Building trust through proper continuous disclosure

WHEN the Singapore Exchange (SGX) relaxed its rules for quarterly reporting in January, it simultaneously said it was strengthening its continuous disclosure requirements.

The move to do away with mandatory reporting every three months was - not surprisingly - almost unanimously welcomed by the corporate sector as it should save time and cost, whilst the exchange's emphasis on risk-based regulation, ie placing more regulatory energies on companies that have been flagged as potentially troublesome and less on those with track records of good conduct, was hailed as keeping with the times as it is in line with practice in other markets.

However, given the spotlight now placed on continuous disclosure, it is important to ask: what exactly does it mean for listed companies? The short answer comes from Rule 703 of the Singapore Exchange's (SGX's) Listing Rules as well as Appendix 7.1, which says that listed issuers have to immediately inform the market of any information that might lead to a false market for the issuer's shares, as well as any material developments that could affect the share price.