THE Singapore Exchange (SGX) is pressing ahead with its plan to launch a new board to replace Sesdaq in January, despite the turmoil now engulfing global financial markets.

Setting up the new board,known as Catalist, is part of SGX's long-term strategy to attract both small, fast-growing firms, as well as big ones with plenty of 'corporate actions' to list in Singapore.

As such, the timing of its launch is not dependent on market conditions.

Like AIM, the new board will feature professional financial advisers - known as sponsors - who will play a key role in a company's listing process, and hold its hands, as long as it stays listed.

The new board's biggest attraction is reducing the time-frame for the listing process for a company from 12 to 17 weeks on Sesdaq to only five to six weeks for the new board.

Welcoming the launch of the new board, Phillip Securities' managing director said: 'This is a step in the right direction. Firms, which have to turn elsewhere, after failing to meet mainboard requirements, will now have a chance to list here.'

SGX's chief executive Hsieh Fu Hua, speaking at a media conference on Monday, expressed confidence that the new board would not cannabalise listing hopefuls which would otherwise have been listed on the main-board.

'Our expectation is that both markets will grow. Companies will have two different platforms for listing,' he said.

In particular, Asian firms may find the new board attractive, as the 'initial costs of listing and on-going costs of listings will be significantly cheaper than London - at least 33 per cent cheaper', he said.

And for the many Asian companies whose interest primarily hails from Asian investors, SGX 'enjoys an advantage over AIM which is London-centric'.

The new board will, however, not be open to Reits and business trusts which rely on dividend yields to attract investors, or exotic sectors such as bio-sciences where more disclosures may be required.

Mr Hsieh also took pains to stress that companies on the new board would be held to the same stringent standards as SGX main-board listed firms - even though their IPO documents and circulars would be reviewed by the sponsors.

'The quality of our market is as good as the quality of our supplies,' he said.

While SGX does not directly supervise the companies on the new board, it 'retains the power to discipline and ultimate accountability.'

And the key to success for the new board - sponsors - will be regulated by the SGX, staking their reputation to bring top-notched firms to the new board for listing.

Tight list of sponsors
Mr Hsieh said that the initial list of sponsors will be 'pretty tight' as SGX 'wants to work with the better ones on the market place'.

It is also appointing an advisory panel of market experts to advise it on the admission of sponsors.

There will be two tiers of sponsors - the full sponsor which will offer the full scope of services which include ensuring that a firm is eligible to list and preparing it for listing, and the continuing sponsor which helps a firm with its compliance on listing rules.

For the new board, SGX has also relaxed the rules to allow companies to be more fleet-footed in their corporate moves.

They will have a higher mandate for issuing more new shares, and more leeway to make acquisitions or disposals without going back to shareholders for approval.

And unlike mainboard-listed firms which are required to have at least two independent directors resident in Singapore, foreign firms listed on the new board will only need one resident independent director.

This is because they already have the sponsors holding their hands.