More punch for SGX's queries, trade with caution warnings

IT is slightly more than two months since Singapore Exchange (SGX) introduced its "Trade With Caution" (TWC) warning notifications, which are sometimes issued when companies are unable to explain odd activity in their shares.

The number of TWCs handed out in recent weeks has dropped off sharply from the early days, suggesting that the exchange has become more circumspect when wielding its new regulatory tool. This is welcome because too many TWCs in circulation would dilute their usefulness.

However, if the entire querying/TWC warning mechanism is to serve its intended purpose of improving disclosure governance and discipline, the process should be improved. As it stands now, unusual activity typically triggers a query, followed by a reply which may or may not convey explanatory information, followed sometimes by a TWC and then the matter ends there.