On 31 March 2020, the Singapore Exchange Regulation ("SGX RegCo"), the Accounting and Corporate Regulatory Authority ("ACRA") and the Monetary Authority of Singapore ("MAS") released an updated guidance on the holding of general meetings in response to the COVID-19 outbreak (the "31 March News Release").
The 31 March News Release
In brief, issuers who wish to proceed with their general meetings before 30 April 2020 must ensure that the manner of conduct allows shareholders to ask questions, allows the meeting to be shown by "live" webcast, and allows for proxy voting.
The quorum requirements at such meetings will be met through the attendance of the minimum number of shareholders as specified in the issuer's constitution or up to the number of individuals allowed under the Infectious Diseases (Measures to Prevent Spread of COVID-19) Regulations 2020, whichever is lower.
Other key developments:
- Shareholders' Questions. Issuers must allow shareholders the chance to ask questions, including by inviting shareholders to submit questions in advance. Substantial queries received should be addressed by the issuer at the general meeting via the issuer's website, through "live" webcast and on SGXNet.
Issuers may adopt other arrangements, such as organising virtual information sessions prior to general meetings and close of proxy voting, to allow shareholders to ask questions and engage with management and the directors.
- Proxy Voting. Shareholders voting in proxy must appoint the chairperson of the general meeting to act as proxy and direct the vote at the general meeting. Proxy forms are to be submitted by mail or electronically.
- Notice of Meetings. Issuers are strongly encouraged to provide at least 21 days' notice of the meeting to shareholders, to allow shareholders to consider the resolutions, pose questions if necessary and vote via proxy.
- Minutes of Meetings. Issuers must also publish minutes of the general meetings on its website, including responses from management and the directors to substantial queries and relevant comments from shareholders as recommended in the Code of Corporate Governance 2018.
The Ministry of Finance and Ministry of Law also announced on 31 March 2020 that there will be upcoming legislation introduced at the next sitting of Parliament (on or about 7 April 2020). The proposed legislation is meant to help entities who find it challenging or are unable to hold meetings where personal attendance is provided for in any written law or legal instrument, in light of the Ministry of Health's safe distancing measures.
The 31 March News Release is the latest in the series of guidance notes issued by the SGX RegCo on holding of general meetings in light of the COVID-19 situation:
- "SGX RegCo gives additional two months to issuers to hold AGMs due to concerns about large-group meetings amid COVID-19" dated 27 February 2020 (the "27 Feb News Release");
- "SGX RegCo provides guidance on holding of general meetings amid COVID-19" dated 19 March 2020 (the "19 March News Release"), which has been superseded by the 31 March News Release; and
- "Guidance on safe distancing measures for issuers when conducting meetings" dated 25 March 2020 (the "25 March News Release").
The 27 Feb News Release
SGX RegCo will allow issuers with a 31 December financial year-end ("Qualifying Issuers"), up to 30 June 2020 to hold annual general meetings ("AGMs") to receive and adopt their 31 December 2019 financial results ("Waiver"). The Waiver is intended to provide flexibility for issuers in light of the COVID-19 situation, to consider the best way to conduct their AGMs.
Qualifying Issuers seeking the Waiver have to fulfil certain criteria, such as obtaining the approval of a similar application for extension of time by ACRA. Issuers must still issue their annual report to shareholders and the Singapore Exchange by 15 April 2020.
An application to SGX RegCo will be required to seek the Waiver.
The 25 March News Release
SGX RegCo issued the 25 March News Release as a joint statement with ACRA and MAS.
ACRA, MAS and SGX have stated that they expect all issuers to comply with the Singapore Ministry of Health's mandatory safe distancing measures which were released on 24 March 2020.
The 25 March News Release stated that ACRA and MAS were in discussions with other government agencies to propose legislative amendments in relation to the conduct of meetings, with the 31 March News Release being the initial follow-on update.
Conclusion
The COVID-19 situation, as well as the Singapore authorities' measures in response to it, remain fluid.
It should be borne in mind that despite the COVID-19 situation, the continuous disclosure obligations imposed on issuers continue to apply. The SGX has said in the 31 March News Release that the issuer's disclosures are crucial in shareholders' decision making, with the COVID-19 situation having had an extraordinary global impact in just a matter of weeks. The SGX has expressly reminded issuers in previous News Releases to make timely disclosures on the financial impact or any other material aspects that the COVID-19 situation may have on their operations.
