SGX RegCo proposes new enforcement framework for swifter outcomes

SINGAPORE Exchange Regulation (SGX RegCo) is consulting the market on changes to the listing rules governing enforcement actions so that it would be able to act more quickly and with greater force. It is also proposing that all issuers have in place a whistleblowing policy and ensure the protection of the whistleblower within the company. 

Tan Boon Gin, SGX RegCo's chief executive officer, said Thursday that the SGX RegCo was acutely aware of the perception that few public enforcement actions have taken place in recent years.

"Our proposal is therefore for SGX RegCo to have the powers to impose all the public sanctions that the Listings Disciplinary Committee (LDC) can impose, except for fines. Fines are the most severe sanction in our arsenal and one of the reasons why we introduced the LDC, so the LDC will continue to have the exclusive ability to administer fines," he said. 

SGX RegCo's current range of direct enforcement powers is mainly confined to private actions. These actions have been regularly meted out but always away from the public eye.

Public sanctions are done through the the independent LDC, which has a demanding case-load. To-date there are 18 notices of charges pending before the LDC, of which only three have been heard.

"We have since become acutely aware that the process of arriving at an outcome for each public enforcement action has taken far longer than anticipated. To the public and the media, this has been interpreted as a lack of enforcement altogether," Mr Tan said. 

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But the investing public can only continue to have trust and confidence in the market if they are assured that swift and appropriate enforcement against any listing rule breaches or malfeasance will take place.

Challenges have also arisen from conflicts of interests when LDC members try to form a hearing committee that satisfies quorum and independence requirements.

The SGX RegCo is also seeking additional powers where an issuer under investigation must seek its approval before directors can be appointed or re-appointed to its board.

Directors under investigation would similarly be subject to SGX RegCo's approval prior to their appointment or re-appointment to the board of an issuer.

It also wants companies to put in place and disclose arrangements to receive and investigate whistleblowing allegations as well as proper provisions for protection of the whistleblower within the company.