27 February 2018
On 31 January 2018, Singapore Exchange Limited (“SGX”) released a consultation paper titled “Mineral, Oil and Gas Listing Rules Amendments” seeking feedback on proposed amendments to the Singapore Exchange Securities Trading Limited (“SGX-ST”) Listing Rules (Mainboard) and the SGX-ST Listing Rules (Catalist) (together, “Listing Rules”) for mineral, oil and gas (“MOG”) companies with the aim of aligning them with industry developments. The consultation closed on 28 February 2018.
Among other things, SGX proposes to amend the criteria that MOG companies seeking a listing on the Mainboard or Catalist must fulfil. These include:
- Mainboard MOG companies to establish “reserves”, Catalist mineral companies need only have “inferred resources”: The current Listing Rules for both Mainboard and Catalist stipulate that an MOG listing applicant must establish the existence of adequate “resources” in a defined area, which must be at least categorised as “indicated resources” in relation to minerals or “contingent resources” in relation to oil and gas. SGX seeks feedback on its proposal to require companies seeking a listing on the Mainboard to establish at least “reserves”, and to allow companies seeking a listing on Catalist to continue to establish “resources”. Further, SGX proposes to allow mineral companies with only “inferred resources” to be eligible for listing on Catalist.
- Mainboard MOG companies to have a meaningful portfolio of “reserves”: To provide additional assurance that an MOG company’s portfolio is not skewed towards a large portion of “resources” relative to “reserves”, SGX proposes to require that an MOG company seeking to list on the Mainboard must have a meaningful portfolio of “reserves” and its “reserves” should not be disproportionately smaller than its “resources”.
- Demonstrating plans to proceed to development: Currently, the Listing Rules require an MOG company to establish the existence of adequate “resources” in a defined area where the company has exploration and exploitation rights. SGX proposes to remove the requirement for MOG companies to have exploitation rights. In place of this, all MOG companies must demonstrate plans to obtain the necessary approvals required to proceed with development, with the qualified person providing the basis for expecting that all required approvals will be granted and the company’s intention to proceed with development within a reasonable time frame. The qualified person should also highlight and discuss any material unresolved matter that is dependent on a third party on which extraction is contingent.
SGX also proposes amendments to the provisions relating to the independent qualified person’s report (“QPR”) including the following:
- Contents of the QPR: As the current requirements on the contents of the QPR can be unduly onerous, costly and time consuming, SGX proposes to introduce a summary report, containing key information relating to updates of the company’s “resources” and “reserves” (“Summary QPR”). Issuers will be allowed to disclose a Summary QPR for events that are triggered through organic growth, relating to annual updates and material changes. For new material “resources” or “reserves” which have not been previously disclosed, or a substantial change in “resources” or “reserves”, the Summary QPR should still be signed off by an independent qualified person to provide greater assurance that any potential conflict of interest is addressed. For events relating to admission and major transactions, SGX maintains the view that it is necessary for a full QPR to be prepared by an independent qualified person to give independent assurance on significant transactions.
- Responsibility for the QPR: The Listing Rules currently provide that if the independent qualified person producing the report is not a partner or director of his firm, the production of the report must be directly supervised by a partner or director on behalf of the firm. SGX proposes to require that the firm should take responsibility for the QPR instead by requiring a partner, director or authorised representative to sign the report on behalf of the firm.
The following materials are available on the SGX website www.sgx.com: