Take action against non-compliance with corporate governance code

IT would be fair to say that the shift from merit-based regulation to one based on disclosure that started more than 2 decades ago is still very much a work in progress with ample room for improvement.

That shift came about after a government-appointed Corporate Finance Committee recommended in 1998 installing a disclosure-based regime so as to foster a market-driven environment. Since then, many innovative products have been introduced, to give investors more choices while ensuring the local market remains competitive with other developed jurisdictions.

Not all have been welcome, though - the Lehman minibonds and other structured products that triggered the US sub-prime crisis of 2008 and created what is now known as the Great Financial Crisis spring to mind as examples of how the market's "entrepreneurship" can lead to the public buying instruments that might appear novel and attractive on the surface but are in fact risky and not suited for most retail investors. Other more recent initiatives are also not without their critics - for example, dual-class shares, and Special Purpose Acquisition Companies are new capital structures that might be frowned upon by some as being less than ideal from a governance standpoint. Still, despite some reservations, investors here have accepted the usefulness of a disclosure-based regime and the framework is now firmly entrenched as the bedrock of the local capital market.