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Singapore Exchange consultations: Listings rule changes and sustainability reporting

The Singapore Exchange (SGX) is undertaking a consultation on amendments to its Listing Rules to align them with the amended Companies Act passed in October 2014.

The Listing Rule changes will be able to send companies to send company notices and documents to shareholders electronically and the consultation asks if there is any concern about allowing companies to do this through implied consent which will mean shareholders will not be able to receive physical documents or whether shareholders should expressly agree to receiving the documents electronically.

The SGX is also seeking views on changes affecting the insurance coverage and indemnities for directors; a restraint on the exercise of voting rights where a shareholder is required to abstain from voting pursuant to any court order if they have contravened the Securities and Futures Act or the Listing Rules and the treatment of shares held by a subsidiary in its holding company.

The deadline for responses to this consultation is 11th February 2016. They should be sent to: listingrules@sgx.com

Earlier this month the SGX also began consulting on improved sustainability reporting rules. Reporting on sustainability issues have been voluntary since 2011 but these changes will introduce a “comply or explain” regime which will apply to companies from the financial year ending on, or after 31 December 2017, with reports published from 2018.

The SGX is proposing that issuers will have to include five primary components in a sustainability report which are:

  • Identification of material environmental, social and governance (ESG) factors, giving reasons for their choice and a description of the process of selection.
  • Policies, practices and performance of the company in relation to each of the material ESG factors, in both descriptive and quantitative terms.  Performance should be discussed in the context of any previously disclosed targets.
  • Targets for the forthcoming year.
  • A chosen reporting framework to guide the disclosure of relevant information on the ESG factors. Using an internationally recognised or industry-relevant framework enhances acceptance and comparability.
  • A statement of the board confirming compliance with the primary components or description of any alternative practices with reasons for preferring them

The SGX  is also seeking views on the roles and responsibilities of board members in respect of sustainability reporting; on its proposals that companies report only material ESG factors; requirements that reports should be published within 5 months from the end of each financial year and whether anti-corruption and diversity aspects, which are receiving global attention, should be included as a primary component in a sustainability report.

The deadline for responses to this consultation is 5th February and should be sent to sustainability.reporting@sgx.com.

What do you think?