New Dawn for Listed Companies: SGX RegCo's Paradigm Shift Creates Fresh Restructuring Opportunities

Overview: A Transformative Regulatory Shift

Singapore Exchange Regulation (SGX RegCo) has implemented new measures geared at advancing Singapore towards a more disclosure-based regulatory regime aligned with major developed markets. The changes represent a move toward a less prescriptive, more disclosure-based and market-driven approach that focuses on decision-useful information for investors, while preserving key safeguards that uphold market quality and investor trust.

The reforms include lowering the profit test threshold for new listings from S$30 million to S$10 million and creating pathways for pre-revenue companies with strong growth potential in emerging industries to list on the Mainboard. SGX RegCo has also streamlined qualitative admission criteria whilst retaining key requirements around audit opinions, compliance with laws and regulations, and disclosure of material internal control weaknesses. In addition, SGX RegCo will, where possible, engage privately with issuers on their disclosures to avoid a chilling effect on the market, while requiring issuers to publicly disclose materially price-sensitive or trade-sensitive information. This represents a sophisticated understanding that public regulatory queries can themselves trigger market disruption, potentially exacerbating the very problems they seek to address, while ensuring that materiality as the touchstone for public disclosure is maintained.

Separate from the changes mentioned briefly above, this article focuses on the changes in the regulations with respect to trading suspensions and the financial watchlist.

Trading Suspensions: From Death Sentence to Breathing Space

Historically, a trading suspension has been traditionally viewed as the beginning of the end for a listed company. Once suspended, the conventional wisdom held was that a company's options were severely limited, and the value proposition of maintaining listed status became questionable at best. The new regime changes this paradigm entirely -- to minimise market disruption and provide certainty, trading suspensions will only be considered where there is clear evidence of going concern issues. More significantly, issuers whose securities are currently suspended from trading only because their ability to continue as a going concern is in doubt may apply to resume trading provided they are not undergoing formal insolvency or restructuring proceedings, and their boards confirm, with basis stated, that they can continue as going concerns. This represents a fundamental shift in philosophy - suspension is, in appropriate circumstances, no longer a one-way street, and there are opportunities for companies to find ways to continue as a going concern and maintain its listing status and represents a pro-restructuring mindset of the regulators especially for companies in early days of stress and this should encourage issuers to help from advisors early if they have potential financial issues.

This reform creates several critical opportunities for companies:

Operational/Financial Turnarounds: Companies facing temporary going concern doubts can now pursue restructuring strategies whilst suspended, with a clear pathway back to trading. This might include asset disposals, business model pivots, cost restructuring, or strategic partnerships - all undertaken with the knowledge that successful execution can lead to resumed trading.

Out-of-Court Restructurings: The explicit carve-out for companies "not undergoing formal insolvency or restructuring proceedings" incentivises informal, consensual restructurings and this should encourage issuers to start early intervention to resolve their problems versus leaving it to it being too late where the financial problems becomes much larger. Provided certain conditions are met, companies can now negotiate with creditors, implement debt-for-equity swaps, getting new financing (such as in exchange for equity or equity linked instrument) or pursue other balance sheet restructurings, without triggering formal proceedings that would preclude resumption of trading.

Board Accountability and Strategic Planning: The requirement that boards must confirm, with basis stated, their ability to continue as going concerns creates a structured framework for turnaround planning. Restructuring advisers can work with boards to develop credible, evidence-based recovery plans that satisfy both SGX RegCo's requirements and stakeholder expectations.

Preserving Listed Status Value: Perhaps most importantly, the reforms preserve the significant value inherent in listed status - access to capital markets, enhanced credibility, liquidity for shareholders, value for creditors, and currency for acquisitions. Further, the ability to access the capital markets in for quick liquidity will aid in out of court of restructuring.  Companies that might previously have delisted or had to pursue lengthy resumption of approvals can now pursue restructuring strategies taking full advantage of the listing status.

The critical factor will still be early intervention – Companies that actively engage in planning at the first signs of financial stress before problems metastasise have the best chance of developing credible and sustainable recovery plans that best serve stakeholder expectations and avoid any clear evidence of going concern issues.

Removal of the Financial Watch-List: Eliminating the Stigma of Losses

The financial watch-list will be removed in view of unintended negative effects on business confidence and access to financing by the issuers. Nonetheless, as consulted, SGX RegCo will require that issuers disclose their third and subsequent consecutive financial year of losses, and strongly encourages such issuers, where appropriate, to communicate their future plans and specific actions to improve financial performance. This addresses a long-standing concern that the watch-list created a self-fulfilling prophecy - companies placed on the list found it harder to carry on its business, making recovery more difficult and delisting more likely.

Business Confidence and Stakeholder Relations: Without the stigma of watch-list designation, companies can engage more constructively with suppliers, customers, and employees. This is critical for operational and financial turnarounds, where maintaining stakeholder confidence is essential.

Proactive Communication Strategies: The encouragement for loss-making issuers to communicate future plans and specific actions to improve financial performance creates an opportunity for companies to control their narrative. Rather than being passively categorised by the regulator, companies can proactively articulate their restructuring strategies, demonstrate progress and shape .

Long-Term Value Creation: The reforms recognise that consecutive losses do not necessarily indicate terminal decline. Many successful companies - particularly in growth sectors, cyclical industries, or those undergoing transformation - experience multi-year loss periods. The new regulations allow these companies to pursue long-term value creation strategies without the artificial pressure of satisfying the watch-list exit criteria.

Conclusion: Act Early, Preserve Value

The recently introduced regulatory changes represent a fundamental recalibration of Singapore's approach to listed company regulation. By moving from a more prescriptive, intervention-heavy model to a disclosure-based, market-driven approach, the reforms create significant new opportunities for listed companies.

Companies facing financial distress now have more options, more time, and more flexibility to pursue turnaround strategies whilst maintaining their listed status. Trading suspensions are no longer terminal events but rather potential breathing spaces for restructuring. The removal of the financial watch-list eliminates a significant barrier to rescue financing and stakeholder confidence. Listed companies that might previously have viewed delisting or liquidation as their only options can now pursue value-preserving restructuring strategies. Notwithstanding this, success in this area requires early intervention – companies that wait until problems become critical may face issues such as diminished options as financial distress deepens, reduced stakeholder confidence and patience, and potential forced entry into formal proceedings that will preclude trading resumption. By engaging with advisors early, amongst others, there will be time to develop credible turnaround plans that can be implemented, and maximum flexibility to preserve the company’s listed status and its inherent value.

Our experience in capital markets, coupled with the expertise of our restructuring team, in navigating complex stakeholder negotiations, developing credible turnaround plans and managing regulatory requirements, positions us uniquely to help distressed listed companies capitalise on this new regulatory environment.

The message is clear: suspension is no longer synonymous with failure, losses need not lead to delisting, and Singapore's capital markets are open to companies willing to pursue genuine restructuring and recovery maximising value for all stakeholders.

This article is produced by our Singapore office, Bird & Bird ATMD LLP. It does not constitute legal advice and is intended to provide general information only. Information in this article is accurate as of 30 October 2025.