Editor’s note: This is general educational information about shareholding disclosure obligations and how they interact with exchange rules. It is not investment or legal advice and does not describe any particular company or shareholder. It is based on the filings and rulebook material listed at the end.

Analysis: a rule designed for legibility, at the cost of resolution

Rounding down to a whole number is a deliberate trade. A continuous disclosure duty, filing on every change in holding, would produce a stream of notices that nobody could read and would make ordinary portfolio management unworkable for large holders. The whole number step reduces the flow to a manageable set of events at the price of hiding movement inside each band.

That price is not evenly distributed. The percentage point is the same width at every level, but the number of shares it represents is fixed by the company’s total votes, so the disclosure granularity is coarse for a holder at 5% and equally coarse at 25%. And because the level is computed on the total votes attached to all voting shares, a shareholder who does nothing at all can cross a level when the company issues new shares or cancels repurchased ones, since the denominator moves.

For a reader, the practical consequences are specific. A gap between filings is not evidence that a holder has been inactive, only that they have not crossed a whole number. A notice arriving two business days after a small purchase may reflect accumulation that started long before. The date the shareholder became aware of the change, not the date of the trade, starts the clock for a change in interests, which explains filings that appear to arrive late. And the interest based test means the identity on the notice may be a person with an interest rather than the registered holder, which is why the particulars and circumstances required in the notice, rather than the headline percentage, carry the information.

What the documents say

The disclosure that tells the market a large shareholder has moved is not triggered by a trade, a value or a stake reaching a round figure. It is triggered by a change in a defined quantity called the percentage level, and that quantity is a whole number. Everything below the decimal point is discarded before the test is applied, which is why a shareholder can buy for months and disclose nothing, then file a notice after a single small purchase.

Who counts as substantial

A substantial shareholder is a shareholder with an interest or interests in one or more voting shares, excluding treasury shares, where the total votes attached to those shares is not less than 5% of the total votes attached to all voting shares, excluding treasury shares, in the company. That definition appears in the SGX Listing Rules by reference to section 2 of the Securities and Futures Act.

Two features of it matter more than the 5% figure. The test runs on votes, not on economic ownership, so non-voting or limited voting instruments do not carry a holder over the line. And it runs on interests rather than registered holdings, which brings in shares held through nominees, trusts and other arrangements in which the person has an interest as the statute defines it.

What the percentage level is, and why it is a whole number

Percentage level, as described in a filing by a Singapore incorporated issuer with the SEC, means the percentage figure obtained by expressing the total votes attached to voting shares in which the substantial shareholder has an interest, immediately before or immediately after the relevant time, as a percentage of the total votes attached to all the voting shares in the company, and, if it is not a whole number, rounding that figure down to the next whole number.

Rounding down converts a continuous holding into a step function. A holder sitting just under the next whole percentage point has the lower level, and buying enough to reach that point changes the level and requires a notice. Buying a much larger quantity that stays within the same whole number changes nothing that has to be disclosed. The same applies on the way down, where selling within a band is silent and the sale that takes the figure below the boundary produces a filing.

The obligation attaches to three events and runs on a short clock. The constitution of a recently listed Singapore incorporated company, filed with the SEC in 2026, records the standard formulation: for as long as the shares are listed on SGX, a member must notify the company on becoming a substantial shareholder, on any change in the percentage level of their interest while they remain one, and on ceasing to be one, giving the particulars of the shares beneficially owned, or of the change including its date and circumstances, or of the date and circumstances of the cessation. Each notice is due within two business days of becoming a substantial shareholder, of the date the shareholder becomes aware of the change in interests, or of the date of cessation. The document ties the terms to sections 2(4), 2(6), 4 and 136 of the Securities and Futures Act and records that the requirement does not apply to the Depository.

An earlier filing by another Singapore incorporated issuer describes the same duty in the same terms, including notification within two business days of becoming a substantial shareholder and of any change in the percentage level of interest, which shows how long this architecture has been stable.

What follows once someone is inside the 5% line

Substantial shareholder status is not only a filing obligation. It changes what the company may do with that person under the listing rules. Rule 812 prohibits placing an issue of shares to the issuer’s directors and substantial shareholders, to their immediate family members, to substantial shareholders, related companies, associated companies and sister companies of the issuer’s substantial shareholders, and to corporations in which the issuer’s directors and substantial shareholders have an aggregate interest of at least 10%, along with anyone the Exchange considers to fall into those categories.

The exceptions show what the prohibition is guarding. Specific shareholder approval lifts it, with the person and their associates abstaining. A placement to a substantial shareholder is permitted without approval where that shareholder has no board representation direct or through a nominee, has no control or influence over day to day affairs or over the terms of the placement, the placement is run through an independent process such as book-building, it is made to more than one placee, and the shareholder’s proportionate holding after the placement is no higher than before it.

The status feeds other rules too. Independence requirements for qualified persons and property valuers are drafted by reference to substantial shareholders. In a rights issue, an undertaking by a substantial shareholder to take up entitlements needs a confirmation from a financial institution that it has the resources, and substantial shareholders with control or influence rank last for excess rights shares and odd lot rounding. For issuers with global depository receipts listed here, the corporation must announce any notice of substantial shareholders’ interests, or of a change in the percentage level, when it receives it, and may follow home exchange rules where that exchange regulates such notifications. Separately, a controlling shareholder is defined at 15% of total voting rights or actual control, so the two thresholds sit at different heights and carry different consequences.