THE Small and Medium Capitalisation Companies Association (SMCCA) has responded to an opinion last Friday by Ong Chong Tee, the Monetary Authority of Singapore's (MAS) deputy managing director (financial supervision), in an article titled "Achieving a robust and vibrant securities market".
In his article, Mr Ong had stated that MAS sees "a need to mitigate potential conflicts of interests and ensure efficiency in regulation" for exchanges and that "there could be scope to reduce any overlaps between the oversight functions of the MAS and the exchanges".
SMCCA said that in a white paper on market regulatory regimes released in September 2014, it had highlighted Singapore Exchange's (SGX) potential conflict of interest and had also pointed out then that it was not easy for SGX to perform this unique role of promoter and regulator.
The association said that it is thus "glad to see MAS pointing out this potential conflict now and hopes that MAS can address this issue sooner and not later".
SMCCA also noted that Mr Ong had highlighted recent measures introduced by SGX and MAS and stated that these would improve the quality of listings.
SMCCA added that it had previously provided feedback to MAS and SGX on some of these measures and how they may not improve the quality of listings as intended. In its statement on Tuesday, SMCCA reiterated its concerns of the true independence of the intended listing committees as pointed out in a previously published white paper. "The association hopes that MAS can address this concern appropriately," it said.
SMCCA also restated its concerns over the implementation of minimum trading price, which it believes creates additional cost and complication to mainboard listing while not providing tangible benefits to investors and issuers.
Tan Choon Wee, president of SMCCA, said: "We are glad that MAS is planning to hold joint roundtable sessions with various stakeholders to gather feedback and ideas to improve our capital markets. SMCCA looks forward to meeting MAS regularly to discuss concerns from the other important stakeholders in the market - the issuers."
SMCCA ended off its response by agreeing with MAS's statement that a well-functioning securities market is a shared responsibility. "As such, feedback and concerns from all parties must be heeded," it said.