SGX partners with IMDA to help startups access capital markets

Tue May 23, 2017 - 11:05am GMT+0000
SGX partners with IMDA to help startups access capital markets

Singapore Exchange (SGX) is close to completing a deal with the city-state’s technology regulator, the Infocomm Media Development Authority (IMDA), to develop a system that will encourage local startups to list on the bourse.

The Accreditation@IMDA program is backed by the city-state’s government and aims to support and invest in early-stage growth startups, according to an announcement made by Dr. Yaacob Ibrahim, the Minister for Communications and Technology.

Under the agreement, the bourse operator will work with advisers from the securities industry, investors, and company founders to pair tech companies with potential investors. This will also allow the exchange operator to be engaged with tech-related firms at an earlier stage.

The move comes in the context where Singaporean tech startups such as Razer and Sea Ltd, Southeast Asia’s most valuable startup formerly known as Garena, are said to be considering listing in Hong Kong or the United States which are said to be more tech savvy.

SGX’s tie up with the regulator which oversees the technology, telecommunications, and media sectors in Singapore will also deepen the exchange’s technological sector approach.

According to Dr. Yacoob, the program will focus on four industries including artificial intelligence and data science, cyber security, immersive media, and Internet of Things (IoT).

While Singapore continues to be an international financial center, with a stable economic and political environment equipped with a well-developed regulatory and legal infrastructure, its securities market has continually lagged in development.

The recent quarters have seen an abundance in stock exchange delisting from the SGX. The last two years recorded 18 delistings in 2015 and 23 delistings in 2016.

In a related development, the bourse in March signed separate agreements with a crowdfunding platform and PricewaterhouseCoopers LLP’s Venture Hub to facilitate capital access for startups.

Another development saw the SGX consider adopting a dual-class share structure in order to enhance its appeal and enable entrepreneurs to expand more quickly. However, this is a move some fund managers have opposed.

SGX shares rose 2.1 percent to S$7.41 in Singapore trading as of 11.03 am, heading for the biggest rise since January 13.

More details about the partnership will be announced at the joint event with SGX next week.