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Private Stock Exchanges in Singapore

Private Stock Exchanges in Singapore

The financial industry is more dynamic than ever and the authorities in collaboration with the society and private companies are trying to create mechanisms which benefit all the stakeholders. One of these mechanisms is represented by private stock exchanges which could operate in Singapore sooner than expected.

At the moment, crowdfunding companies through which private companies sell a part of their shares in order to acquire capital is the closest mechanism to a private stock exchange, but the rules imposed on stock exchanges are far more extensive. Below, our Singapore company formation agents explain how private stock exchanges would work.

What is a private stock exchange?

Like its name says, a private stock exchange would be a trading platform for private companies only. Through it, shareholders in private companies in Singapore would be able to sell their shares to private persons interested in their business. However, the company would not be publicly listed on the Singapore Stock Exchange (SGX).

This would also mean a huge step for common people or even the employees who want to invest in a company which sells products or services they like, respectively the company they work for. Under the current regulations, this could be possible only when the company issued an initial public offering, known as an IPO, while on a private stock exchange this requirement would not be applicable.

Our company registration advisors in Singapore can explain the regulations related to issuing IPOs in the city-state.

Could Singapore host private stock exchanges?

In order to operate a private stock trading facility, its owners would need to pass the authorization procedure with the Monetary Authority in Singapore (MAS) and in the near future that could be an option the MAS should consider because of the benefits it would bring. Among these benefits are:

  • – Singapore private companies could attract thousands of investors;
  • – for the SGX it would mean a significant growth for its IPOs;
  • – Singapore would become very appealing to tech companies all over the world;
  • – many companies would set up businesses here and raise funds.

Up to this point, no private stock exchange has been created however if the right legal framework appears, this could be a real possibility.

Foreign entrepreneurs who want to invest in Singapore by opening companies are invited to contact our Singapore company formation representatives.