Shaping the SGX investors want

Chan Chao Peh

SINGAPORE (May 24): For years, the Singapore Exchange has relied on a disclosure-based approach to regulate the behaviour of its listed members.

In a disclosure-based regime, the responsibility is on listed companies to keep shareholders up to speed on what’s going on with the business by making timely announcements of material changes or developments.

But since the penny stock crash of 2013, the SGX has launched more measures to ensure the market functions in an orderly manner.

These include circuit breakers, “trade with caution” warnings for stocks showing unusual trading movements and “notices of compliance”. To deter market manipulation, a “surveillance handbook” has also been issued to brokers, clearly listing the typo­logies and possible patterns of market manipulation.

In addition, SGX can now impose fines on companies, although it has yet to exercise this power. And when individual company directors are found to be wanting, SGX RegCo can issue a public reprimand.

Even so, some market observers have asked for the regulator to be given more bite.

“We try to be more surgical in identifying and addressing specific issues, specific companies, rather than use an overly blunt instrument that just burdens everybody,” explains Tan Boon Gin, CEO of SGX RegCo.

On May 31, SGX RegCo will hold a regulatory symposium with the theme “The Market You Want”. Professor Tan Cheng Han, chairman of SGX RegCo, will be giving the opening address. Chew Chin Yee, head of regulatory development and policy at SGX RegCo, will give an update on the regulatory landscape.

There will be a panel discussion involving Lock Yin Mei, partner at law firm Allen & Overy; Ismail Gafoor, CEO of PropNex; Umakanth Varottil, associate professor at the National University of Singapore; Stephen Chen, a full-time retail investor; and Pearly Yap, senior portfolio manager at Eastspring Investments.

The discussion will be moderated by Ben Paul, editor-at-large of The Edge Singapore.

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