'Comply or explain' - or 'comply or else'?
The Code's requirement is given effect through the SGX Listing Manual - which is mandatory, not optional.
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IN ADDITION to the installation of a new leadership at the Singapore Exchange (SGX), industry insiders are also sensing the emergence of a new approach to the regulatory regime.
For one thing, the regulator appears to be knuckling down on the Code of Corporate Governance. In October, Tan Boon Gin, SGX's new chief regulatory officer, remarked that he was surprised "at the number of times (the Code) was referred to as optional or best practice". He added that he plans to deal with the failure to properly "comply or explain" by using the new enforcement powers given to the Exchange, which include levying fines and denying a listed company access to the securities market.
At the same time, SGX announced it had engaged KPMG to examine the annual reports of over 550 mainboard-listed companies to determine how they are abiding by the Code's "comply or explain" requirements. It will then work, "one-on-one", with companies that fall short to improve how they comply with the Code.
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