres in the Asia Pacific region, with over 800 financial institutions offering a wide range of products and services. With a stable political setting and economic fundamentals, coupled with a conducive business and regulatory environment, Singapore is widely regarded as one of the premier equity markets in the Asia Pacific region. Its adoption of international standards of disclosure and corporate governance policies has produced a well-regulated trading environment for both local and international investors. For companies seeking to raise funds to advance business development and raise their corporate profile in the region, a listing on the SGX is one of the obvious choices.

SGX has two major equity trading boards: the SGX Mainboard and the SGX Dealing and Automated Quotation System (SESDAQ). As of 30 September 2004, the SGX Mainboard and SESDAQ have 449 and 149 listed companies, respectively. As set out in the table 1 above, the number and the market capitalisation of listed companies in Singapore has increased significantly over the past few years.

In order to list on the SGX Mainboard, listing applicants need to fulfill certain financial requirements as stipulated in the Listing Manual issued by the SGX. SESDAQ is a market more suited to smaller companies which are not able to raise sufficient funds from the capital market to meet the requirements for an SGX Mainboard listing.

Listing Requirements
SGX Mainboard
New listing applicants for the SGX Mainboard must fulfill the following conditions:

(a)	Shareholding spread For market capitalisation lower than S$300 million (approx. HK$1.3 billion), 25% of post-invitation share capital should be in the hands of at least 1,000 public shareholders.For market capitalisation of S$300 million (approx. HK$1.3 billion) and above, shareholding spread can be lower and can vary between 12% and 20%.
(b)	Quantitative criteria The SGX Mainboard listing applicants must meet one of the three quantitative criteria as set out in table 2.
(c)	Financial position and liquidity The listing applicant must be in a healthy financial position, assessed by establishing whether the listing group has a positive cash flow from operating activities. In addition, prior to listing, all debts owing to the listing group by its directors, substantial shareholders, and companies controlled by the directors and substantial shareholders must be settled.
(d)	Directors and management The directors and executive officers should have appropriate experience and expertise to manage the listing group's business. The character and integrity of the directors, management and controlling shareholders of the listing applicant will be taken into consideration.

SESDAQ
SESDAQ is a market which provides an alternative avenue for fund raising. SESDAQ listing applicants need not meet any minimum operating track record, profit or share capital requirements, but are expected to meet the following conditions:

Additional listing requirements for foreign listing applicants
Foreign listing applicants may list on either the SGX Mainboard or SESDAQ. The listing may be a primary listing or a secondary listing. However, foreign listing applicants should be aware of the following additional requirements for listing on SGX:

Understanding the listing requirements of the Singapore Mainboard and SESDAQ is fundamental to making the right choice when considering going public in Singapore. However, it is only the first step. Once the listing decision has been made, the applicant then has to plan for the listing. We will discuss the details of the preparation work and the main steps of the listing process in the next issue.