Chief executive Boon Gin Tan says issuers should publish regular business updates to ensure high-quality information is promptly available to investors.
SGX RegCo (Singapore Exchange Regulation) is granting an automatic 2-month extension to release full-year unaudited results for issuers with financial year-ends of 29 February or 31 March; and a 1-month extension for issuers with a 30 April 2020 year-end.
Issuers are typically required to announce the full-year financial statements within a maximum 60 days after the relevant financial period.
The extensions are being granted to address practical difficulties that have emerged in the preparation of unaudited full-year financial statements by issuers due to the elevated safe distancing measures put in place from 7 April until 1 June as a circuit breaker to control the transmission of Covid-19.
During this period, all non-essential businesses must stop workplace operations, and remote access to accounting and financial records may not always be feasible.
“This has a bearing on issuers whose full-year ended just before the start of or during the revised circuit breaker period,” SGX RegCo says. “We have, in light of this, decided to grant this Waiver.”
SGX RegCo also reminds issuers of their duty to provide timely disclosures to shareholders via SGXNET on the results immediately after the figures are available as well as on the business impact or any other material aspects due to the latest advisories and measures amid Covid-19.
“The current business and economic uncertainty and market volatility make it absolutely necessary for shareholders to have up-to-date information concerning material changes in issuers’ business and operations,” says SGX RegCo chief Boon Gin Tan in a column.
In February this year, the Listing Rules were enhanced to make explicit that immediate disclosure is required for material changes to an issuer’s near-term earnings prospects caused by general trading trends or by specific events or developments. Guidance was also provided on what issuers should do when developments are ongoing or there is insufficient information to quantify the financial impact with certainty.
“Issuers should still make disclosures which would reflect its current state of affairs and outlook and in particular, assessment of the strategy or steps taken to address the effects of Covid-19 and how its operating and financial conditions may change,” Tan says. “This will help investors to understand the potential impact on the issuer’s prospects.”
Tan says that even plans made by boards to deal with Covid-19 may give rise to material information that must be disclosed. Other factors that may be considered material and require disclosure include impacts to issuers’ operations, earnings prospects, liquidity, balance sheets, contractual obligations and viability, among others.
“With the extension of time granted to publish issuers’ annual reports, issuers should take steps to minimise information gaps regarding their state of affairs,” Tan said. “In this regard, SGX RegCo urges issuers to publish regular business updates during this period to provide the market with prompt updates on their performance.”