The Singapore Exchange has reminded issuers of their continuing obligation to make disclosures of material information on a timely basis, including any financial or other material impact that the COVID-19 pandemic may be having on their operations. This follows a regulator’s guidance note issued in early February 2020 (in connection with amendments to Practice Notes) clarifying that in assessing whether a disclosure should be made, issuers should apply both a price-sensitivity test and a trade-sensitivity test.

Volatility in trading activated circuit breakers on two days in mid-March with respect to 15 stocks listed on the Exchange. So far, however, the Exchange has taken no steps to restrict short-selling. Instead, it is taking the position that short-selling, at least in the present situation, facilitates liquidity and price discovery. To prevent market abuse, it is relying on existing safeguards, including requirements to mark sell orders as either normal or short and to report open short-sell positions, and is closely monitoring the markets to ensure that price discovery continues to be orderly.

The Monetary Authority of Singapore (MAS) and the financial industry comprising members of the Association of Banks in Singapore, the Life Insurance Association, the General Insurance Association and the Finance Houses Association of Singapore, have also collaborated on a package of measures to ease financial strain on individuals and small and medium enterprises (SMEs). These measures are part of a larger set of initiatives announced in the Singapore government’s 2020 budget, and include, for individuals, relief in the form of deferred repayment of residential loans, reduced interest on unsecured loans, deferred premiums for life and health insurance and flexible instalment plans for general insurance; and for SMEs, access to low-cost funding, among other measures.

Lenders we have been advising all sound a common theme, for now: They are prepared to support borrowers facing financial difficulties brought about by COVID-19, and to restructure payments and/or provide additional financing for working capital. While the number of cases heading to the courts will still likely increase, the rate of increase is likely to slow down.

To facilitate banks playing their role as aforesaid, the MAS will seek to maintain a high level of SGD and USD liquidity in the banking system. The MAS has announced that it will provide up to US$60 billion of funding to banks in Singapore through a new MAS USD Facility agreed to between the MAS and the US Federal Reserve. The MAS USD Facility will support more stable USD funding conditions in Singapore, and facilitate USD lending to businesses in Singapore and the region. It will also contribute to global efforts by central banks to maintain stability and normal functioning of financial markets. Under the MAS USD Facility, the MAS will swap USD for SGD under an auction mechanism. Details on the auction schedule, as well as the terms and conditions for the MAS USD Facility, can be found on the MAS website.

On the judicial front, the Singapore courts have not closed, but they are ramping up the use of videoconferencing for hearings—not exactly business as usual but these are efforts to balance the need for our courts to continue operations while instituting adequate safeguards in the light of the pandemic.

On April 1, 2020, the Singapore Ministry of Law issued a press statement that it will be introducing a COVID-19 (Temporary Measures) Bill in Parliament next week which would offer temporary relief to businesses and individuals who are unable to fulfil their contractual obligations due to COVID-19. The legislation would:

• Cover, among other things, leases or licences for non-residential immovable property, construction and supply contracts, and certain loan facilities granted by a bank or a finance company to small and medium enterprises;
• Prohibit a contracting party from taking certain legal actions against a non-performing party, e.g., court and insolvency proceedings, enforcement of security over immovable property as well as movable property that is used for the purposes of business or trade, and calls on performance bonds given pursuant to a construction contract.

The bill would also increase monetary thresholds for individual bankruptcy and corporate insolvency from S$15,000 to S$60,000 and from S$10,000 to S$100,000, respectively, and lengthen the period to respond to statutory demands. Temporary relief would also be available to directors who fail to prevent their companies from trading while insolvent as a result of debts incurred in the ordinary course of business, absent fraudulent acts.

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