SGX introduces new Mainboard rules for mineral, oil and gas companies

Singapore Exchange (SGX) today announced new Mainboard admission rules and continuing listing obligations for mineral, oil and gas (“MOG”) companies. 

These new rules set the admission standards applicable to the listing of MOG companies that are not yet in production and introduce continuing listing requirements that cater to the specific characteristics of MOG companies.

The global economy is dependent on scarce and finite minerals, oil and gas resources which require funding for its exploration, development and production.  With the new rules, a wider spectrum of MOG companies can tap into Asia’s vast pool of liquidity via SGX. Investors will also have more choices of investing in this sector.

The new rules seek to better safeguard investors’ interests given the technical and specialised nature of the MOG industry. The salient features of the new rules are as follows:-

Admission standards for MOG listing aspirants that are not in production

A MOG listing aspirant that is not in production seeking a listing has to satisfy the following conditions:

• Has market capitalisation of not less than S$300 million based on the issue price and post-invitation issued share

capital; and

• Discloses its plans, milestones and capital expenditure to advance to production stage.

Requirements for all MOG companies

All MOG listing applicants, whether in production or otherwise, will also need to:               

• Have at least achieved Indicated Resources (for Minerals) or Contingent Resources (for Oil & Gas)

• Have sufficient working capital for 18 months from listing

• Have at least one independent director with appropriate industry experience and expertise

• Appoint an audit firm with the relevant industry experience

Other disclosures required of MOG companies

To enhance disclosure for MOG companies, the following requirements are applicable:-

• Include a valuation report on its reserves in the offer document

• Provide an independent qualified person report for reporting of significant resource or reserve.

The new rules will be effective from 27 September 2013. We have also provided transitional arrangements to facilitate existing MOG companies on the Mainboard complying with the new continuing listing requirements.

The new rules take into account feedback and suggestions SGX received from the public consultation concluded in July 2012. The relevant Catalist MOG rules will also be amended.

Details on the rule amendments can be accessed on www.sgx.com at this link and the transitional arrangements for existing Mainboard MOG companies can be found at this link.