26 March 2020
The Accounting and Corporate Regulatory Authority (“ACRA”), Monetary Authority of Singapore (“MAS”) and Singapore Exchange Regulation (“SGX RegCo”) have issued a joint statement on 25 March 2020 (“Joint Statement”) announcing that they expect all issuers to comply with the Ministry of Health’s (“MOH”) mandatory safe distancing measures. This comes on the heels of the MOH’s 24 March 2020 advisory on tighter measures to minimise further spread of Covid-19 (“MOH Advisory”), which states that all events must be deferred or cancelled, regardless of size. The measures in the MOH Advisory will take effect from 26 March 2020 at 2359 hours.
Issuers must implement all relevant measures in the conduct of meetings, including general meetings and scheme meetings.
ACRA and MAS are working with other relevant government agencies to propose legislative amendments in relation to the conduct of meetings, with a view to introducing the amendments for the Parliament sitting in April 2020. This is to provide legal certainty to issuers implementing safe distancing measures imposed by MOH.
The legislation will allow issuers the flexibility to limit the number of participants in a physical meeting and for other participants to participate by virtual means, or hold meetings solely by virtual means (i.e. without a physical meeting), notwithstanding any contrary provisions in their constitutive documents. Issuers are to also put in place arrangements for participants to cast their votes remotely in writing or through electronic means.
SGX RegCo had earlier on 27 February 2020 announced measures to give time extensions for issuers with 31 December year-end to hold their annual general meetings (“AGMs”) by 30 June 2020. Issuers which may need more time to put in place alternative arrangements for organising virtual meetings will be able to obtain an extension to do so.
Investors, on their part, are strongly encouraged to use alternative ways available to participate in meetings, including virtual means. To exercise their voting rights, investors should consider appointing the chairperson of the general meeting to act as proxy and direct the vote at the general meeting.
SGX RegCo is working with Securities Investors Association (Singapore) to provide further guidance to investors on how they can participate and cast their votes.
ACRA, MAS and SGX RegCo will continue to monitor the impact of Covid-19 on the capital markets, and will put in place additional measures and advisories as necessary.
In light of the above guidance, for an issuer which has already issued its AGM notice for its AGM to be held in April 2020, its AGM may have to be deferred, pending the passing of legislation to legitimise the holding of the AGM and prescribe the manner in which the AGM can be carried out. In the case of an issuer whose AGM is scheduled to be held in April but has not yet issued its AGM notice, it is recommended that the AGM be postponed, pending the passing of the legislative amendments. If the AGM is postponed, this means that:
- the issuer will need to apply for waiver/time extension from ACRA (in the case of companies) or MAS (in the case of real estate investment trusts and business trusts), as well as from SGX RegCo to hold the AGM by 30 June 2020;
- the issuer’s annual report (without an AGM notice) must still be uploaded by 15 April 2020 in the meantime;
- the issuer should prepare an announcement to state that following the MOH Advisory and the Joint Statement, the issuer will be postponing the AGM to provide time for it to put in place alternative arrangements to take into account legislative changes, and will keep its shareholders updated; and
- the issuer should explore methods of online voting, webcasts and other ways of conducting the AGM digitally with vendors and advisers. Issuers are well-advised to wait for details on the above-mentioned legislation before taking concrete steps in relation to the timing and manner of conduct of their AGMs.
- In view of the paramount importance of public health and safety, the Joint Statement is a welcome move which will reduce the risk of transmission of Covid-19 and help keep our community safe.