Time for listed companies to weed out untimely information disclosure

SINGAPORE'S stock exchange operates under a disclosure-based regime premised on the principle that, in general, informed investors can protect themselves. In such a regime, the principal function of the Singapore Exchange (SGX) is to provide a fair, orderly and efficient market for the trading of securities. It is important for existing and would-be investors to be informed on an equal and timely basis.

Consequently, strict rules for continuous disclosure have been put in place for SGX-listed issuers. Rule 702 of the SGX Rulebook states that issuers must release all announcements on SGXNET, unless specified otherwise. Rule 703(1) states that an issuer must announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which is necessary to avoid the establishment of a false market in the issuer's securities or would be likely to materially affect the price or value of its securities. Rule 703(2) exempts information from disclosure if it would be a breach of law to disclose. Rule 703(3) also exempts information from disclosure if a reasonable person would not expect the information to be disclosed and the information is confidential, plus one or more of the following applies: (a) the information concerns an incomplete proposal or negotiation; (b) the information comprises matters of supposition or is insufficiently definite to warrant disclosure; (c) the information is generated for the internal management purposes of the entity; (d) the information is a trade secret.

Issuers are also required to ensure that their directors and executive officers are familiar with the SGX's disclosure requirements and Corporate Disclosure Policy (discussed below). It is also made clear that the SGX will not waive any requirements under Rule 703.