Equities private placement regime in Singapore

1. Prospectus requirement

  • Where a person as principal, in relation to offers of securities or securities-based derivatives contracts:
    • makes (either personally or by an agent) an offer to any person in Singapore which upon acceptance would give rise to a contract for the issue or sale of those securities or securities-based derivatives contracts by him or another person with whom he has made arrangements for that issue or sale; or
    • invites (either personally or by an agent) any person in Singapore to make an offer which upon acceptance would give rise to a contract for the issue or sale of those securities or securities-based derivatives contracts by him or another person with whom he has made arrangements for that issue or sale.

2. Prospectus exemptions

Key exemptions
  • Small offers where total amount raised from such offers within any 12 month period does not exceed SGD 5m (or its equivalent in a foreign currency) in aggregate and such offers are restricted to persons with prior relationships and connections with the issuer (i.e. one that is directed at a pre-identified individual or entity and should be conducted in a discrete manner and not be subject to any mass solicitation).
  • Private placement offer made to no more than 50 persons within any 12 month period.
  • Offer to Institutional Investors, 1 An “Institutional Investor” is defined under Section 4A of the Securities and Futures Act (Cap. 289 of Singapore) (“SFA”) to include: (a) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country whose principal activity is to manage: (i) its own funds; (ii) the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or (iii) the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country; (b) the Government of Singapore or a central government in a country other than Singapore; (c) a bank licensed under the Banking Act (Cap. 19 of Singapore) (“BA”); (d) a finance company that is licensed under the Finance Companies Act (Cap. 108 of Singapore); (e) an approved exchange; (f) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere; or (g) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors.  Accredited Investors 2 An “Accredited Investor” is defined under Section 4A of the SFA to include: (a) an individual: (i) whose net personal assets exceed in value SGD 2m (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe; (ii) whose financial assets (net of any related liabilities) exceed in value SGD 1m (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, where “financial asset” means: (1) a deposit as defined in Section 4B of the BA; (2) an investment product as defined in Section 2(1) of the Financial Advisers Act (Cap. 110 of Singapore); or (3) any other asset as may be prescribed by regulations made under Section 341 of the SFA; or (iii) whose income in the preceding 12 months is not less than SGD 300,000 (or its equivalent in a foreign currency) or such other amount as the Monetary Authority of Singapore (“MAS”) may prescribe; or (b) a corporation with net assets exceeding SGD 10m in value (or its equivalent in a foreign currency) or such other amount as MAS may prescribe, as determined by: (i) the most recent audited balance-sheet of the corporation; or (ii) where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months.  or certain other categories of investors.

3. Ability to offer shares to

3.1 Institutional/professional/authorised investors (for example investment funds, insurers, pension funds)

Yes, see response in paragraph 2 above.

3.2 High net worth individuals 

Yes, see response in paragraph 2 above.

3.3 Retail/public/others

Only on the basis of an approved prospectus or subject to complying with the statutory exemptions, the key ones of which are set out in paragraph 2 above.

4. Can the issuer approach potential investors on their own?

Generally, yes, subject to compliance with any applicable requirements / exemptions concerning an offer of securities/ securities-based derivatives contracts, the key ones of which are set out in paragraph 2 above and other prescribed requirements (e.g. advertising restrictions).

5. Can the issuer's financial adviser/ placement agent approach potential investors on their own?

Generally, yes, subject to compliance with any applicable requirements / exemptions concerning an offer of securities/ securities-based derivatives contracts, the key ones of which are set out in paragraph 2 above and other prescribed requirements (e.g. advertising restrictions).

6. Are there any other exemptions which may be relied on?

No. Not expressly covered under the Securities and Futures Act (Cap. 289 of Singapore) (“SFA”).