The change comes after the Hong Kong market watchdog, the Securities and Futures Commission (SFC), threatened to move in on investment banks if they allowed any false information about the companies to float on the exchange.
Recent difficulties with companies like KXD Digital Entertainment, which had breached a string of rules including failure to disclose it had ceased business operations, have led the market to tighten up regulations to ensure it remains attractive for large firms to go public in.
The new rules take effect on August 10, and companies who wish to trade on the SGX must now have a listing of at least S$150, ($119.2m) and prove they were profitable in the last financial year, with a minimum consolidated pre-tax profit of at least $30m. They must also demonstrate an operating track record of at least three years.
These regulations replace a minimum market capitalisation of $80m at IPO, and a pre-tax profit of $7.5m for the last three years.
“Quality begets quality,” said Singapore Exchange chief executive Magus Böcker. “The enhanced admission standards will increase Singapore’s attractiveness for companies and investors, further strengthening its position as an international financial centre.”
“I think retail investors will reap significant benefits in terms of having wider access to new IPOs,” said president of Securities Investment Association of Singapore David Gerald.
“At the same time, they can be assured that companies listed on SGX are of good standing.”
