SGX RegCo to Expand Enforcement Powers

1 min readJun 28, 20215:47 AM

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The wholly-owned subsidiary of bourse operator Singapore Exchange (SGX) said on Thursday it will broaden its range of enforcement powers and require issuers to implement a whistleblowing policy.

The move follows a public consultation, in which market participants had broadly supported the changes to listing rules, Singapore Exchange Regulation (SGX RegCo) said in an announcement.

This will pave the way for swifter enforcement outcomes and reinforce confidence in Singapore’s capital markets, act as a greater deterrent against malfeasance, and enhance the protection of investors, SGX said.

From 1 August 2021, SGX will be able to issue a public reprimand and require an issuer to comply with specified conditions, which are non-appealable.

It will also be able to prohibit an issuer from accessing the facilities of the market for a specified period or until the fulfillment 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.

More severe sanctions, such as 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 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 the protection of the identity of the whistleblower.

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What this means

SGX RegCo's move to broaden enforcement powers and mandate whistleblowing policies is a robust step, likely to enhance market integrity. By enabling swifter, non-appealable sanctions and requiring confidential whistleblowing mechanisms, SGX directly pressures listed companies to improve governance and deter malfeasance, a stronger stance than merely relocating a flagship or opening a new store. This proactive approach mirrors other regional market regulators' efforts to maintain investor confidence amidst evolving corporate governance expectations, unlike market exits such as HSBC's. The primary risk lies in effective implementation and consistent enforcement. We will be watching for the first public reprimand or director prohibition under the new powers.

Minjun Park · Retail News Asia newsroom

Questions & Answers

What new powers will SGX have from 1 August 2021?

From 1 August 2021, SGX can issue public reprimands and require issuers to meet specified, non-appealable conditions. It can also ban issuers from market access, or prohibit them from appointing or reappointing directors or executive officers for up to 3 years.

Which body will handle the most serious penalties for listed companies?

The independent Listings Disciplinary Committee will continue to be responsible for more severe sanctions, such as fines. SGX RegCo's expanded powers do not include issuing fines directly.

When do companies need to start reporting on their whistleblowing policies?

Issuers must state in their annual reports that a whistleblowing policy is in place for financial years commencing from 1 January 2021. They also need to explain compliance with key policy requirements.

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