On 6 February 2026, the Monetary Authority of Singapore (MAS) has issued a Consultation Paper proposing a key policy change to raise the share financing threshold for selected equity subscription transactions on the Singapore Exchange. The initiative is aimed at strengthening investor participation, improving market vibrancy, and aligning financing practices with prevailing international standards. 

 

 

Proposed Change 

MAS proposes increasing the maximum financing allowed for the subscription or purchase of shares under initial public offerings (IPOs), employee share option schemes, and rights issues from the current 80% to 90% of the subscription or purchase price. 

 

 

Rationale 

Share financing facilities are typically unsecured for a short window—between subscription and allotment—after which the allocated shares serve as collateral. The proposed 90% threshold aims to balance market accessibility with safeguards against speculation and brings Singapore closer to international practices. 

 

 

Applicable Institutions 

The proposed change applies to all financial institutions permitted to offer share financing, including banks, merchant banks, finance companies, insurers, and capital markets services licence (CMSL) holders. These institutions must continue to maintain robust pre-transaction credit controls and prudent credit risk management. 

 

 

Consultation Timeline 

MAS is seeking feedback on the proposal, with the consultation period open until 16 March 2026. 

 

 

Looking Ahead 

If implemented, the revised requirement is expected to boost investor participation, enhance market competitiveness and liquidity, without compromising on investor credit discipline. Coupled various other measures to boost the quality of public companies on SGX, this latest consultation should be positively received by market participants, and we can expect regulatory implementation in 2026. 

 

 

How can we help?  

 

Capital Governance assists firms in: 

• Assessing the FI’s risk management framework, to update the FI’s financial and operational capacity to handle higher margin financing. 

• Policy Alignment: Guiding firms to integrate new regulatory expectations into their internal policies and controls. 

… and more