ON Oct 12, Tan Boon Gin, the chief regulatory officer of the Singapore Exchange (SGX), announced at the Global Corporate Governance Conference organised by the Securities Investors Association (Singapore) that the SGX would review 550 mainboard-listed companies' compliance with the Singapore Code of Corporate Governance. He hinted that some issuers have failed to meet the "comply or explain" requirement and expressed surprise that compliance is thought by some to be "voluntary".

Rule 710 of the SGX rulebook makes the "comply or explain" requirement very clear. It states: "An issuer must describe its corporate governance practices with specific reference to the principles of the Code in its annual report. It must disclose any deviation from any guideline of the Code together with an appropriate explanation for such deviation in the annual report."

Section 25 of the Securities and Futures Act provides for the Monetary Authority of Singapore (MAS), the SGX or a person aggrieved by a failure to observe the listing rules to apply to the High Court for an order to direct compliance. The recently introduced enhanced enforcement powers will give SGX more teeth to enforce compliance.