Business

SGX seeking feedback on whether to retain quarterly reporting

The Singapore Exchange (SGX) may relax rules on mandatory quarterly reporting ­- a move that could cut compliance costs for 240 or so listed firms.

The regulator is seeking feedback on whether to retain quarterly reporting, which it implemented in 2003 for listed companies with a market capitalisation of above $20 million.

That was subsequently raised to $75 million.

"The UK and EU have done away with quarterly reporting," said Mr Tan Boon Gin, chief executive of SGX Regulation.

"Stakeholders, including investors, have also expressed concerns about compliance cost," he added.

Companies with a market value of at least $75 million must report results on a quarterly basis. That's 70 per cent of the 750 companies listed on the SGX.

The exchange is suggesting raising the threshold to $150 million. That would affect about 38 per cent of listed companies. Firms below the threshold need only report their interim and full-year results.

Another proposed option would be to require companies with market value of $150 million and a shareholder with at least 15 per cent stake to report results quarterly.

Minority shareholders of a listed company can also vote to opt out of quarterly reporting every three years.

The SGX has also proposed to simplify the format of the first and third quarter reports by cutting back the content.

The new reporting rules could be adopted in the second half of this year.

Mr Ernest Kan, deputy managing partner (markets) at Deloitte in Singapore, said the question is whether quarterly reporting is relevant for the remaining 280 companies.

This is particularly so since directors and shareholders may already have access to monthly management reports, he said.

Mr Robson Lee, a partner at Gibson Dunn & Crutcher LLP., said there is still a need for periodic updates by firms facing severe financial problems or a protracted downturn like those in the energy space.

Ms Stefanie Yuen Thio, joint managing partner at TSMP Law Corporation, added: "Arguably, it is even more critical for shareholders to receive frequent financial updates if the company (previously valued above $150 million) has fallen below the threshold due to worsening performance.

BUSINESS & FINANCE