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Updated hot stock: SGX resumes trading up after unveiling separate regulatory unit

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SHARES of Singapore Exchange (SGX) resumed trading higher on Monday, after the bourse announced that its regulatory functions will be hived off to a separate unit, with its own independent board.

SGX shares were trading around S$7.75 a share, up 1 cent, when trading resumed at 12:45pm, compared to its Friday's close at S$7.74 a share. By 3:19pm, they were trading around S$7.83, up 9 cents, or more than 1 per cent.

Trading in SGX shares had been halted before the market opened on Monday, pending the release.

Shortly past noon, SGX announced that it would set up a separate subsidiary to undertake all the front-line regulatory functions it currently performs.

"The move aims to further enhance the governance of SGX as a self-regulatory organisation (SRO) by making more explicit the segregation of its regulatory functions from its commercial and operating activities,'' SGX said in a release.

The new unit will be governed by a separate board, which will be independent of SGX. Its directors will also be independent of any other corporation listed on SGX.

The Monetary Authority of Singapore (MAS) said the separation of roles is "an important step in strengthening the safeguards to manage potential conflicts of interest between SGX's commercial and regulatory roles".

"The independence of the subsidiary company from SGX will be an important factor for its success. MAS will therefore require the chairman of the subsidiary company and a majority of its directors to be independent of SGX and its regulated subsidiaries, and for all directors to be independent of any corporation listed on SGX,'' the regulator said.

MAS will continue to directly regulate SGX in terms of its obligations as a listed company and market operator, as well as maintain oversight of SGX's regulatory responsibilities as performed by its regulatory subsidiary.