SGX RegCo gives additional two months to issuers irrespective of place of business or operations to hold AGMs due to concerns about large-group meetings amid Covid-19
19 March 2020
On 27 February 2020, Singapore Exchange Regulation (“SGX RegCo”) announced that it would allow issuers with a 31 December 2019 financial year-end up to 30 June 2020 to hold annual general meetings (“AGMs”) to approve their 31 December 2019 (“FY December 2019”) financial results if certain criteria are fulfilled (“Waiver”).
Given the current Covid-19 situation, shareholders have raised concerns about attending large-group meetings such as AGMs. Following this feedback, SGX RegCo announced the Waiver to allow issuers, irrespective of their place of business or operations, to have more time to implement measures to address these concerns.
This Waiver is in addition to the SGX RegCo announcement made on 7 February 2020, which gave issuers up to 30 June 2020 to hold their AGMs if their principal place of business or significant operations are in the People’s Republic of China, among other criteria.
Flexibility in conducting AGMs
The Waiver provides flexibility for issuers to consider how best to conduct their AGMs. Issuers may consider the following alternative arrangements to provide shareholders with a forum to ask questions and engage with management and the Board:
- organising virtual information sessions before their AGMs; or
- providing simultaneous webcasts of AGM proceedings.
Issuers may also arrange for alternative AGM venues to reduce congregation of large number of shareholders at any one particular venue.
Shareholders may vote via proxies without attending AGMs physically, bearing in mind the requisite timelines for the submission of proxy forms.
On 19 March 2020, SGX RegCo, in consultation with the Accounting and Corporate Regulatory Authority (“ACRA”) and the Monetary Authority of Singapore, published detailed guidance on the holding of general meetings amid the Covid-19 situation, which can be found on the SGX website by clicking here.
Criteria for Waiver to apply
The Waiver will be granted to issuers if they fulfil the following criteria (“Criteria”):
- their financial year-end is 31 December 2019; and
- approval of a similar application for extension of time (“EOT”) by ACRA or other relevant regulatory authorities (where applicable).
SGX RegCo has consulted ACRA on allowing issuers more time to hold their AGMs and file annual returns. On 28 February 2020, ACRA announced that it will process and allow these applications for EOT through BizFile+ for issuers with a financial year-end of 31 December 2019. ACRA will waive the fees for these applications for EOT.
An application to ACRA for an EOT of up to 60 days to delay the holding of the AGM or filing the annual return can be made by a company officer (e.g. company secretary or director), or by a professional firm on behalf of a company, on ACRA’s BizFile+ portal.
Applications for EOT must be made before the AGM or annual return deadline. ACRA may require up to 14 days to process an EOT application. Companies should submit their applications more than 14 days in advance of the relevant deadline as further clarifications may be required by ACRA.
Issuer seeking Waiver to notify SGX RegCo
Issuers seeking the Waiver must notify SGX RegCo via the RegCo Submissions Portal:
- that they wish to be granted the Waiver;
- how they have met the Criteria above; and
- the indicative timeline to convene their AGM.
Announcement of Waiver obtained via SGXNet
Upon confirmation from SGX RegCo, issuers are to announce via SGXNet:
- the Waiver;
- the indicative timeline to convene their AGM;
- confirmation of compliance with the following waiver conditions (“Waiver Conditions”):
- Board’s confirmation that the issuer has fulfilled the Criteria;
- Board’s confirmation that the Waiver will not be in contravention of any laws and regulations governing the issuer and its constitution (or the equivalent in the issuer’s country of incorporation); and
- issuance of the annual report to shareholders and SGX by 15 April 2020.
Notwithstanding the Waiver, issuers remain subject to continuous disclosure obligations under the Mainboard Rules and Catalist Rules (together, “Listing Rules”). This means that all material information, whether price-sensitive or trade sensitive information, must be disclosed on a timely basis. Where the issuers’ operations are materially affected by the Covid-19 situation, timely disclosure on the financial impact or any other material aspects should be made immediately via SGXNet under Listing Rule 703.
SGX RegCo is closely monitoring the situation and may determine where appropriate, if any further measures are required.
Existing requirements remain
Other existing requirements continue to apply to issuers that wish to utilise the Waiver. Issuers must:
- have released their unaudited financial statements for FY December 2019 by 29 February 2020 pursuant to Listing Rule 705(1);
- issue their annual reports to shareholders and SGX by 15 April 2020, in line with current requirements, to ensure that shareholders continue to receive information on a timely basis; and
- subsequently provide the requisite AGM notice of at least 14 days.
Should there be any material adjustments subsequently made by auditors resulting in material variance from the previously announced unaudited full year results, issuers are still required to disclose this immediately, pursuant to Mainboard Rule 704(6) and Catalist Rule 704(5).
The following materials are available on the SGX website www.sgx.com and ACRA website www.acra.gov.sg:
- SGX news release (27 February 2020)
- ACRA press release (28 February 2020)
Allen & Gledhill has a Covid-19 Resource Centre on our website that contains published knowhow on legal and regulatory aspects of the Covid-19 crisis.
In addition, we have assembled a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at email@example.com, your usual contact at Allen & Gledhill or any of the Partners listed here.