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SGX seeks timely disclosure from companies under market scrutiny
May 19, 2016 / 9:16 AM / 2 years ago

SGX seeks timely disclosure from companies under market scrutiny

SINGAPORE (Reuters) - Singapore wants listed companies that are the target of anonymous research reports or short-sellers to quickly disclose information in order to address investor concerns, a senior official of the Singapore Exchange (SGX) said.

A Singapore Exchange (SGX) sign sits outside its premises at the central business district in Singapore, January 18, 2016. REUTERS/Edgar Su/Files

Home to about 770 listed companies, Singapore has seen some high-profile firms pressured by short sellers who have questioned their accounts, triggering a fall in their share prices.

Last year, Noble Group was thrust in the spotlight after Iceberg Group alleged it was inflating its assets by billions of dollars, a claim that Noble rejected.

And earlier, Olam International was attacked by Muddy Waters but it stood by its accounts.

“The main issue that we have is the shock and awe impact of the short-selling report that we need to mitigate quickly,” Tan Boon Gin, SGX’s chief regulatory officer, told the Reuters Financial Regulation Summit on Thursday.

SGX has already signaled to companies that if they do not have enough time to respond to such reports, they should call a trading halt to give themselves time to respond to the allegations, said Tan, without naming any firm.

“If the allegations are extremely wide-ranging then we are prepared to consider an extended trading halt in order for (the company) to have a fulsome response to the allegations.”

Unlike other major financial markets, SGX runs the bourse and is also the main stock market regulator. It is in turn regulated by the central bank, the Monetary Authority of Singapore.

The exchange, which has faced criticism for its handling of a penny stocks scandal in 2013, has taken several steps in a bid to shore up investor confidence after trading volume plunged.

SGX introduced circuit breakers, imposed a minimum trading price of S$0.20 to dampen excessive speculative trading, set up independent groups to vet listings and strengthened its enforcement actions.

“All these are long term measures designed to improve the quality of the market,” said Tan, who had a 10-year stint investigating securities cases at Singapore’s white collar crime unit and the central bank, before joining the SGX in June.

“What we want to see is confidence in the listings, which is why everything that we have done so far is to increase trust and confidence in the quality of listings.”

While SGX has built up a fast-growing derivatives business, it is struggling to attract new listings, with Hong Kong Exchanges & Clearing grabbing the lion’s share of the region’s big-ticket listings.

Reporting by Anshuman Daga and Saeed Azhar; Additional reporting by Aradhana Aravindan in SINGAPORE and Lisa Jucca and Michelle Price in HONG KONG; Editing by Muralikumar Anantharaman

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