Singapore Exchange Regulation to expand enforcement powers

Out-Law News | 09 Jul 2021 | 12:48 am | 1 min. read

Singapore Exchange Regulation (SGX RegCo) will expand its range of enforcement powers and require issuers to implement a whistleblowing policy.

From 1 August, SGX RegCo will have the power to issue a public reprimand and require an issuer to comply with certain conditions. These enforcement actions will be non-appealable.

The regulator will also be able to prohibit an issuer from using market facilities for a specified period or until specified conditions are met, prohibit any issuer from appointing or reappointing a director or an executive officer for up to three years, and require a director or an executive officer to resign which will be appealable to the Listings Appeals Committee. More severe sanctions, including fines, will continue to be reserved for the independent Listings Disciplinary Committee.

SGX RegCo will require all issuers to establish and maintain a whistleblowing policy to keep the confidentiality of whistleblowers and to protect them from repercussions.

Issuers will be required to note in their annual reports that such a policy is in place for financial years beginning 1 January 2022 and explain how they have complied with key requirements such as independent oversight of the policy and commitment to protection of the identity of any whistleblowers. This requirement will be effective from 1 January 2022 and apply to annual reports published from this date.

The expansion of SGX RegCo’s enforcement powers follows a public consultation on changes to the Listing Rules, which ran from August to September 2020, that market participants broadly supported.

Nicholas Hanna of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: “SGX RegCo is the city-state's frontline capital markets regulator. As a vital arm of the Singapore Exchange (SGX), the expansion of such powers is certainly necessary in order to allow for greater and swifter accountability in the securities market”.

“Under the Chapter 289 of the Securities and Futures Act, SGX is required to operate a fair, orderly and transparent market for the trading of listed securities and enforce compliance with its rules. With such expansion, it will allow SGX RegCo to discharge its regulatory functions more effectively. On the other hand, by authorising issuers to establish and maintain a whistleblowing policy, such move will further enhance and complement the disclosures on whistleblowing practices required under the Code of Corporate Governance,” he said.