Singapore: Revised Listings Due Diligence Guidelines Issued By The Association Of Banks In Singapore

Last Updated: 18 July 2016
Article by Kenneth Oh and Li Chuan Hsu


The Association of Banks in Singapore (ABS) introduced its revised due diligence guidelines (Enhanced Guidelines) in respect of listings on the Singapore Exchange Securities Trading Limited (SGX-ST) on 13 May 2016. These guidelines are recommended by the ABS as guidance on the due diligence procedures and processes required of its member banks in the context of initial public offerings in Singapore.

Based on input from the SGX-ST, auditors, lawyers, local and international banks, and corporate finance firms, the revisions were introduced with the aim of raising the standards for such due diligence activities and reflect the knowledge gained by industry practitioners from their experience in dealing with companies. The Enhanced Guidelines also seeks to align with the SGX-ST's experience with, and expectations of, listing application submissions. In particular, some of the major enhancements to the Enhanced Guidelines include matters which the SGX-ST deems important for companies to resolve at the early stage of the listing application process.

This article seeks to broadly present the key enhancements introduced.


(1) Scope of application

The Enhanced Guidelines spells out its enhanced scope of application, with appropriate modifications, in respect of (a) an offer of securities by a business trust or real estate investment trust seeking a listing on the mainboard of the SGX-ST, (b) an offer of securities by a corporation seeking a listing on the Catalist, (c) a listing by way of introduction and (d) a reverse takeover. In reflecting the enhanced scope, the Enhanced Guidelines, formerly named "ABS IPO Due Diligence Guidelines" has been renamed "ABS: Listings Due Diligence Guidelines".

(2) Recommended procedures

The recommended procedures to be undertaken are specified to include three broad aspects, namely: (a) management, directors and controlling shareholders of the issuer, (b) the business of the issuer, and (c) expert sections of the prospectus. At the same time, clarification was made that the Enhanced Guidelines does not prescribe any form or structure of due diligence processes, in its emphasis that the issue manager should exercise its judgement appropriate to the context and circumstances in determining the investigations or steps appropriate or applicable in the case of a particular issuer.

(3) Management, directors and controlling shareholders

CFOs and resignations / cessation of management and controlling shareholders

In respect of the chief financial officer, issue managers will have to consider whether such a person is related to the chairman, the chief executive officer, the executive officers and/or the controlling shareholders. Issue managers have to also consider whether there are any indications that the management, directors and controlling shareholders who have recently resigned or ceased to be such persons (as the case may be) have done so for reasons that raise questions about the issuer, or the conduct or attitudes of the remaining management, directors and controlling shareholders.

Allegations/complaints against issuer, directors, executive officers and/or controlling shareholders

Issue managers should investigate all allegations or complaints, where there are any, against the issuer, directors, executive officers and/or controlling shareholders.

Golden parachutes

Where key management service contracts include golden parachute payments, issue managers should, in determining whether such golden parachute payments are in line with market practice and do not constitute a poison pill, obtain an opinion by an independent financial adviser where necessary.

(4) Business of the issuer

Based on reasonable due diligence, the issue manager should achieve a thorough understanding of the issuer and its business, including recent major developments relating to it, and gain an understanding of the industry the issuer operates in.

Certain specific clarified areas include the following:

Material assets

Issue managers are also to include site visits to material assets, which may include inventory and biological assets such as livestock and crops. Local counsel should be engaged to verify title to assets, and that all key approvals have been obtained to operate the assets.

Whether a production facility, property or asset is material

In determining whether a production facility, property or asset is material, the issue manager may consider the following factors:

  1. whether it represents a material component in the issuer's balance sheet;
  2. whether it contributes to a material portion of the issuer's revenue;
  3. whether it has any encumbrances that may materially and adversely impact the issuer's operations;
  4. whether it has any potential defects that may materially and adversely impact the issuer's operations, or that may have a material and adverse environmental impact; and
  5. whether it has a material re-development potential.

Customers and suppliers

Where there is a material dependency on any particular supplier or customer or groups of suppliers or customers, issue managers should also assess whether the directors, executive officers, controlling shareholders and their associates have any interest and/or are involved in the management of these parties.

In the case of the issuer's distribution and marketing network and plans, issue managers should consider interviews with key distributors.

Issue managers are also to ascertain whether there are any material agreements with clauses, such as entrenchment of controlling shareholder(s)/unitholder(s) or sponsor in the case of a trust, which may result in a material adverse impact on the issuer's business and if so, to make an assessment of such clauses.

Non-compliance with laws and regulations

Issue managers should review any non-compliance with laws and regulations by the issuer (whether repeated or not) which may result in an adverse impact to the issuer's financials and/or operations, as well as the issuer's procedures to prevent a repeat. In addition, the involvement of independent advisers, investigators or experts, including legal counsels, in such review could be considered, where reasonable and appropriate to do so.

The issue manager should also review adverse findings by regulatory authorities arising from audits or inspections of the issuer by such authorities.

Pending key regulatory approvals and licences

Where key regulatory approvals and licences are pending, the involvement of independent advisers, investigators or experts, including legal counsels, in due diligence, could be considered where reasonable and appropriate to do so.

Financial health of the issuer

Issue managers should assess the issuer's business vis-ŕ-vis its competitors and its industry, as well as the vulnerabilities and sustainability of the issuer's business. Where practicable, an issue manager should consider the involvement of its sector specialists in the financial health review of the issuer.

Issue managers should also consider whether disclosures made in respect of the issuer's cash deposits and other related disclosures in the accounts or financial statements reported by reporting accountants, are consistent with their observations from their discussions with the directors and management of the issuer. In reviewing cash deposits, issue managers should enquire whether there are any restrictions on remittances of cash from the issuer's overseas subsidiaries to the relevant holding company, and whether there are any charges or encumbrances on such cash deposits, and if so, whether these are consistent with any restrictions and charges disclosed in the audited financial statements.

Additionally, issue managers should consider whether the financial ratios of the issuer are in line with the industry norms and if not, whether there are relevant factors to explain such deviations.

Profitability and sustainability

Issue managers should consider the profitability of the issuer and the competitive advantages that will support the sustainability of the business, as well as review the prospects of the business to assess the viability of the business. The issue manager should seek to understand the revenue and cost drivers of the issuer's business.


The issue manager should conduct routine enquiries of the issuer's management, external auditors and tax adviser (if any), aiming to identify any material issues which may warrant further enquiries and to ascertain the following:

  1. whether all material tax liabilities have been identified and addressed by the issuer;
  2. whether taxes due have been paid;
  3. whether current and deferred tax payments have been provided for;
  4. whether the issuer's tax position has been adequately disclosed in the prospectus; and
  5. whether the amounts of taxable income and revenue/costs declared to relevant tax authorities in the tax filings are consistent with the issuer's audited financial statements and whether the amounts of taxation paid by the issuer as disclosed in the prospectus may indicate any irregularities,

to the extent a reasonable non-expert could carry out such enquiries.

Corporate structure and ownership

Issue managers should review non-traditional/complex structures of the issuer. This is to ensure that the proposed structure is in compliance with the relevant laws and regulations in which the issuer operates. The issue manager should assess whether the group structure is unnecessarily complex such that it could raise suspicion on the legitimacy of the issuer's activities (for example, if there is any difficulty in determining the organisation or individual that owns and/or controls the issuer or to obtain access to them). The issue manager should also consider if there are significant subsidiaries or operations in non-home country jurisdictions that do not appear to have any clear commercial purpose.

Anti-Money Laundering (AML) and Countering Financial Terrorism (CFT)

Issue managers should conduct acceptable AML and CFT due diligence and procedures on the activities and operations of the issuer and its affiliated companies and its directors, officers and employees. This includes screening against relevant money laundering and terrorism financing information sources, as well as lists and information provided by relevant authorities in Singapore, for the purposes of determining if there are any money laundering or terrorism financing risks in relation to the issuer. The issue manager shall be able and willing to furnish, without delay, at the request of the SGX-ST, any data, documents or information arising from its conduct of such AML and CFT due diligence.

Territories involved

Issue managers should seek to understand if there are any operations in overseas territories and the economic and business environment of such territories. If the overseas territory involved is regarded as a high risk area (for example, where there is political instability, a weak legal framework and/or the existence of a culture of bribery), the issue manager should assess if it will impact the general reputation of the issuer group.

(5) Expert sections in the prospectus

Suitability of Experts

In elaborating on the suitability of a relevant adviser or expert, issue managers should take into consideration the track record and specific experience (including prior experience in listings) of the relevant adviser or expert. In the case of property valuers, issue managers should take into consideration whether the valuers are internationally reputable valuers who have the necessary experience and track record to provide impartial and robust valuations. In the case of foreign legal advisers, issue managers should note that where a foreign legal adviser is not ranked by Chambers & Partners, the issue manager may be required by the SGX-ST to demonstrate that it has conducted the necessary assessment to ascertain the suitability of appointment of such foreign legal adviser.

Conclusions or opinions of experts

Issue managers, when relying on conclusions or opinions of experts in the expert sections of the prospectus, should be satisfied that such reliance is reasonable in the circumstances and should have no reasonable grounds to believe that the information in the adviser's and/or expert's opinion/report is untrue, misleading or contains any material omission.

In this regard, the issue manager should review the expert's report or opinion and actively raise queries on any problem areas with the expert where there are indications of inadequacy or unreliability with the expert's opinion/report. In conducting such a review, the issue manager has to, among others, additionally look out for material discrepancy or inconsistency against the information and disclosures obtained or findings made by the issue manager in the course of its due diligence, as well as assess (to the extent a reasonable non-expert could make such an assessment) whether the assumptions, on which the expert's report or opinion are based, are fair and reasonable.

Where the expert's opinion or report is qualified, the issue manager should assess (if necessary, in consultation with legal advisers) whether such qualification is required to be clearly disclosed in the prospectus and, if so, ensure its proper disclosure.


The amendments made resulting in the Enhanced Guidelines reflect a greater degree of detail, comprehensiveness and thoroughness in the due diligence procedures to be undertaken by issue managers and sponsors, in recognition of their key role and responsibilities in the listing process, and specifies some of the measures that have been informally practised, one way or other, by existing issue managers and sponsors.

The Enhanced Guidelines also reflects a clearer alignment with the requirements of the SGX-ST's listing rules, increasing the robustness of the listing process and with the aim of enhancing the quality of listings on the SGX-ST.

The Enhanced Guidelines can be obtained at the following links:

Dentons Rodyk acknowledges and thanks Matthew Yeo for his contribution in the writing of this article.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Dec 2017, Webinar, New York, United States

Join Dentons for a complimentary webinar focused on the ongoing challenge of integrating new technologies into existing information governance policies and risk management frameworks.

7 Dec 2017, Seminar, Cape Town, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

8 Dec 2017, Seminar, Johannesburg, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.