Independence of Catalist sponsors crucial

IF a sponsor of a company listed on Singapore Exchange (SGX)'s Catalist board is effectively the first line of defence - or frontline regulator - then the sponsor's commercial and regulatory roles should be made distinct. Some form of role separation would help limit conflicts or perceptions of conflicts - as has been the case at SGX since it hived off its regulatory role from its commercial operations to create an independent SGX Regulation.

The reality for most corporates, of course, is that such a move would be hard to swallow given the impact on bottom lines. Nevertheless, some changes would be welcome.

Catalist sponsors already have to comply with some rules relating to independence and conflicts of interest. They are required to have adequate systems and resources, including controls, procedures and other safeguards, to maintain their independence and avoid conflicts of interest.