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, with the changes aimed at enabling swifter enforcement outcomes.
“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,” says Tan Boon Gin, CEO of SGX RegCo.
From August 1, SGX RegCo will have the power to issue a public reprimand and require an issuer to comply with specified conditions, with these actions non-appealable.
SGX RegCo will also have the power to 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 three 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 three 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 January 1, 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.
The requirement will take effect from 1 January 2022 and apply to annual reports published from this date.
Photo: SGX
