SGX RegCo is proposing a rule change to require listed issuers to assist shareholders who have requisitioned a general meeting so that the meeting can take place as soon as practicable. Issuers are to commence facilitative efforts within 21 days of deposit of the requisition notice. An issuer who disputes the validity of the requisition notice must apply for a court ruling within the same timeline.
Some areas in which SGX RegCo envisages the issuer should provide help to requisitionists include releasing announcements and documents such as notices, circulars and proxy forms, on SGXNet; sending these documents to shareholders; collating any proxy forms submitted by shareholders at the issuer’s registered office; securing the board’s attendance at the shareholder-requisitioned meeting; enabling the appointed scrutineer to discharge its duties; and instructing its agents, including its share registrar and company secretary, to provide any necessary assistance such as preparing the mailing labels for the purposes of sending documents to shareholders and attending the shareholder-requisitioned meeting.
Currently, companies have two months to hold general meetings including extraordinary general meetings from the day the board receives the requisition notice. This includes the 21-day notice from the date the circular is distributed to shareholders to the date of the EGM.
The current regulation stipulates that the requisition notice must meet the procedural requirements of the Companies Act 1967 of Singapore, including that requisitionists must hold at least 10% of the total number of paid-up shares. To facilitate the board’s assessment on the validity of the requisition notice, the requisition notice should minimally encompass the names and shareholdings of the requisitionists and a description of the resolutions proposed to be tabled at the shareholder-requisitioned meeting. When the board receives a requisition notice, it should immediately inform shareholders via SGXNet. Any subsequent material developments, including any application filed to court, should also be immediately announced.
Proposals to facilitate shareholders to requisition general meetings are part of SGX RegCo’s efforts to institute a "value focus" approach.
“I wish to emphasise that it takes the entire market community to improve the situation. We can have simultaneous efforts to enhance shareholder value, investor interest, liquidity, and valuations, acting in mutually reinforcing ways to benefit our market and participants,” says Tan Boon Gin in a recent media briefing.
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Other initiatives for the value focus approach includes recently introduced governance rules. RegCo has introduced a 9-year limit on the tenure of independent directors, to promote board independence and encourage board renewal. “New directors will bring new ideas and be less wedded to legacy businesses,” Tan says. “We have also sought to increase the transparency of the link between pay and long-term value creation by enhancing remuneration disclosures of the board and CEO,” he adds.
The Securities Investors Association (Singapore) (SIAS) has recently indicated that they are studying the possibility of posing additional questions to boards of undervalued companies on their plans to improve their valuations. “We support this initiative and encourage companies to respond meaningfully and comprehensively to such questions,” Tan says.
Interestingly, SGX RegCo is looking to “reduce market friction” by reducing the number of trading queries to management of mainly small-caps that have experienced unusual trading activity. “We have launched a review of the queries posed to listed companies, to explore how we can issue such queries in a way that creates less noise for the market while ensuring material information continues to be available to investors. This is in addition to the steps we have already taken to fine-tune our queries regarding unusual trading activity to make them more targeted. This has led to a fall in the number of such queries issued in the last half-year,” Tan explains.
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The proposal to enable shareholders to convene meetings with greater ease is just one of the initiatives SGX RegCo is studying with other proposals likely to be put forward for discussion in the months ahead.
