SGX RegCo to tighten oversight of Singapore market
Whistle-blowing office among initiatives
The regulatory arm of the Singapore Exchange (SGX) has devised a road map to tighten its oversight of the market here, which includes setting up a whistle-blowing office and increasing the accountability of auditors, sponsors and issue managers.
SGX Regulation (SGX RegCo) chief executive Tan Boon Gin announced the initiatives during an update on the organisation's measures.
They will help to increase the trust and accountability of all participants within the market community, he said, adding: "We are looking to increase our regulatory presence in order to strengthen investor confidence and deter wrongdoing."
SGX RegCo's Listings Disciplinary Committee has started hearings against three companies, to ensure that penalties will be served if there has been any wrongdoing.
It will also establish a whistle-blowing office to channel all regulation-related feedback to staff who can process these concerns.
"We want to assure the market that we take whistle-blowing seriously and that we are committed to following up on any information that we receive in accordance with a public policy that we are going to publish on our website that deals with, among other things, how we maintain the confidentiality of the information," Mr Tan said.
Sponsors for Catalist companies will also be held more accountable.
Sponsors are professionals who vet offer documents and can come from banks or law and corporate finance firms.
Mr Tan noted: "Currently, we already perform regular and thematic inspections of our sponsors. However, if the answers that we receive are not satisfactory, you can expect us to go in to inspect them immediately, off-cycle, to check if there are gaps in their processes that need to be rectified."
Auditors will be held more accountable as well, with SGX RegCo holding public consultations over the next few months on requiring a second auditor in certain cases, and appointing a Singapore-based auditor for listed companies.
It is also reviewing its policies to ensure they stay effective, said Mr Tan, such as the policy of having a minimum trading price (MTP).
He said: "We have actually developed other tools that are more direct, more effective and more surgical than MTP in addressing the risk of manipulation.
"At the same time, we have observed certain unintended consequences from MTP. For example, when a company consolidates its shares, in theory its market capitalisation should remain the same.
"But in practice, once companies have actually done the consolidation, we have observed that their share price has fallen post-consolidation and their market value has further declined."