It has come to my attention recently that one of the ETFs that are listed on the SGX is being delisted and that is the Lyxor Thailand MSCI ETF. If I'm not wrong, this is the first ETF that is being delisted from SGX. This can set as a case study on what happens when an ETF gets delisted from SGX though it may not necessarily hold true for any ETFs which are being delisted in the future.
Basically, Lyxor will declare a date, which is 24th of June and this date will be the last day of trading for this ETF. Anytime before this date, unitholders will be able to sell their holdings to the appointed market maker on SGX. After this date, you will not be able to sell your holdings on SGX anymore.
Subsequently, the ETF will be liquidated and the proceeds will be distributed back as cash to the unitholders through the CDP, who are still holding on this ETF after the last day of trading. In this case, the amount that is being distributed back will be based on the NAV of the ETF on the 22nd of July, which will be based on the closing level of the MSCI Thailand Index.
Thus, it is quite safe in the sense that if any ETF gets delisted, you will still get back your portion of the net assets of the ETF in the form of cash or stocks. The only risk is that if you buy an ETF at a high price and the ETF gets delisted at a lower price, you will suffer a realized loss if the distribution is in the form of cash.
Lyxor has published a FAQ on the delisting of this ETF and the FAQ can be found here.
Friday, August 14
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Kay,
ReplyDeletethe link to the FAQ is broken. Pls fix it. Tks
Kay,
ReplyDeleteThe link is now OK. Tks.
Hi VS Lingam,
ReplyDeleteThanks for telling me about the broken link.
Kay