FTT Market Conduct Rules 2

Question 1

What is a 'placement' of shares by a listed company?

Accepted Answer

The issue of new shares directly to a select group of investors without a public offer, subject to SGX rules on maximum discount and number of shares

Answer

A placement is the issue of new shares directly and privately to selected investors without a prospectus. SGX rules limit placements to 50% of existing share capital within 12 months and cap the discount at 10% of the weighted average price.

Question 2

What is 'market rigging' under the SFA?

Accepted Answer

Any conduct that creates or is likely to create a false or misleading appearance of trading in, or price of, securities, or artificially maintains or affects the price

Answer

Market rigging under the SFA encompasses any conduct that creates a false or misleading appearance of trading activity or price, or artificially maintains, inflates, or depresses the price of securities. It is broader than simple manipulation and includes various deceptive practices.

Question 3

What disclosure is required when a person acquires 30% or more of the voting shares of an SGX-listed company?

Accepted Answer

A mandatory general offer (MGO) must be made to all remaining shareholders under the Singapore Code on Take-overs and Mergers

Answer

Under the Singapore Code on Take-overs and Mergers, when a person (or concert party) acquires 30% or more of voting shares, they must make an MGO to buy ALL remaining shares at no less than the highest price paid in the preceding 6 months.

Question 4

What is a 'whitewash waiver' in the context of Singapore take-overs?

Accepted Answer

A waiver granted by the Securities Industry Council allowing a person to acquire shares that would otherwise trigger a mandatory offer, subject to independent shareholder approval

Answer

A whitewash waiver is granted by Singapore's Securities Industry Council to allow a person to acquire new shares — for example in a rights issue — that would take their holding above 30% without triggering a mandatory general offer obligation, provided independent shareholders approve the waiver at a general meeting.

Question 5

What is the 'fair and equitable treatment' principle in corporate actions by SGX-listed companies?

Accepted Answer

All shareholders of the same class must be treated equally in corporate actions such as rights issues, dividends, and take-over offers

Answer

The principle of fair and equitable treatment requires listed companies to treat all shareholders of the same class equally in corporate actions. All ordinary shareholders must receive the same offer price, same ratio of rights, and same terms in any corporate action.

Singapore FTT Practice Test

Singapore FTT Practice Test

FTT Market Conduct Rules 2