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Singapore Legal Update - September 2016

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Lock Yin Mei
Yin Mei Lock

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Wee Teck Lim

Professional Legal Support

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05 October 2016

SGX Regulator’s Column on Death Spiral Convertibles

On 25 August 2016, the SGX issued a Regulator’s Column setting out its views of and requirements for convertible bonds with floating conversion prices where the conversion price is at a discount to the prevailing market price at the time of conversion. It made clear that it reserved the right to reject a company’s application to issue such convertible bonds if the company failed to comply with the disclosure requirements set out.

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The Listings Advisory Committee Recommends that Dual Class Shares Companies Be Allowed to List

The Listings Advisory Committee of the SGX has recommended that issuers with dual class shares be allowed to list, provided certain corporate governance safeguards are adopted by the issuer. The proposed safeguards include a maximum voting differential of 10:1 and requiring the automatic conversion of multi-vote shares to single vote shares in certain circumstances. The SGX now needs to consider appropriate amendments to the Listing Rules to implement the new framework.

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SGCA Rules on Moneys Held in Customers' Segregated Accounts

In Vintage Bullion DMCC v Chay Fook Yuen [2016] SGCA 49, the Court of Appeal held that sums deposited by a broker in customer segregated accounts to cover the profits earned by customers from leveraged foreign exchange and commodity transactions that were accrued but not yet due and payable to them were covered by a statutory trust. These sums were therefore not part of the broker’s assets available for distribution in its liquidation to its unsecured creditors.

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Remaining Provisions of the Securities and Futures (Amendment) Act 2012 Come Into Force

The SFA was amended with effect from 19 August 2016 to prohibit the use of the terms “capital/principal protected” in all disclosure documents and advertising materials for offers of any capital markets product. It also mandates the appointment of trustees for unlisted debentures and allows issuers to conduct training sessions for intermediaries on a prospectus that has been lodged but not yet registered. Other provisions will require the issue of subsidiary legislation for full implementation.

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A Guide to the SIAC Rules 2016

On 1 August 2016, the 6th Edition of the Arbitration Rules of the SIAC (2016 Rules) took effect. Among other things, the 2016 Rules introduce joinder and consolidation provisions. They also include a novel early dismissal procedure and refine the Expedited Procedure and the Emergency Arbitrator provisions.

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