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SGX Proposes New Rules for MOG Firms Listing on Mainboard

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by Ernie B. Calucag

In response to global market demands, the Singapore Exchange (SGX) has come up with new admission rules and continuing listing obligations to allow mineral, oil and gas (MOG) exploration companies with resources to list on Mainboard.

SGX said the proposed rules will welcome more MOG exploration companies seeking to extend their presence in Asia to list on SGX. This means more choices from a range of investment options in the exchange’s commodities and resource sectors.

“Companies in MOG exploration typically have periodic need for large exploration expenditure at various stages of project development. The proposed rules will allow them access to funding from the equity market,” said SGX in a statement.

To list on Mainboard, MOG companies must fulfil the proposed stringent listing requirements with the following key conditions:

– have market capitalisation of not less than S$300 million based on the issue price and post-invitation issued share capital if they are non-producing;

–  have adequate working capital for at least 18 months after listing;

–  disclose its plans and milestones and relative capital expenditure in advancing to production stage. These plans must be substantiated by the opinion of an independent qualified expert; and

–  have reached at least “indicated resources” stage for minerals or “contingent resources” stage for oil and gas as certified by an independent qualified expert and in accordance with internationally recognised standards.

In addition to periodic financial reporting, SGX will also require MOG companies to provide quarterly reports on their projected use of funds, and provide updates on their exploration and extraction activities. This keeps investors informed on the progress of the projects, and maintains transparency and accountability in the marketplace.

“It is important that retail investors understand the business of exploration in the specific minerals, oil and gas and the attendant risks. SGX has already conducted several related investor education workshops and will continue to do so as part of its ongoing effort to educate investors in its marketplace,” the exchange said.

The SGX invites market participants and the public for their feedback and suggestions on the proposed rules.