SGX Regco needs backing from better enforcement

THE Singapore Exchange's new regulatory unit SGX Regco - known as Singapore Exchange Regulation Pte Ltd in full - commences operations in about a month's time. Its incorporation represents the latest step in an evolutionary process that began some 17 years ago when SGX was first formed and floated on the stock market as a listed regulator, an arrangement that has not sat comfortably with the market and, it would be fair to say, one that the exchange itself has struggled to justify.

So it is that the formation of SGX RegCo was announced in April, the intention being that it will be a separate, independent body to oversee listing and regulatory issues as well as conduct surveillance and enforce market discipline.

Since then, there have been calls to make SGX RegCo, which will be a wholly owned SGX subsidiary, truly independent of the exchange and not influenced in any way by profit-driven objectives. This is a valid goal as it is important not only for SGX RegCo to be operationally independent of its parent but also seen to be independent.