Singapore

Subsidiary to take over SGX regulation

The Singapore Exchange (SGX) announced yesterday that it will establish a separate subsidiary company (RegCo) to undertake its frontline regulatory functions.

The move aims to further enhance the governance of SGX as a self-regulatory organisation by making more explicit the segregation of its regulatory functions from its commercial and operating activities, the exchange operator said.

SGX said it expects to set up RegCo by the second half of next year.

It also resumed trading of its shares. SGX had halted trading before markets opened to clarify a report in The Straits Times yesterday, titled "Weighing the merits of hiving off SGX's policing job".

The commentary had said there was talk SGX may be planning to set up a separate unit to house its regulatory functions.

SGX, which suffered its longest trading disruption ever last Thursday, has long faced criticism over the perceived conflicts that arise between its roles as a profit-making stock exchange operator and as a market regulator.

SGX said RegCo would be governed by a board of directors separate from that of SGX. All directors of RegCo will also be independent of any other corporation listed on SGX.

RegCo will be responsible for discharging all of SGX's market regulatory and supervisory functions and will report to its own board. The chief regulatory officer of SGX will be the CEO of RegCo and report directly to RegCo's Board.

The Monetary Authority of Singapore will continue to regulate SGX as a listed company and market operator, and maintain oversight of the regulatory responsibilities of RegCo.

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