Governance and business friendly market rules not mutually exclusive

NURTURING the development of any capital market is an ongoing exercise in which the central consideration is always balancing being "business friendly" on one hand with increased governance on the other.

The Monetary Authority of Singapore (MAS) recognises this - a little over a week ago, it said that four years after it last reviewed the Code of Corporate Governance in 2012, it will do so again in order to produce "a balanced and progressive code that not only serves to enhance Singapore's corporate governance standards, but is also pragmatic and workable in practice".

The problem that MAS and all regulators face of course, is how high to set the governance bar. Set it too high and businesses will complain about compliance costs and being stifled; set it too low and minority rights will be adversely affected. As it stands now, governance practices are admirable, so much so that shortly after the MAS announcement came news that Singapore topped Corporate Governance Watch (CGW) 2016, a study by investment house CLSA and the Asian Corporate Governance Association that ranked markets by various corporate governance categories. Also notable last week was the issuance of a surveillance handbook by the Singapore Exchange (SGX) that aims to instruct brokers on activities that are considered illegal in daily trading so as to engage the aid of the dealing community in stamping out manipulation.