MAS and SGX RegCo flag risks linked to trading incited by online discussion forums

THE Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) have urged the public to be on "heightened alert", flagging risks related to trading in securities incited by online discussion forums and social media chat groups.

MAS and SGX RegCo are monitoring market activities for signs of false trading or other forms of misconduct, they said.

In a statement on Tuesday, the two bodies said that discussions in online websites and platforms suggest possibilities of speculative activities in the Singapore stock market. They noted that this could be similar to the recent activities in US markets relating to stocks such as GameStop, AMC Entertainment Holdings and BlackBerry.

"Restrictions may be placed on the trading accounts of those suspected of such misconduct and the relevant securities may be placed under designation or suspension. MAS and SGX RegCo are working closely with SGX member firms to ensure our market remains orderly," they said.

The regulator had issued a similar warning last December, and noted that individuals behind possible market misconduct were using Telegram chat groups and social media channels to engage in "pump-and-dump" schemes.

"The public should be aware that certain individuals may exploit this interest for their own benefit through 'pump-and-dump' activities that can amount to market misconduct under the Securities and Futures Act (SFA)," the two agencies said.

This could include people - either working alone or in a group - to encourage other members in a chat group to trade a particular security.

As more members in the group do so, the share price goes up. This could be similar to the way certain investors collectively pushed up certain share prices in the US. They might then sell the securities which they had bought earlier - typically in a low-volume, low-price security - at a profit without alerting other investors.

SGX RegCo and MAS warned that any conduct that intentionally, knowingly, or recklessly creates a false or misleading appearance regarding the active trading, market or price of securities is prohibited under the SFA.