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SGX Expects Issuers to Respect International Sanctions

Singapore Exchange (SGX) has published its expectations if the issuer, or any person or entity closely associated with the issuer, is exposed to sanctions-related risks, according to a public document written by SGX RegCo’s Tan Boon Gin and Michael Tang, the Head of Listing Policy and Product Admission.

Issuers should access if they have businesses that violate any applicate international sanctions laws, and if they do, they “should immediately announce the inherent risk exposure on SGXNET in accordance with its continuing disclosure obligations under Rule 703.” Where legal advice has been obtained, this should also be announced.

On a yearly basis, if the issuer has exposure to sanction related risk, the board should provide in its annual report a confirmation that there has been no material change in its risk of being subject to any Sanctions Law and it is required under Rule 1207(10) on the adequacy and effectiveness of the issuer’s internal controls and risk management systems must additionally include consideration with respect to any sanctions-related risk. 

If an issuer is subject to sanctions or engages in a sanctioned activity, it should suspend trading in its listed securities, and immediately announce all relevant information. The issuer should remain suspended until it has demonstrated to SGX that it is no longer a Sanctioned Subject, or it has ceased the sanctioned activity. 

When trading in an issuer’s securities is suspended, the issuer should submit a proposal to SGX within 12 months from the date of suspension on the proposed remediation measures 

SGX may query or require the issuer to take steps to address the sanctions-related risks including suspension of the issuer’s securities. The regulator may exercise its powers under Rule 1303 at any time to suspend the trading of the issuer’s securities. 

Today, SGX suspended the admission to trading of PJSC Gazprom global depositary receipts (GDR) due to sanctions by the Singapore government amid Russia’s invasion of Ukraine, according to an official statement.

Singapore is also prohibiting transactions and financial services that facilitate fund raising to the Russian government and entities owned or controlled by them. The prohibition applies to the buying and selling of new securities and providing financial services that facilitate new fundraising.