SINGAPORE Law and Practice Contributed by: Benjamin Gaw and Joel Tan, Drew & Napier LLC
• insider trading prohibitions, in particular where the bidder comes into possession of confidential and price-sensitive information relating to the listed company – eg, after commencing due diligence on the company. A bidder may concurrently seek to obtain contractual undertakings from existing shareholders to accept its proposed offers or to vote in favour of their scheme. Such irrevocable undertakings may potentially be aggregated as part of the bidder’s ownership stake in the target company, which may potentially trigger the mandatory offer rules under the Takeover Code (among other requirements). 4.2 Material Shareholding Disclosure Threshold Under the Securities and Futures Act 2001, a party who acquires an interest in 5% or more of the vot - ing shares (a “substantial shareholder”) in a company incorporated and listed in Singapore is required to notify the company of its interest in writing within two working days of becoming aware that it is or had been (if it ceased to be one) a substantial shareholder. In addition, the substantial shareholder is required to notify the company in writing if there are subsequent discrete 1% changes in the substantial shareholder’s interests or if they cease to be a substantial share - holder, within two working days after they become aware of the change. The substantial shareholder dis - closure requirements also apply to corporations that are incorporated overseas, but with a primary listing on approved exchanges in Singapore. From a competition law perspective, merger parties may voluntarily notify CCS of their merger or anticipat - ed merger if, after conducting a self-assessment, they have concerns that the merger or anticipated merger has led to or may lead to a substantial lessening of
of statutory limits or regulatory approvals required for having control or share ownership in companies in certain regulated industries, such as banking, insur - ance, broadcasting, defence and newspaper publish - ing. 4.4 Dealings in Derivatives Dealings in derivatives are allowed, and are generally subject to the same restrictions as dealings in capital markets products (which include shares) under the Securities and Futures Act 2001. Under the Takeover Code, a person who has acquired or written any option or derivative that causes them to have a long economic exposure, whether absolute or conditional, to changes in the price of securities, will normally be treated as having acquired those securi - ties for the purposes of the mandatory offer rules. Where the acquirer triggers the mandatory offer requirement under the Takeover Code as a result of acquiring such options or derivatives (among others), the acquirer must consult the SIC to determine if a mandatory offer is required, and, if so, the terms of the offer to be made. 4.5 Filing/Reporting Obligations Dealings in derivatives in respect of certain securities of the target company subject to the Takeover Code during the offer period must be publicly disclosed. Full details of the dealings in derivatives should be provided so that the nature of the dealings can be fully understood. This should include, at least, the number of reference securities to which they relate (where rel - evant), the maturity date or, if applicable, the closing- out date and the reference price. Separately, under the Securities and Futures Act 2001 and the Securities and Futures (Reporting of Derivatives Contracts) Regulations 2013, a specified person who is a party to a specified derivatives con - tract (which includes a derivatives contract the value of which is determined by reference to the value of underlying stock or shares, among others) is required to report certain prescribed information to a licensed trade repository or licensed foreign trade repository in respect of the derivatives contract.
competition in a Singapore market. 4.3 Hurdles to Stakebuilding
It is open to a company to introduce more (but not less) stringent reporting thresholds – eg, in its consti - tution. Apart from the general restrictions that may be applicable to stakebuilding (see 4.1 Principal Stake- building Strategies ), the acquirer should be mindful
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