Updated ABS Listings Due Diligence Guidelines

In collaboration with the Singapore Exchange Regulation (“SGX Regco”), the Association of Banks in Singapore (“ABS”) has recently updated its ABS Listings Due Diligence Guidelines (“Due Diligence Guidelines”), effective from 13 November 2020. The latest guidelines aim to improve the standards of due diligence conducted on companies planning to list on the Singapore Exchange (“SGX”), by setting out expectations and recommendations on due diligence work that issue managers and sponsors should carry out for initial public offerings and listings, by way of introduction and/or reverse takeovers.

The Due Diligence Guidelines identify general principles covering the following four areas:

1. A structured and documented process;
2. Checks (which may include independent checks where reasonable and appropriate) and verifications;
3. Overall control of the due diligence process; and
4. The appointment of and reliance on advisers and experts.

 Key enhancements to the guidelines include:

• Increased focus on the assessment of the adequacy and effectiveness of the issuer’s internal controls (including financial, operational, compliance and information technology controls) to meet its business needs and challenges as a listed company;
• Assessment of the sustainability and viability of the issuer’s business, taking into account the challenges posed by the prevailing economic climate, among other considerations; and
• Targeted guidelines for due diligence on issuers operating in specialised, restricted or niche industries, and/or those operating in jurisdictions that traditionally have been vulnerable to corruption, associated with international sanctions and/or where geopolitical risks are present.

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Speak to our professionals to learn more about these updated guidelines, as well as about internal controls and listing in Singapore.