'Trade With Caution': exercise more care

AS with many things that are new, Singapore Exchange's (SGX's) latest regulatory enhancement known as the Trade With Caution (TWC) notice is encountering its fair share of teething problems, leading to confusion and criticism from listed companies and brokers.

This is understandable - companies have had a TWC slapped on their shares even after replying as openly as they can to the standard query that precedes the TWC notification. Clearly, some fine-tuning may be needed if this new regulatory tool is to achieve its desired objective.

To understand where TWC succeeds and where it doesn't, it is first necessary to recognise that SGX, with its limited regulatory powers, is first and foremost a signaller of caution in a disclosure-based market where the underlying rule is caveat emptor or buyer beware.