SGX RegCo proposes changes to support company restructuring

Singapore Exchange Regulation (SGX RegCo) is proposing rule changes aimed at facilitating the restructuring process for SGX-listed companies under Singapore’s Insolvency, Restructuring and Dissolution Act 2018 (IRDA). The changes, if implemented, will enable issuers to restructure more efficiently and lessen the regulatory burden when they are trying to manage their financial affairs and meet time-sensitive milestones.

For instance, SGX RegCo is proposing that shareholders need not vote on a major disposal undertaken as part of judicial management or liquidation of the issuer under IRDA. This will align SGX Regco rules with IRDA, as well as allow for the quicker realisation of assets.

“IRDA aims to smoothen and speed up the restructuring of financially-distressed companies. This may increase the chances of white knight rescues and trading resumptions. These outcomes, if they materialise, will be of more value to shareholders than years of proceedings that will further deplete distressed companies’ scarce finances,” said Tan Boon Gin, CEO of SGX RegCo.

SGX RegCo also proposes to, among others:

- Provide guidance to issuers on circumstances where a financially-distressed issuer can apply to SGX RegCo to allow its listed securities to continue or resume trading.

- Require an immediate announcement when a financially-distressed issuer or any of its subsidiaries undergo a court-supervised moratorium.

- Exclude a financially-distressed company under moratorium pursuant to IRDA from announcing its quarterly financial statements.

The public consultation is open till 22 March 2024 and can be found at https://regco.sgx.com/public-consultations.

PwC Singapore offers recommendations to enhance local economy

PwC Singapore has shared recommendations for the upcoming Singapore Budget 2016 with the Ministry of Finance and Monetary Authority of Singapore.

Source: PwC Singapore.

Chris Woo, Tax Leader, PwC Singapore, said: “In order to sustain Singapore’s future growth and success, it is vital we maintain a leading, vibrant economy amidst greater competition with our regional counterparts. Singapore needs to sharpen its competitive edge by providing a level of certainty to foreign investors and Singapore based multinationals. This must be done while creating more value in Singapore by encouraging entrepreneurship and innovation.

“The government has been actively encouraging entrepreneurship in Singapore, but there is still room to do more. Incentives could be broadened and focused on rewarding growth. Share options and stock award schemes can promote greater owner-entrepreneurial spirit.”

PwC suggests a more liberal tax treatment of expenses for new ventures to spur innovation to encourage businesses to develop innovative capabilities in this rapidly evolving economy. "When introducing this, anti-abuse measures must continue to be taken into consideration,” Woo said.

Another recommendation is enhancement of the Productivity and Innovation Credit (PIC) scheme. "Many small and medium sized enterprises (SMEs) are just starting on their productivity journey. If the PIC grants or incentives are awarded based on productivity gains, this will encourage SMEs to strive to achieve greater productivity,” Woo explained.

A more liberal approach to the administration of research and development (R&D) tax claims is proposed. "One practical way is to streamline the claims, and one which gives taxpayer’s upfront certainty, is to have a pre-approval process with the relevant agencies. An alternative dispute resolution forum could involve evaluation by an independent panel of experts who will rule on the technical merits of the claim,” Woo elaborated.

“The IP hub master plan is a step in the right direction. When sourcing for financing, IP-backed loan programmes need to revisited to allow SMEs to use IP as collateral, leading to more accessible financing,” Woo added.

“Last but not least the safe harbour rule for gains from disposals of equity instruments is expiring in 2017. Making the safe harbour rule a permanent feature of the tax system will provide investors with certainty that their capital gains will not be taxed and help companies plan for the long-term.”