A comprehensive set of measures to strengthen Singapore’s equities market

Singapore, 21 February 2025… The Equities Market Review Group has announced its first set of measures to strengthen the competitiveness of Singapore’s equities market. This includes the three tax incentives announced by the Prime Minister and Minister of Finance at Budget 2025 on 18 February 2025.

2. The Review Group has done extensive consultations with industry stakeholders and will propose measures to strengthen the functioning of the Singapore equities market, and its attractiveness to investors and companies seeking to list and access growth capital. Market participants and the Singapore Exchange (SGX) have given feedback that there are companies which have a strong local or regional presence, but which are not large enough to attract sustained investor interest in a global exchange. Our equities market could look at such companies as one of its target groups. The Review Group has also considered ideas to enhance retail and institutional investor interest in our market. The first set of measures include:

Increasing Investor Interest (Demand)

These measures seek to deepen trading liquidity and strengthen capabilities in the local fund management and equity research ecosystem.

a) The Monetary Authority of Singapore (MAS) and the Financial Sector Development Fund (FSDF) will launch a S$5 billion Equity Market Development Programme (EQDP). Under this programme, MAS will invest with selected fund managers with capabilities to implement investment mandates with a strong focus on Singapore stocks. These strategies should be actively managed, invest in a range of companies and not just index component stocks, and over time draw in investments from other investors. MAS will start the process of evaluating eligible fund managers and strategies over the next few months.

b) Tax exemption on fund manager’s qualifying income derived from funds investing substantially in Singapore-listed equities. This complements the EQDP and serves to support fund managers in launching and actively distributing funds that invest substantially in Singapore’s equities market^[1].

c) An adjustment to the Global Investor Programme (GIP) to support more capital inflows into Singapore-listed equities. Currently, GIP applicants investing under the Family Office option have to establish a Single Family Office (SFO) with assets under management of at least S$200 million, of which at least S$50 million must be deployed into qualifying investment categories consisting of listed equities/REITS/business trusts, qualifying debt securities, Singapore-distributed funds and non-listed Singapore-based operating companies. Going forward, for new GIP Family Office applicants, the qualifying investment categories will be narrowed to equities listed on approved Singapore exchanges.

d) Expansion of the Research Development Grant Scheme under MAS’ Grant for Equity Market Singapore (GEMS) to build a ready investor base, sharpen focus on mid- and small-cap enterprises, and broaden research dissemination including via new media channels. MAS and the Singapore Exchange (SGX) will release further details around mid-2025.

Improving Attractiveness to Quality Listings (Supply)

These measures aim to attract companies with operations in Singapore and fund managers to tap Singapore’s equities market for their capital raising.

e) 20% corporate income tax rebate for new primary listings and 10% tax rebate for new secondary listings (with share issuance)^[2]. This complements the existing GEMS Listing Grant Scheme^[3] in defraying part of enterprises’ listing costs.

f) Enhanced 5% concessionary tax rate on qualifying income for new fund manager listings in Singapore. To qualify, eligible fund managers must distribute a portion of its profits as dividends.

g) The Government will continue to enhance support for the development of local enterprises that will provide a pipeline of potential companies for listing. This includes the new investment schemes announced at Budget 2025, which are administered by the Ministry of Trade and Industry, and Enterprise Singapore.

Pro-enterprise Regulatory Stance and Measures to Strengthen Investor Confidence

3. The Review Group has also recommended adopting a more pro-enterprise regulatory stance, alongside other measures to strengthen investor confidence. The regulatory measures will move Singapore decisively towards a more disclosure-based regime. While upholding sound international standards, Singapore’s listing process will be significantly more efficient and streamlined than now and will compare favourably with leading financial hubs in the world. Regulation will be more focused and facilitative of listings, and high standards of corporate governance and robust enforcement will be upheld to maintain investor confidence. In addition, key ecosystem players — such as issue managers who conduct due diligence, accounting professionals who conduct financial audits, as well as research analysts who scrutinise disclosures — must play their part so that investors can make their investment choices with adequate and reliable disclosures.

4. The first set of regulatory measures comprises the following^[4]:

a) Consolidate listing suitability and prospectus disclosures review functions in Singapore Exchange Regulation (SGX RegCo). This will provide prospective issuers with greater clarity on the listing process and timeline, as they only need to engage with one regulator going forward.

b) Reduce scope for merit-based judgment when admitting new listings, by streamlining SGX RegCo’s qualitative admission criteria. Instead of taking a prescriptive approach to how issuers mitigate any risks prior to listing, RegCo will focus on ensuring that the disclosure of material issues is sufficient for informed decision-making by investors.

c) Streamline prospectus requirements and listing processes. All major parts of the prospectus requirements — including on financial information, interested person transactions and conflicts of interest — will be streamlined while continuing to adhere to international standards. Core disclosure requirements will be retained, with emphasis on clear disclosure of the most relevant and material information to investors. With the streamlining, issuers can expect a typical listing review process to take six to eight weeks. MAS will also simplify requirements to allow issuers seeking secondary listings in Singapore to do so using the prospectus from their primary listings with minimal adaptations.

d) Adopt a more targeted approach to post-listing queries, alerts and trading suspensions. As public queries and alerts can have unintended and disruptive effects on the trading of issuers’ shares, a more targeted approach to such interventions will allow SGX RegCo to strike a better balance in facilitating market discipline and achieving investor protection. SGX RegCo will also consult on a proposal to remove the financial “Watch-List”.

MAS and SGX RegCo will issue detailed consultations on these proposals by mid-2025.

5. In its next phase of work, to be completed by end-2025, the Review Group will consider other proposals beyond the measures announced today. These include:

a) Introducing programmes to uplift listed companies’ shareholder engagement capabilities and sharpen their focus on shareholder value;
b) Attracting retail liquidity through market structure changes such as reducing board lot sizes;
c) Strengthening investor protection through enhancing investor recourse avenues;
d) Improving post-trade custody efficiency; and
e) Developing cross-border partnerships.

Together, we hope that these measures would address the multifaceted challenges that Singapore’s equities market faces today. Details on the Review Group’s first set of measures are set out in Annex A, and a summary of the Review Group’s full set of proposed measures is in Annex B.

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1. ^[1] Fund managers that are interested in the tax incentives set out in Para 2(b) and 2(f) can reach out to MAS for more information. Corporates that are interested in the corporate income tax rebate set out in Para 2(e) can reach out to Enterprise Singapore or the Singapore Economic Development Board for more information.
2. ^[2] The following rebate caps are applicable: o $6 million per Year of Assessment (YA) for qualifying entities with market capitalisation ≥$1 billion; or o $3 million per YA for qualifying entities with market capitalisation <$1 billion.
3. ^[3] The GEMS Listing Grant Scheme provides 70% co-funding of eligible listing expenses for SGX Mainboard listings, and 20% co-funding of eligible listing expenses for Catalist listings, subject to grant caps. See here for more details.
4. ^[4] These regulatory proposals involve changes to the statutory requirements and SGX’s listing rules, and will go through a public consultation process. SGX RegCo and MAS will review the feedback from the public consultation, before implementing the finalised set of measures.