Substantial shareholder disclosure

[Mushy]

THE Monetary Authority of Singapore (MAS) has slapped a S$200,000 civil penalty on Lim Soon Fang for not disclosing changes in, and providing false information regarding his shareholding in Asia-Pacific Strategic Investments Limited (ASIL).

https://www.businesstimes.com.sg/compani...areholding


I was reading this piece of news and I wondered retail investors are required to take the initiative to inform listco or authority if we become substantial shareholder (5% or more of the shares)? I always thought this sort of thing is triggered automatically backend by the authority (SGX CDP), same like the top 20 shareholder lists in ARs.

[specuvestor]

You have to inform the company secretary. SGX is the checker.

Similarly Top20 shareholders is technically from the Company Secretary but nowadays they get their info mostly from CDP, though there may be some scripts floating around.

[dreamybear]

I think this is indeed "scary" if the onus is on the "ordinary layman" retail investor, as in I wonder how many people know abt the rule. There shd perhaps be some warning / notes when we buy shares thru' our online brokers.

I took a look at some of the lowest mkt cap listed company in SG ( https://www.businesstimes.com.sg/stocks/...talisation pg 71/72 ). Taking a SGD$2m mkt cap listed co as an e.g., a 5% stake wld be $100,000 which is abt the price of a new car in SG.

I think it wld be fairer if there is a warning letter from the CDP or some authorities as it cld be just a honest mistake for a layman.

[opmi]

You have to inform the company secretary. SGX is the checker.

Similarly Top20 shareholders is technically from the Company Secretary but nowadays they get their info mostly from CDP, though there may be some scripts floating around.

The scrips will be under the Registrar, who will register the shares transfers under instruction of the Corp Secretary. So the Corp Sec would know and can get the list from Registrar.

"Floating around" scrips that are transferred but not registered with Corp Sec is Boh Pah Kay one...hahaha

[opmi]

I think this is indeed "scary" if the onus is on the "ordinary layman" retail investor, as in I wonder how many people know abt the rule. There shd perhaps be some warning / notes when we buy shares thru' our online brokers.

I took a look at some of the lowest mkt cap listed company in SG ( https://www.businesstimes.com.sg/stocks/...talisation  pg 71/72 ). Taking a SGD$2m mkt cap listed co as an e.g., a 5% stake wld be $100,000 which is abt the price of a new car in SG.  

I think it wld be fairer if there is a warning letter from the CDP or some authorities as it cld be just a honest mistake for a layman.

To collect 5% on $2m mkt cap, also take deliberate effort and time. So really no excuse.

Onus on the investor to disclose. The guy that was fined probably do it deliberate to hide.

The process is quite simple.  

Fill up Form 3 and Form C and email the Corp Sec or their service provider, within 2 business days of your transaction (T+2) 

https://www.mas.gov.sg/regulation/capita...Securities

[ghchua]

The problem is that it might be pretty troublesome for a trader who often buy and sell and hit the 5% mark up and down frequently.

For example, let's say he currently holds 4.99% of the company. He buys 100,000 shares and goes above 5% slightly. He has to declare that he is now a substantial shareholder of the company, owning more than 5%. Then the next day, he sell down his 100,000 shares, and he has to make another declaration, informing that he is no longer a substantial shareholder of the company now as he holds less than 5%. And the following day, he buys another 100,000 shares, and he would have to make another declaration that he is now a substantial shareholder again etc.

As you can see from the above, it is not a one time disclosure but rather an ongoing one.

[donmihaihai]

There is really no such thing as retail shareholder. Shareholder is shareholder. Either one with control or not. Rule doesn’t change just because I deemed myself as retail shareholder.

Trading around the disclosure mark is rather stupid. Owning large block of shares or large percent of the company usually has more purpose than some trading gain.

[weijian]

There is really no such thing as retail shareholder. Shareholder is shareholder. Either one with control or not. Rule doesn’t change just because I deemed myself as retail shareholder.

Trading around the disclosure mark is rather stupid. Owning large block of shares or large percent of the company usually has more purpose than some trading gain.

VB donmihaihai put it very succinctly. When we go down to the basics behaviorally, as OPMIs, we probably should realize where is our practical limitations (ceiling) and find our place in the market. At the same time, we can't put up excuses (a shareholder is a shareholder) because we are limited.

[ghchua]

There is really no such thing as retail shareholder. Shareholder is shareholder. Either one with control or not. Rule doesn’t change just because I deemed myself as retail shareholder.

Trading around the disclosure mark is rather stupid. Owning large block of shares or large percent of the company usually has more purpose than some trading gain.

Hi donmihaihai,

A shareholder holding 5% of a company is considered under the rule as a substantial shareholder, but certainly he needs more than that to be a controlling shareholder. He might just be a retail investor holding a big block of shares in a small cap company, with no representative on the board at at all. So, under the rule, he needs to disclose his holdings but practically, his stake is small as compared to other major shareholders in a small cap company, which are normally tightly held and controlled by parties acting in concert like family members and relatives.

Trading around disclosure mark can be seen in big funds too. You can see sometimes funds disclosing that they have gone from 5% to 4.99%, and then subsequently a few days later, disclose that they have came back from 4.99% to 5%. This kind of consistent "around the mark" disclosure to me is pretty useless, and it just shows how the rules had been enforced.

[corydorus]

The 5% market and the fluctuation. Don't think is useless. At least we know is fluctuating and they are trading.

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