Singapore Exchange Regulation (SGX RegCo) is expanding its range of enforcement powers and requiring issuers to have a whistleblowing policy.
This follows a public consultation on changes to the Listing Rules that market participants broadly supported. The changes pave the way towards swifter enforcement outcomes. This will reinforce confidence in Singapore’s capital markets, act as a greater deterrent against malfeasance, and enhance the protection of investors.
“The market has spoken and is demanding more public accountability more quickly. Particularly in uncertain times, we need to give investors faster answers and greater assurance. Speedy enforcement is also a stronger deterrent that will complement our other pre-emptive efforts such as our new whistleblowing framework,” said Tan Boon Gin, CEO of SGX RegCo.
SGX RegCo will, from 1 August 2021, have the powers to:
- Issue a public reprimand and require an issuer to comply with specified conditions. These actions are non-appealable.
- Prohibit an issuer from accessing the facilities of the market for a specified period or until fulfilment of specified conditions, prohibit any issuer from appointing or reappointing a director or an executive officer for up to 3 years, and require a director or an executive officer to resign. These are appealable before the Listings Appeals Committee.
More severe sanctions, such as fines, will continue to be reserved for the independent Listings Disciplinary Committee.
Market participants also generally supported proposals to expand SGX RegCo’s administrative powers. These are in respect of empowering the exchange to object to an appointment or reappointment of a director or an executive officer for up to 3 years. Such powers are exercisable in situations where the director or executive officer is being investigated or is the subject of proceedings for contraventions of any relevant laws, regulations and rules (including those of any professional or regulatory bodies) relating to fraud, dishonesty, the securities or futures industry, corruption or breaches of fiduciary duties.
SGX RegCo will also mandate all issuers to establish and maintain a whistleblowing policy where the identity of the whistleblower is kept confidential and the individual is protected from reprisal. Issuers will be required to state in their annual reports that such a policy is in place for financial years commencing from 1 January 2021, as well as an explanation of how they have complied with key requirements such as independent oversight of the policy and commitment to protection of the identity of the whistleblower. This requirement will take effect from 1 January 2022 and apply to annual reports published from this date.
SGX RegCo’s responses to the feedback received on the public consultation on Enhancements to Enforcement and Whistleblowing Frameworks can be found here.
